 What is a bank at a time like this? In a world filled with uncertainties, where lives are put on hold, business paused, and working together means staying apart. Anapsa, being a bank, means staying connected. It means being a part of your future, providing relief at a time of need, and doing this through effective, secure online platforms. It means staying in touch whenever an else seems distant. Being a bank means knowing that we've come from far and are yet to go further. Sebuya go de fute si saia go de. And that possibly this could be a time for a new beginning, an opportunity to reflect and rebuild. We are alongside you, helping you to finance your dreams and grow your legacies. We are in this together. Rigao feila si soke. Once as Amal san. That is African Lassiter. Good evening and welcome to episode 23 of the Private Property Podcast. I'm your host, Zaman Dunga Kumalo. We're on day 48 of the national lockdown. And I know that President Ramaphosa will be addressing the nation at half past eight. So that's literally after the show. This evening's episode is one for the property investors or the wannabe property investors. We'll be exploring Apsa's buy to lead proposition. So if you ever wanted to know how you can best grow your investment property, especially when you're doing rental properties, then this episode is for you. And to help us understand what this proposition is all about, how you can actually apply for it and all the ins and outs of how you can grow that property portfolio. I'm joined by Miguel Martins, who's the head of product management at Apsa Home Loans. Miguel, good evening. Thank you so much for joining us this evening. Azaman Dunga, thank you so much for having me. Looking forward to it. So I think Miguel, maybe let's start with, when this product was launched last year, I got so excited. Somebody who already has a couple of properties in her portfolio, this was the type of product that I thought is just what the market needed. It's a first of its kind and it's the future rental offering. If you could perhaps tell us a little bit about how it actually came about into the market. Well, maybe a little bit of context. So in the Home Loans team, I specifically look off to the investors when it comes to our home loan population. And myself and my team, we spend a lot of time being hard about how we improve our home loans by today's offering to investors. We talk to our credit colleagues a lot. We look at other markets and of course we speak to investors quite a bit. And I probably speak to probably an investor every other day and I'm often in front of investors. So we take a lot from that. So being an investor myself and having gone through and really intrinsically understanding the challenges of investors. What I found was that investors very easily buy their first or maybe even second investment property. And often to purchase that property, they obviously, they finance it using their salaries if they're from the normal jobs. And then they probably use rental income from the first investment to add to the income for financing on the second investments. The challenge is that they often reach a glass ceiling. They run out of affordability. So I've gotten going. I've got a great little portfolio with two great investments and all of a sudden it just stops. And I can probably have got affordability of a couple of hundred thousand if I go and do the calculations. But actually I'm looking to purchase my next apartment or property and actually I need 800,000 a million or whatever it is. And we took a step back and we saw that this was a real need in the market. So just a statistic, when we go look at the market we see that more than 80% of property investors in the market and that's people who own two or more properties own two properties. So very, very few actually break through the barrier of three, maybe four properties. And then you've got very, very few percentage wise that actually own more than five or 10. More than 10 properties is less than one or two percent in the market. So we can definitely see that glass ceiling in the market. So what we did is we looked overseas. We looked in the UK where they've got their biotelect solutions. We looked at a couple in Australia and in other markets that we thought were similar to ours. And then we even looked at home at commercial property financing and we looked at how they look at financing. And that's where this concept of applying the future rental for a property to finance the property in a homelands environment. That's where that came from. And oftentimes when people want to certainly grow their portfolio, I think we might be a relatively want to use future rental but you probably don't even know how to work about doing it or how it works. Perhaps if you can explain to us how exactly the future rental model essentially works. So, and you said it just now. So when investors got in the market, one of the things they do is they choose a particular suburb or location. They look at targeting a one or two bedroom apartment as an example. And they understand that that two bedroom apartment is gonna hit them 8,000 in a month and they do the calculations and they understand that they can really afford to buy four X for six, 700,000. And that's where it makes sense for them. So they've done all that homework. So when they go then to apply at the bank, often the application form doesn't allow for that. So the way the APSA application works is that you wouldn't apply normally because if you're applying for a normal home and application, you would include your salary, any existing rental income but then you would also include the expected rental income on that application that 8,000 round figure that I suggested just now. When that goes through and it goes through our assessment, a credit manager looks at your application. They look at the area that you're investing in, the type of apartment and they do some very clever calculations in the back and they're looking at averages in the area and all formula and then they apply a portion of the future rental income to your income and where you could afford 300,000 before, you can now afford 600,000 because of that additional or even more depending on the value. So it really does help investors rise above the challenge or the hump of the existing affordability. So I know we now have people at home who are watching and thinking, okay, this sounds like the type of product that I want to get my hands on or certainly apply for. What are the requirements for them to be able to even approach APSA and start with that application? Great. So there's actually only one requirement. You need to be an existing investor already. You need to have control or have in your ownership two properties. And the reason why we put that requirement in is because we are leveraging the fact that the investor is going to be enhancing their income with the future rental income. It wouldn't be a good idea for a first time investor who's never had to go and find a tenant before place a tenant, manage a tenant to include that additional monthly payment, but they're not be able to find a tenant. So we really are looking for investors who've had the experience of finding tenants we can take on this additional financing and then very quickly tenant the property and start earning rental income. So Miguel, you said that you essentially need to have two properties. Is that two properties in addition to the property that you're living in or two rental properties? Because I can already see people at home thinking, okay, maybe I have this one property that I'm staying in and I've got the second one, that's a rental property. Does that already qualify me? Or is it you have to have the two that are already rental properties themselves? So that's where we're quite flexible. So you need to have two properties under your control. So that can be the property you live in, your primary residence, and it can be one other investment property. Those properties can be in your name or in a PTOI or trust that you're either a trustee or a director of. So the intent there is for the applicant to show that they understand the requirements for managing property. One thing you don't need is you don't even need to show a lease. So it's all about what that suburb, what the average rental that that suburb achieves for that type of property that you're wanting to finance. So I think essentially one of the big things with that one, I mean, as you mentioned, that is you don't even necessarily look at the lease agreement that might be in place. It's that you essentially take a view on the area that an investor has bought in, but also perhaps even the view on the investor themselves. What type of support do you actually then provide to that particular investor that you would be dealing with? All right, great. So as part of our strategy and in supporting investors to grow their portfolios, some time back we decided to move away from just being a pure home loan financier to actually providing a full solution. And as part of that, we've actually partnered up with some key brands and partners in the market to help us do that. And those include TPN, who are a tenant credit bureau and Trafalgar, a property management who are very experienced in managing properties and have a significant rental portfolio that they've managed themselves, as well as sponsoring this African property investors network where we're able to really interact with investors. But possibly before I get on that road, I just want to, if I may, as someone turned one, I want to share an example of how the future rental income really made a difference to an investor. And it's such a nice case study that maybe we can discuss for a minute or two because it really demonstrates the power of future rental income, would that be okay? Yes, that would be perfect. No, fantastic. So just after we launched, I came across an investor who was applying for financing with EPSA homelands. And at the time, the credit had put a condition in their financing that they had to sell one of their existing properties to be able to finance that next property they were looking at. And that next property was a fantastic property that had a great rental, because it already had a tenant in it. And that investor was really looking at, well, it was in the process of putting the other property up for sale. But our homelands express agents then suggested that they include the future rental income in their application that went back to credits. When credit reviewed it, the final decision was that they were able to now finance and afford that additional property without having had to sell the previous property. So in that case, that investor had hit their glass ceiling. They would need to have had moved back one step to move forward two steps that whole scenario. And now they're able to actually grow and have a much more profitable portfolio, a much more sustainable portfolio because of the future rental income. And that really, often we design these things and it was really sort of fulfilling to see how this had really made a huge difference almost immediately in the life of that investor. And I thought it was just a great story to share in terms of exactly how this does work. I mean, I think more than anything as an investor myself, I can also appreciate a product like this because of reasons like that. Because oftentimes as an investor you certainly want to be adding more properties especially depending on what your investment strategy is. You don't want to have to offload a property because you want to acquire one or prematurely offload a particular property. So I think the effect that they were able to retain that particular property and still grow their portfolio and essentially stay in line with whatever their strategy was is actually so crucial. Miguel, I want us to take a quick break and then we'll come back. I actually wanted to talk a little bit more about the partnerships that Apsa has with the various stakeholders that you mentioned earlier and just how they come together in making sure that investors who opt for the future rental product get the best value and that they also have different partners that they can be rest assured are part of the journey with them. And of course, if you're watching us at home do send in your questions and comments about the Apsa's future rental product and we'll be more than happy to answer the Miguel Martins who's the head of product management at Apsa Home Loans is joining us this evening. We'll be back just after this. In a world filled with uncertainties where lives are put on hold, business paused and working together means staying apart. At Apsa, being a bank means staying connected. It means being a part of your future, providing relief at a time of need and doing this through effective secure online platforms. It means staying in touch whenever an else seems distant. Being a bank means knowing that we've come from far and are yet to go further. Sebuya go de fute, sesaya go de. And that possibly this could be a time for a new beginning, an opportunity to reflect and we are alongside you, helping you to finance your dreams and grow your legacies. We are in this together. Regal feila, sesouke. Once es al-mal-sal, that is African-American. Welcome back to the Private Property Podcast. I'm your host, Zaman Dunwa Kumalo. Tonight we're exploring Apsa's buy-to-let proposition. And it seems I gave Miguel a promotion. Miguel Martins, of course, is joining me this evening. He's the investor product manager at Apsa Home Loans. Miguel, before the break and before giving you a promotion, I did mention that I wanted us to talk about the partnerships that you mentioned. I mean, you mentioned that you've got a partnership with TPN, you've got a relationship with Trafalgar, as well as the South African Property Investor Network. Perhaps let's start with how TPN plays a role in ensuring that an investor who comes in and wants to take advantage of this new offering, how do they essentially come into the picture in ensuring that this is executed effortlessly? Yeah, no, fantastic. So as you start getting into property investment, you start hearing about this concept of having a power team. And that's who you surround yourself with, whether it's a great estate agent, a great builder, a great bank, or a great attorney to help you manage and grow your portfolio. And we took that concept and we added that to our buy-to-let home loan. And we went out and sought some great partners in the market to help us go out to our customers with a more holistic solution just beyond financing their investment purchase. So TPN and the team they're headed up by, Michelle Dickens, the CEO, are effectively a credit bureau. They're a tenant credit bureau, which investors can effectively log the payments received from their tenants. And often we think of credit bureaus as these terrible places, which really monitor bad behavior. But the nice thing about TPN is they monitor the good behavior as well. So as a tenant, you are paying your rent over a couple years, but you're not really getting any credit for it, any benefit from it. And TPN is able to, as a registered bureau, is able to demonstrate that you have managed to fulfill your commitments. So that's where they began, that they offer so much more. So if I start at the beginning, they offer a fantastic service that way and our customers are viewing, are doing views with tenants. Off your cell phone, you can put in your prospective tenants ID number and you receive an SMS with a summary of their credit score. From there, TPN also offers you what they call a lease pack, which is an up-to-date lease, which is put together by attorneys. And you can use that lease in confidence that that lease will be binding on yourself and the tenants and will stand up in court if it's required, but it's better than something you purchase in the store or download on some Google sites. From there, they offer a free property management software called Rentbook. And from there, you can load your properties, you can load your tenants and at a point in time, you can manage and view and monitor your property portfolio. And then more recently, TPN together with their attorneys launched a product called Rental Recovery Pack and it really had to do with COVID-19 and it's a document where you have a tenant that is having trouble with the income and you set up a, you agree a payment plan in terms of their rent to mist and how they're gonna pay that back. This rent recovery pack just documents and makes it all legal so that the landlord and the tenant know where they stand when it comes to getting through the period we in. So they really stay current on top of it and they're really great partners to help. And I think, I'm so glad that you actually mentioned that recovery pack that they're having some of the services that TPN offers. We've actually spoken to Michelle a few episodes ago when she did highlight what it is that the recovery pack seeks to do particularly right now during the COVID-19 pandemic and some of the four new issues, landlords and tenants find themselves in and making sure that as you navigate this Antarctic territory, both parties have a legal document that they can go back to in the event, for example, where they want to utilize the deposit for aspects of this month's rent or future rental or they want to give a discount. So I think services like that becomes so important, especially as you grow your portfolio. Now, Miguel, another relationship that Absa Home Loans has when it comes to the buy-to-let product is of course with Trafalgar. What role does Trafalgar play in ensuring that the investor starts using this product but also has a managing company that they essentially are able to work with? So it's so interesting. So a bit of research on the market is that the majority of landlords prefer to manage their own rentals and that's where TPN comes in. But then there are those other landlords who would rather have an agent manage their rentals either because they'd rather focus on other parts of their property business or because they are location-wise, they're in a different city, a different region. And that's why we went to the market and we found and we contacted Trafalgar and we really set up this partnership with them to be able to offer that partnership or that they're offering to our landlords. And really the offering is sourcing tenants and managing tenants and they offer a significant discount, half of what you'd normally pay to the Absa customers. And it's as easy as arriving at Trafalgar and applying to them to manage your property and just showing that your part of or that your property is a Absa home loan finance property and they'll extend that discount. What's key with our partners is that it was important that we tested them. So I manage my own properties and I use all of TPN's products. I've had to use more recently the rentals or recovery products. It really helped me and it helps me to go out and confidently talk about our partnerships in terms of how we provide solutions to our customers. As I said, even today I had three different conversations with investors. Just investors reaching out to me either directly through Absa or through other channels where we are on. And I can confidently have these conversations and confidently promote the likes of TPN and Trafalgar as great solutions for landlords out there. So we are taking your questions and comments at home. So if you have any questions about the buy-to-let proposition from Absa Home Loans, you're more than welcome to send them. And I've already got questions coming in Miguel. And the first one is, let's have the first one from Bruno Santos who asks, I have two rented properties in my name. They are bonded, rented through rental agencies. The bonds are not with Absa. Can I still apply? Absolutely. So we definitely don't require them to be with Absa for you to be able to get access to the future and to the income. It really is about demonstrating the fact that you are comfortable with managing multiple properties and whether they are bonded with Absa or bonded with another bank. Happy to take it on. Having said that, look forward to having Bruno switch his other home loans to Absa. I can talk about that as well. Okay. And I think that- Sorry, I had to do a pun there. You're more than welcome to. I think Miguel, another question coming in from, this time from Howard is, so he says regarding the scenario that you gave earlier about the investor, did they have to be buying as a PTY or can that scenario also be applicable and continue growing in the same manner if funded under personal capacity? And he goes on to ask, what are the odds of acquiring 100% bonds as they continue? Sorry, so in terms of, if I understand the question correctly, in terms of offering of achieving 100% bonds, that's still very possible. I think the market's moving and that will evolve, but we still definitely allow 100% LTVs. Of course, it's dependent on the investor and of course, and the property. So make sure that my advice to investors is always, keep, make sure you maintain a great credit score. Make sure that you manage your cash flow well so that the credit manager can see that you haven't got unnecessary expenses, et cetera. And of course, properties, make sure that you are financing or purchasing properties in good areas where the rentals are sustainable. So I think that first question we've essentially dealt with it was, he was essentially asking if the properties need to be under a PTY or in your personal capacity and he did mention that they don't necessarily have to be under a trust or PTY, they can essentially be under your own personal name and they'll still be considered. And I suppose then Miguel, the future, so the property that the investor is looking at acquiring, would that property be in their personal name or would that need to be in a PTY? Either, either. So future rental income applies across whether you're financing a person name or in a PTY or trust entity. Ah, okay. I think perhaps that may have been the second component of his question. Now, one of the other stakeholders that you actually mentioned, and I'm sure that other investors might want to know a little bit about this one, is the South African Property Investors Network. Perhaps tell us about Axis involvement with SAPIN and how they see that relationship being very beneficial to investors. So we're so excited to be partnering with a South African Property Investors Network or SAPIN as many people call them. That's a great platform for us to meet with the investors, for investors to meet with us. I often go to their events and more recently, we're on their webinars and live streams and it's a great environment for investors to raise their needs, their challenges, what they're dealing with. And I often take a lot of that back to the office and it challenges me to think more innovatively about how we design products for investors. But more so, I find it's a very rare opportunity for investors to have access to a bank and almost that inside scoop in terms of how to solve their problems and how better to structure their finances. So we're very happy to work with SAPIN and work with their investors. Now, you know, so Miguel, a lot of people at home are watching us and they're thinking, okay, so I've gotten an understanding of what this product is. I'm an investor, I certainly meet the requirements, I've got two or more properties and I want to essentially get the next property by using the future rental model. How do they go about applying and where do they actually apply? Okay, fantastic. So although this is a unique product and it's specifically for buy to let the application form is a standard application form. So whether you're applying directly to Appster or through one of our mortgage originator partners, it's the same application. You'll just need to indicate on the application that you are including future rental income and that the property is an investment property and the different applications depending where it comes from will indicate that in different manners. But otherwise it's a standard application form and standard application process and we try to make it as easy as possible for the investor to be able to access it. And before I let you go, Miguel, I mean, you've been saying throughout our conversation that you often speak to a number of different investors and a lot of them reach out to you almost on a daily basis. There's always a conversation you're having with investors because you perhaps share with us two things that these investors typically tend to ask you. Sure, so I'll think about two questions I was asked this week that often surprises me. People don't realize investors are black and at home and as alike, don't realize that they can access the equity in their properties. So over time and let's not take the current situation but over time property values increase whether it's half percent or whether it's percent the property values increase. And it's possible for, it's possible for properties, it's possible for, excuse me, for customers to access the equity in those properties through a further advance. And that's something that happens quite often and people don't realize it. So we are sort of with the property as worth a million grand, not worth 1.5. You can come to back to the bank, go through a normal application, access an additional half a million grand to be able to apply for any purposes that you may have. And of course- This is my wife behind me, she's got things to say live. All right. I think this is one of the things that we love about- We're all working from home. Well, with these virtual sessions is that anybody can walk in. If it's not your wife, it's the cat or your children. So we really do like how working from home, let's us see people's loved ones. So, you know, Martin, so Miguel, I mean, there was a- These things interesting. Yes, no, it definitely does. I mean, I've seen so many people where some of their cats would come in and you're seeing a cat taking over the screen. So I think your wife is miles better than a cat taking over this interview. So that was the one question where people ask you how they can unlock value. And of course, you said that one of the ways that you can access equities, perhaps using things like the future advance, what then is that second thing that investors typically ask you when they ask you a question? So this is slightly different. And it talks to homeowners comprehensive insurance. So whenever you take out a home in Africa, it's a requirement that you have building insurance for homeowners comprehensive insurance, right? And what people don't realize is that within that insurance, at least APSA's HSC, and I think for the most parts of the bank's HSC insurance, is an insurance for rental income. So in the incidents where the oriental property is not able, it's flooded, there's a fire or whatever the reason and a tenant is not able to stay in the property. Then there's insurance for that rental, you will still receive that rental for their property. So not only does insurance cover the costs of repairing the property, the burst geyser that flooded the property, et cetera, but it also covers the rental for that investment property. And it's a small clause, it's in many of the homeowners comprehensive insurance policies, but it's a nice to know that there is actually that low value in those policies. And that was something that I must admit, I only found out last year and I think it becomes a nice surprise for investors. We've got another comment from Howard who's one of our regulars and he says, I like Miguel, he's dissecting so much in so little time, bring more Miguel here and he's there and he shared a clapping emoji. And another one again from Bruno, he says, how do I get hold of Miguel? So if people want to reach out to you, how do they, or how do they reach actually the AFSA home loan team? If of course, perhaps sharing your contact details is a bit much. So happy if you share my email address and I'm not sure if you share that in the comments or whatever, but it's Miguel.martins.africa and happy to get questions and queries from investors and happy to engage. Perfect, thank you so much Miguel for joining us this evening. It has been quite an insightful conversation, especially for those investors or one to the investors who are looking at growing their portfolio and perhaps might not know how to best go about doing it. I think the AFSA's buy to let proposition is the type of product that you want. The ability to look at future rental and take a view on it is so crucial, especially for those of us who want to exponentially grow our property portfolios. That's been Miguel Martins who's the investor product manager at AFSA Home Loans this evening. Has been a really great one, it's episode 23. Tomorrow we are back with episode 24. I know that the president will be addressing us shortly. I hope you are staying at home, still abiding by lockdown rules and we'll be back again tomorrow evening. Thank you so much for having me, appreciate it, enjoyed it. Knowing that we've come from far and are yet to go further, said we are going there for the desire to go there. And that possibly this could be a time for a new beginning, an opportunity to reflect and rebuild. We are alongside you, helping you to finance your dreams and grow your legacies. We are in this together. Regal Fela says so okay. Once as Amazon, that is Africanistan.