Broadway Update October 2009

Good afternoon Broadway Investors

 

It is hard to believe that it will be 2 years in December.

 

Broadway has had a few problems in this time but nothing that had been out of the ordinary for the CBD building:

·         Managing agent problems (building maintenance, levies arrears)

·         There have been ongoing developer issues (not uncommon with new developments)

·         Student as tenants (the units are usually empty over December)

·         A few Bank repo’s went through this year.

 

The care taker at the building, Benjamin, is great and has been an assert insuring that the building is well looked after.

The security also seem to have the building under control.

The Bridge Diner is up and running and although it had a slow start things seem to be picking up nicely.

The buildings laundry is up and washing on the 14^th floor.  

 

Next year should be a great year with world markets already starting to recover. We are going to start our marketing of units for next year at

 

o   Penthouse at R6000

o   1 beds at R4850

o   Studio/bachelors at R4500

 

We have had a few landlords that have repainted and cleaned up their units ready for January and they look great.

We used a Sirius Construction for the work, repainting is about R1200 depending it’s a studio or one bed.

 

 

Let us know if you had any questions

Online Problems FNB

How dependant we become on technology

 

We are sure that you know (either from experience or you heard it on the news)

 

FNB is having trouble with their online banking, this has made it impossible for us pay anyone from the comfort of our office.

 

We have had to make a trip to the bank, not want we wanted to do but some thing that has to be done.

 

Very often in life and business we are faced with things that we don’t really feel like doing.

 

Successful people and companies are good at getting the crap things done; it is not because successful people like these things more than most.

They know that getting it done is more important than moaning about it.

Options for Colosseum electrical

Is it possible to put in prepaid meters?

 

Electrical meters will be very tricky in sectional title building like Colosseum. The electricity comes into the building in a bulk supply and is then allocated by Trafalgar to the units. We will follow up on our side and see what can be done.

 

One way that we can see it being done is that all the owners agree to have prepaid meters installed into all the units. The cost of the council meters are about R3500, so this is going to be a really big hurdle for most of the owners, especially the ones that are still battling to get tenants that the rents that they want.

 

Keeping an eye your electrical bills

It is not always plain sailing in property

If you feel that there is a problem with the electrical reading make sure
that the readings are correct, have your tenant or managing agent

Confirm the electricity readings for each of the Electricity charges and
check them against your invoice.

Don't be afraid to ask for a breakdown

If a body corporate letter explains that there are additional electricity
charges for communal use, find out if the charges apply if the unit is
vacant

Make sure that the body corporate explains how the invoicing is charged.

Very often electricity is dated, be aware some time the back dating can be
as much as two months,

This can be very confusing for the tenant that get a high electricity bill
in September (where he was away or it was very hot and he never used the
heater once) for his use in July.

Bridgeview News

On the 27th September 2009 at approximately 04h36, there was an incident of break-in on site.
The control room received a panic signal from Bridgeview and the armed reaction officer was dispatched with a back up. On their arrival, they made contact with the guard Alain G2119 and Bongani G1993 and
they have arrested two guys that had broken into unit 323 and stole 2 laptops, they broke the window and gained access into the unit. The police were called and the suspects were taken away by the police.

The landlord's responsibility is to ensure that the property is in a reasonable good condition

Question
 
My new tenant complained that a switch wasn't working and insisted I bring in an electrician. The electrician told me the tenant hadn't turned on the switch. Who pays the call out fee in a case like this?

Me or the tenant? Can I deduct this amount from the deposit?

Answer

The landlord's responsibility is to ensure that the property is in a reasonable good condition to live in before letting it out, says Mike Spencer, Realestateweb.co.za guest columnist.

The tenant is responsible for keeping it in good order. If the tenant fails to turn on the electricity switch and gets the landlord to call an electrician, the tenant must therefore pay for the call out. Spencer says the landlord ought to send the tenant an account and insist the tenant pays it.

My advice for landlords is not to deduct it from their deposits because when they move out, and there is not enough funds in the deposit to cover the outstanding repairs or unpaid rental, it becomes a problem for the landlord, says Spencer.

He adds that landlords should always have a written lease that sets out clearly the responsibilities of the tenant. The landlord can also let out the property through a good managing agent who will have list the tenant's responsibilities in the lease and would ensure that the landlord fixes what they should and the tenant does what is expected of them.

Extensive checks should be done on prospective tenants before a property is let out to them. Get rid of problem tenants as soon as possible, he says.

Spencer says it is important for a landlord to inspect the property together with a tenant when they move in or move out. This will assist the landlord in cases where the tenant asks the landlord to fork out money for a call out when in fact they were at fault in the first place. He says a landlord should make a note of all repairs attended to during the course of the lease. -denise@realestateweb.co.za

 

Develop a network

Experienced landlords find their properties in a variety of ways. Some hunt for foreclosures, making friends with city hall clerks or bank employees who know which properties are about to be sold. Some run ads in local newspapers. Others work with real estate agents who keep their eyes peeled for possible buys.

 

Regards,

BRUCE THOMSON

Blue Label Real Estate Solutions
2 Ashley Lane Rivonia 2028 South Africa
Cell 083 262 3867 Fax 086 660 0969

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Some Rules to Investing in Property

If you know what you looking for you can still make “serious money” in residential property, say property experts.“There is no more money for nothing and investors will have to relearn the traditional investment rules,” said Andrew Schaefer, MD of property management company, Trafalgar.

Reasonably priced properties (that are good value for money) are becoming more difficult to find and require a lot of legwork, adds Anton de Leeuw, CEO of YDL property educationalists.

Here are five golden rules to finding them:

Long-term investment. Property is traditionally a long-term investment and you should focus on building your wealth over decades, rather than months or years, reckoned Schaefer.If you take the long view and see property as a conservative, steady, income investment then short-term fluctuations in the market should not concern you too much, maintained de Leeuw.

Property players warn of get-rich-quick property schemes offering returns that are too good to be true. Income not capital growth. Concentrate on income rather than capital growth. “Having a piece of land is not wealth but having steady income from a portfolio of flats is,” he explained. Investors underestimate how important cash flow is - it is one of the most important rules, said De Leeuw.

Don’t rush. Slowly accumulate a low-risk portfolio reckons Schaefer. “The days are over when you could make quick money by buying off plan - prices aren’t rising by 30% a year anymore and you must take your time”, he added.

Specialise. Choose a niche and become an expert in it. Schaefer advises investors to choose a city suburb or even a street of shops and flats. “The property market is imperfect because information is not easily available so you can quickly dominate your chosen territory.”Educated investors will know that the property market is not one uniform mass of houses and buildings – it is made up of thousands of local markets, each with its own characteristics, maintained De Leeuw.

Bigger is not always better. A home with a big bond is not an investment, warns Schaefer. “People tend to buy bigger houses and take on bigger bonds as their jobs improve but this just means paying larger monthly instalments,” he said. It will make far more sense to live in a smaller house and invest in buy-to-let properties with tax-deductible bond payments, reckoned Schaefer. But, he added, you can use your house to a limited extent to raise a deposit to buy an investment property.

RentSure - Great News

Rentsure is one of the greatest companies to hit the CBD. We are in the process of working with Rentsure. One of there requirements is that your tenant signs a debit order. We are still sorting that issue out with our bank. Once our banking items are fixed we will be partnering with them and offering this insurance to our landlords.

Keeping At It - Colosseum

We are having a rough time find tenants for the Colosseum. Our biggest hurdle seems to be that Landlords have let their units out for R2500 and the tenants have got this as their bench mark.

Two new developments have been completed in the area and this over supply is also putting pressure on the rentals. We are aware of the frustration of not having a tenant and the financial stress that it causes.

Colosseum Electrical Challenges

We were seeing a problem with the electricity bills for a lot of our owners.

We have had a long chat with Trafalgar to find out what is the problem with the electrical accounting.

The Colosseum was converted from a high-end commercial building into residential, much of the mechanical and electrical services have been carried over into the new building.

The buildings electricity charge needs to cover the (1) consumption of the unit, (2) there is a portion boiler and (3) for the airflow (ventilation)


This meant that each unit will have a charge:

• Metered consumption for your unit;
• A portion of the boiler charge & the airflow consumption servicing the units’ floor;

The dilemma is that even if the unit is vacant these charges will be raised on the invoice.

The one advantage is that there is a possibility that we can attempt to pass these charges onto the tenant.

It just seems to be one thing after the next with this building, this development has really upset a lot of landlords and we hope that it does not leave a sour taste in their bank accounts for too long. Once the building is full we will start to see a positive increase in the rents.

Trouble in the CBD

The Stress at Colosseum continues….

We were using the services of Cephas Iredia to assist us with getting tenants for Colosseum. It turned out to be more trouble than it was worth.
We have disassociated ourselves with him; we have found that he has been putting tenant into units in his own capacity with out telling the landlords (on other occasions collecting money into a Standard Bank account in the name of LT Dude). We have discussed the problem with the agent from City Bridge and have formally disassociated ourselves with him. We will do all that we can to see that if there are any units with a problem, they are rectified.
As there are a number of letting agents finding tenants for landlords it is had to know what units have been let and what units should still be vacant, we would like to request that you please check and see that there is no one staying in your unit.
City Bridge is no longer giving Keys out to letting agents; the landlords are to be required to sign. This is to help eliminate the problem of unauthorized having access to the unit.

The Gloss is Back on Braamies

STUDENT accommodation, yuppie lofts, shiny corporate buildings, restaurants and night clubs, all underlined by the efforts of the City and private sector, are bringing the vibe back to Braamfontein.
More... http://www.joburg.org.za/content/view/4050/266/

July News Letter

Good Morning Investors

It has been quiet a biting winter, those of us with tenants in our units have not felt the cold as much as those who are looking, June/ July is always a quite time for landlords. Things have not been that quite on our side,

We have refined the way that we are looking after CBD units, with a big emphasis on our staff training. There have been one or two complaints about our agents not giving you, the landlord, the service you deserve.

Our business is to look after your unit so that you don’t have to worry about it. Our agents are paid for taking care of your needs, your feed back is very important to us. Our agents are aware that if we have any landlords that are not happy it is an opportunity for us to solve the issue; we are on hand to remove tat stress.

We are very excited about the CBD and believe that our landlords will see the rewards for there bold move. Despite the global financial crises our CDB’s have shown some resilience, with modest but steady rental growth across all of the major metropolises. In the first quarter of 2009, rental growth in Johannesburg 6%. In the other metropolises such as Durban (9%), Port Elizabeth (7%), Cape Town (6%) and Pretoria (5%), rental growth was also been slightly effected by rising vacancies
Given consumer inflation of 8, 4% for the first quarter of 2009 and real rental growth declined across the country we are still doing ok.

For those of you that don’t feel comfortable coming into town into the thick of the action, the next best thing is see it and hear it for yourself – on video. Get the City news, feel the Jozi vibe through these live action film clips. Read more

Lets not forget the 2010 Soccer, we are current perusing some options and will inform you of our progress so that we can arrange leases accordingly.

More than 55 000 soccer fans are yet to book accommodation for the 2010 Soccer World Cup and Seeff Properties and football icon Gary Bailey have joined forces in an innovative joint venture that will see South African property owners score by letting their homes to alleviate the crisis. Read more

Dealing with Rental Vacancies

There are all kinds of reasons why you may not have tenants to rent your property for a period of time. When you first buy a property, it may not be rented and could take a while to find tenants. You may not have the greatest location and it takes longer to rent. You may be trying to rent in the middle of the year when students already have housing. There may be an abundance of rental property in the area, or perhaps the condition of the property makes it difficult. Whatever the reason is, you need to fill you vacancies quickly or your property will become a much less profitable investment.
Every month that your place goes un-rented could means hundreds or thousands of Rands in lost revenue. But, there are definitely things you can do to improve your chances of limiting vacancies. First, if you do end up with a vacancy for a period, use the time wisely by making repairs and completing required maintenance to the property. Spruce up the place, paint the interior or schedule major repairs while the rental is empty. Later when you are showing the property to prospective tenants, they will give your property more thought because of the better condition. Also, it is a lot easier to make repairs in an empty property.
Be creative. If you know students will most likely be renting your property, rent your place when they are looking for housing in order to increase your chances of finding good tenants. This is typically in the beginning of the year. If you rent from February to January, consider renting for a shorter or longer period so that you can change your lease term to coincide with the time when students are looking.
Consider giving a discount or incentive to rent your property over another. Reduce rent for a short period, permit use of a garage or store room, offer to install a washer and dryer, or something else that tenants in your area may want. In addition to listing your property on this web site and others that cover your area, run ads in local papers, hang flyers and ask everyone you know. Hang a For Rent sign on the house so neighbors or people driving by will see it. Offer a reward to someone who finds you tenants. A small amount spent on advertising or discounts will more than offset the cost of lost rent for one or more months.
If you expect your tenants will not renew your lease, begin looking for new tenants early. Don't wait until the last minute and chance having a vacancy. Ask the existing tenants if they know of anyone that may be interested in renting your place. They may have friends who have already seen your rental that would be interested. Use every means possible to avoid having vacancies.
And ALWAYS DO THE BACK GROUND CHECKS

End of a long Week

Our first week of May 09 is finished,

We have had a very interesting week; we are still battling to get the true rent value for the Colosseum. We have had huge resistance from prospective tenant that we tell the rent is R3500 and they have friends the have unit for R2500.

We find this desperately frustrating as we are investors ourselves and have to repair and suffer the mistakes others. However life is not always plain sailing and it will go on no matter how much you complain.

So we have got creative and are approaching the building from a new point of view. We have been spending our time visiting the surrounding businesses (incl Standardbank and ABSA) to create exposure for the building and get local companies to see the value in their staff having quality accommodations so conveniently situated.

We are starting to see some pay off and it looks like things are going to start turning for the good.

In hard time you need to identify the problems that you are facing and then get busy with creative ways so solve them,

How to be a succesfull landlord

One key to being a successful landlord is taking the time to pick the best tenants and keeping the rental property maintained. If you do not have the time to keep up a property on your own, or if you own several rental properties, you can quickly become overwhelmed.
The tips provided



1. Always check references. Recurrent problem renters are usually quite accomplished at giving a good impression and can fool even the most jaded landlords. Always ask for references and take the time to follow up on them.


2. Get it in writing. In order to protect your interests and the interests of your tenants, get everything in writing. This means everything from a rental application to a code of conduct. If a tenant needs to have something fixed in their dwelling, ask them to provide the request in writing in addition to telling you on the phone or in person. This will help you with you income tax deductions and create a history for each tenant.



3. Provide a clean and secure residence. Keep the grounds of the property clean and free of debris. This will help you with property liability and keep your rental property looking its best. Depending on the location of the rental property, you may want to provide extra security measures. This can help keep your tenants safe and secure, and may even lower your insurance premiums.


4. Pick your managers carefully. If you do not have the time to personally manage your rental properties, you will need to hire a manager. But your success as a landlord will hinge on your choice. Make sure to hire the absolute best person for the job.


5. Get insured. Make sure that you have the maximum amount of rental insurance, property liability insurance, and any other type of insurance that may be required in your state. This can help protect you from devastating losses.


6. Make repairs promptly. Your tenants deserve to have decent living conditions. In the case of furnaces and other necessary appliances and fixtures, repairs simply cannot be put off. Try to imagine yourself in your renter's position. Could you live without running water for three days?


7. Respect the privacy of your tenants. Adhere to your state's guidelines for entry into a rented dwelling. Most states require at least a 24 hour notice before a tenant is required to allow their landlord to enter their rented dwelling.


8. Do not discriminate. Follow the Fair Housing Administration Act when you screen prospective tenants. A discrimination lawsuit is extremely costly and completely avoidable. Give everyone an equal chance to rent your property, regardless of their race, religion, or beliefs.


9. Have a well-drafted lease. It is imperative that the form of lease you use with tenants be well-drafted and pro-landlord-oriented. For a well-drafted form, check out the sample Residential Rental Agreement at the Forms & Agreements Center.


10. Always be fair. In addition to avoiding discrimination, strive to treat all of your tenants fairly. Try to understand their position and keep in mind how they may perceive your actions. While you may not be able to get along with everyone, having a good rapport with your tenants will reduce vacancy problems.

10 Questions to ask Property Maintance workers

When you are a landlord, there is always maintenance to be done. Whether it is a burst pipe or a broken washer-dryer, there are all manner of problems that can strike a rental dwelling. If you do not have the time or skill level to fix these problems, you will probably need to hire a professional.


But repeated calls to specialized workers, such as plumbers or electricians, will quickly devour your profit margin. If your rental property is having continual problems, you may want to hire a full- or part-time maintenance worker.
Before you begin your search, check with your current tenants. If one of them is qualified to perform the necessary maintenance, you may be able to work out a barter arrangement in which you trade work for rent-free accommodation. Over time, this can be a great way to save money on repair costs.
Whether you end up hiring a tenant or outsourcing the maintenance position, there are several things to be mindful of. Asking these 10 questions can help you find the most qualified person for your maintenance position ahead of time, saving you trouble and extra expense down the road.


1. Are they experienced? There is a big difference between fixing a leaky faucet and caring for a property. If you own a large apartment complex, the complexity and frequency of problems may be too much for the average handyperson. Before hiring anyone, make sure that they are completely capable of handling the most demanding tasks they may face.



2. What is their skill level? Can the worker handle a variety of problems? Are they qualified to work as an electrician, or do they have certain limitations?


3. Does their expertise match your problems? If you have a building with chronic plumbing problems, hiring someone who is more skilled at carpentry will not be very helpful. Try to find a jack of all trades rather than a master of one.


4. Where do they live? If your maintenance person does not live on site, how far away is their primary residence? If you find someone who is absolutely perfect for the job but lives too far away, you may want to consider providing them with housing either within your rental property or nearby.


5. Will they be full- or part-time? This will depend on the size of your property and the amount of problems you anticipate. If you have a large apartment complex, you may need to have a full-time maintenance person on the job. However, if you have only one or two rental houses, a part-time worker would be the economical choice.


6. What is their response time? This is very important if your worker does not live on site. Some problems just cannot wait until morning. For example, if you have a furnace go out in the middle of a very cold night, you will need to have this fixed as quickly as possible. If your maintenance person cannot get to your property in a timely fashion, you may need to find someone whose schedule will permit them to be on an on-call basis.


7. Can they provide references? Request both employer and character references. Have each applicant complete a written application so you can follow up on the references that they provide.


8. Are they ethical? An unethical maintenance worker can quickly drain your wallet and poison your reputation with your tenants. Ask the applicant's former or current employers about their work ethic and personality.


9. Can the applicant keep up with demand? If you have several properties, or if your properties are spread out over a wide area, one worker may not be enough. Take into account how often you may need them, and how far your properties are from their current location.


10. Are their rates reasonable? If you have infrequent problems with your rental properties, the added expense of hiring a maintenance worker may be more than you would pay for one-time jobs. This is something you will need to weigh before making your final decision.

Gautrain CBD

Gautrain enters Joburg with a bang

Some 350 kg of explosives was used in the demolition of a block of buildings in Braamfontein, Johannesburg, to make way for the construction of an underground parking area for the Gautrain rapid rail link at Park Station.

Great news for the CBD

This Artical from Eprop

Office decentralisation and perceptions of crime and grime has seen certain tenants relocating from Braamfontein to the decentralised nodes, but companies such as Liberty Life, Sappi, SafMarine and Rennies have committed to the area, and together with Government, are pumping vast amounts of capital into the area in the form of urban design initiatives and parking facilities. This is now seeing strong improvements to property market fundamentals and investment activity.

Marc SchneidereProp Research

The next arical was taken from business day

Pace Property Group MD David Green says the development of Bridgeview units prices range from R399000 to R1,2m, including VAT. The apartments are trendy and aimed at young professionals and executives.
Green says there is strong demand from buyers for space in Braamfontein. Government’s urban development zone tax-incentive scheme is paying dividends, with developers looking to extract the full benefit of the incentives. “Therefore, we anticipate rapid new development and improvement of inner-city real estate.”
The urban renewal tax incentives were announced by the treasury in October 2004. On offer is a 20% tax deduction from all income earned in the first five years after a building has been refurbished. For new developments, government is offering a tax deduction of 20% in the first year in which the building starts earning an income.
The Johannesburg urban development zone, for which the tax break is applicable, includes the central business district, Newtown and Braamfontein, as well as the high-density, high-rise residential areas of Hillbrow and Berea.
Other low-density residential areas surrounding the general Ellis Park area, such as Bertrams, Judith’s Paarl, Doornfontein and Troyeville, as well as Bellevue, Bellevue East and Yeoville, also form part of the approved urban development zone.

May Newsletter

Good morning Investors

We hope that you all enjoyed your holidays this last month

We have been involved with the launch of a fantastic new development called the Colosseum. It has been a bit of an uphill journey.

For those of you who have not invested in the building here is some background. The developer wants to keep standards of the building high and has implemented restrictions that do not permit just any letting agent into the building to rent out the apartments. We had to meet with the developer and issue company docs for approval.

This is a great idea and we are quite surprised that this is the first time that we see a system like this being implemented into a CBD block. There are plenty of sub-standard agents out there and we are sure that most of you have had the unfortunate experience of dealing with them.

This type of entrepreneurial thinking is what we need to really see our investments grow.

All our other buildings are doing well with nothing to report.

The only bad news that we have this month is that there was a fight at the Broadway Building, Friday night 30 April, the security did sort out the problem and there is a meeting with the body corporate, Security Company and the managing agent.
This sort of behavior can be avoided by implementing the right house rules. However we think that the Body Corporate of buildings in CBD should start enforcing that only approved managing agents are allowed to operate in their buildings.

Let’s hope that May is a trouble free month,

Do South Africans have the wrong mind set when it comes to property?

We have seen this for years now, and it is becoming more of a problem.

More buy-to-let investors are joining the market with the dream of easy riches. The influx of investors is great for the economy and will help turn the property market around sooner than most skeptics might think.
The problems arise when investors come to the playground without understanding the whole process.

Over the next couple of days we will go through some to the major shortfalls (excuse the pun) that we see investors having

The first mind set that has to change is the need to let the property as soon as possible so that the rent can cover the bond.

Although the fundamentals of this strategy are sound, the problem is that in their hast the landlords neglect to take the time to do that right checks. 95% of the problems come from neglecting to do a credit and background check on the tenant. This small necessary inconvenience is definitely worth its troubles.

The simple steps are,

1. Properly screening. An undesirable tenant will often have a poor rental and financial histories.
2. Landlords should review previous landlord relations.
3. Credit checks and income. It is probable that if they have not met their obligations with previous landlords, then chances are that they will repeat their behavior with you landlords.
4. Screening also involves verifying that the person who is applying is the same person that submits credit/criminal info for screening. A picture I.D. should be cross-referenced with the application.
5. Landlords must make sure that there are no omissions, inaccuracies or inconsistency in the actual application.


Due diligence will certainly save you much money and stress.

Don’t fall into the mind set of “Quick got to get a Tenant now”

New life in to Braamfontein

Braamfontein has been a part of Johannesburg since 1886, the year the city was established. Back then, Braamfontein was a farm where people lived and worked, and there was a strong sense of community.
Situated north of the city centre, over time the area developed into an important commercial and economic node of Johannesburg, housing a vibrant business district, the seat of local government and various educational institutions and business corporations.
Then, between the late 1980s and early 2000s, the area went through a period of urban decay causing an exodus of institutions and businesses to more affluent areas. It became degraded and run down, but was fortunate in that its vacancy rates remained some of the lowest in the inner city, even during the worst of these times.
In 2002, the Johannesburg Development Agency (JDA) and the City council embarked on a R13-million regeneration programme for the area, realising how important the location and function of Braamfontein was to the local economy.
Since then, the JDA has spent more than R55-million on the precinct, renewing the area as a centre of business, entertainment and education.
There has also been significant private sector investment in the precinct, with almost R4-billion spent by investors and developers over the last seven years, resulting in rental rates and land values increasing, and vacancy rates dropping below 10 percent.
Braamfontein remains the fourth-largest node for office space in the city of Johannesburg and is home to a number of South African-based multinational corporations as well as one of the country’s premier educational institutions, the University of the Witwatersrand.
It is on a par with other prime office nodes such as Sandton and Melrose Arch. The area, of more than 428 000m2, is now a mixed-use node consisting not only of A- and B-grade office space, but also with a strong residential component, offering both loft and executive-style apartments and budget accommodation.
Today, the success of this regeneration project can be seen in the beautiful tree-lined streetscapes, public art, and safe, well-lit open spaces. The area has become a vibrant social space again, with coffee shops and small restaurants offering daytime entertainment; and at night the precinct is quiet, safe and clean, the result of its active city improvement district, which ensures quality urban management, safety and marketing remain in place.

CBD Buy-to-let

A question from one of our landlords!


"Hey Guys, I want to build a portfolio of buy-to-lets, how do I know what area is best to invest in to achieve my goal?

"Our reply:Great question, the first thing you have to understand is that before investing in any area, you HAVE to do your research!!!
Its simple: We've found that the most important factors in researching an area can be answered if youask yourself these 3 questions:
1- What type of tenant am I looking for?
2- What type of property would my tenantideally like to live in?
3- In what area will I find that type ofproperty?

All these 3 factors (Tenant, Property& Area)must be looked at together to assess whether the area is good for investing in Buy-To-Let's. When deciding what type of person you are looking to rent to - create a profile for them:

For example, ask yourself if they are young professionals, students, or if you want to rent to families. Once you've decided WHO you'll be renting to, look at the needs and wants of that type of person. If you decide to rent to students, they'll want to be close to their university... The best way to find out about this is actually chatting to people who represent your 'target tenant'. Find out what features your tenant values most and if they are prepared to pay extra for any of them. At this point, you should have a fairly clear idea of WHAT you'll be renting and it'll be time to look at WHERE you'll find the type of property you're looking for. Go back to the profile you've made for yout 'target tenant'and find out which area supplies all the attributes you're looking for. Consider things like the transport connections in the area, the local amenities, how are the schools in the area you're looking at, what is the quality of the local environment, how are the employment opportunities and how relevant are all these factors to your target tenant. Remember: these 3 attributes are inter-related and must be looked at together when assessing whether there is rental demand in aparticular location. Now, the next question you need to answer is:
Can you make any money or does Buy-To-Let financially stack-up in that area?

The CBD is Fast becoming a hot spot for Buy-To-Let investors

Developement

In 2002 in response to the urban degeneration of Braamfontein, Sappi along with the JD Group and Liberty Properties decided to upgrade the entire corporate area bounded by Hoofd, Simmonds and Stiemens streets up to Bertha Street in the west. The Civic Theatre park and the National Ballet School were also developed all in a joint venture with the Johannesburg Development Agency (JDA), the development arm of the City of Johannesburg.
The City of Johannesburg funded the rest of the upgraded area, developed by the Johannesburg Development Agency from Stiemens street down to and including De Korte street and from Bertha street to Joubert street extension including the area around the Council Offices.
The JDA team created an intimate public square on the east side of Bertha between Ameshof and Stiemens streets. They have also upgraded the whole of Juta Street between Loveday Street and the M1 off ramp. The same urban designers and professional consulting team was used by both parties so that conformity of design and quality of finished product would be uniform. The design team created distinctive on street lighting designed to cater for pedestrians as well as vehicles as well as distinctive paving patterns, street furniture, benches bollards etc, all of which combine to give a unique look and feel to the development area.
While a series of projects have already been completed, some future plans for Braamfontein include a new reception centre for the council offices, pedestrian linkages through to Constitution Hill, upgrading the alleyways between buildings, providing public art and street toilets, re-opening of the historic Alexander Theatre, new primary health care clinic, lots of new residential apartments, and more pavement coffee shops.
Other improved road and rail links will make commuting between Braamfontein and the rest of the inner city easier. The future Gautrain Rapid Rail Link involves a modern state-of-the-art rail connection linking Johannesburg with Sandton and Pretoria as well as Johannesburg International Airport.
For more information visit www.jda.co.za/braamfontein/index.stm

Braamfontein's chance to shine

To crown the creation will be a 750-square-meter open-view, glassed-in venue facility - which looks out over a fantastic, uninterrupted view of the city, the Nelson Mandela bridge and the railway tracks - and Joburg’s first daylight studio. Clients will travel by an external glass lift to these, so the view will be obvious before even arriving at the still-to-be-constructed fourth floor.“We were looking for an old building which we could refurbish, with very high ceilings,” says Paul, “the extra height allows for high camera shots in the studios and a hence, greater variety of perspectives.” Shooting should be a buzz for major clients, as they can simply drive a truck in off the street straight into a studio. A canteen will be on site, and there is ample parking – all just one block off the freeway. Once completed, Shine will allow for clients to book models and shoot them all in the same building. “Shine combines every aspect of advertising, fashion, beauty and motion picture under one roof” reads their website. Already in the stable are Heads Models, G3 Models, O Model Africa and Shine Models; between these four agencies, over 600 local and international models are represented. “We’re also creating a hub for freelancers here, for those who don’t have access to the facilities we will have on offer, for content production,” explains Paul. Also on site will be hair, make-up and styling experts, while creative consultancy, production management and casting can all be handled simultaneously at Shine studios. Visit www.shinegroup.com

How well do you know Braamfontein

The name Braamfontein dates from at least as early as 1853, when this farm to the north-west of Randjeslaagte belonged to Gert Bezuidenhout. In that year he applied to the government to have his farm surveyed. Barely five years later, in 1858, Gert sold his farm to FJ Bezuidenhout.
Like so many farms on the Witwatersrand, Braamfontein was subdivided early on, indicating a fairly dense population in the area. Two other Bezuidenhouts, Gerhardus Petrus and Cornelis Willem, each purchased one third of the farm in 1862, and a third part went to Frans Johannes van Dijk. Between 1862 and 1886 different portions were further subdivided, at escalating prices.
Three other well-known owners were Johannes Jacobus Lindeque, who in 1884, bought a section where the Country Club was established in 1906, and Frans Eduard and Louwrens Geldenhuys, both personalities in Afrikaner circles in Johannesburg.
The first suburb established on the farm Braamfontein in 1888-1889 was unofficially named after the farm, in reality being an official extension of Johannesburg proper. Today this area is still called Braamfontein. There was, however, an earlier but unsuccessful effort to create a suburb prior to this.
Source: Early Johannesburg: Its Buildings and Its People

Exciting Times

Many property experts (as well as us) are predicting that the property market will start to take a turn for the better in the latter half of this year. To prepare for this upturn, We suggest that those interested in getting into the market start doing their homework now. Start looking at your options, work out what you can comfortably afford and try and get into the market as soon as you detect an improvement.
We must stress that the world has see some tough times over the last 12 months. There has been alot of artifical lowering of interest rates to help stimulate markets. This might cause a hyper inflation senario in 2 to 3 years time. We will be doing a little story on fixing your rates later in the year to give you all the pros and cons.

for now start doing your home work and start looking for those great deals,

Keeping your Tenants happy

Keeping your tenants happy saves you money in the long run. Happy tenants tend to stay in your rental property longer and don’t complain much. Here are some attributes about rental properties that tend to keep tenants happy over the long haul:

A place with not-too-high rent increases. Don’t be unreasonable and raise the tenant rents too high and too often. If the market is a strong market, explain what the rental market is for their apartment and let them know you value them as great tenants and you are keeping the property under the market for that reason.

A place tenants are proud to live. Everyone wants to live where they can invite their friends and family over and be proud of where they live. By providing a rental property that is clean and well maintained, you are providing a property that your tenants will be proud to show off.

A place that they can move into that’s clean. They want to be able to put their belongings in a clean environment. Be sure old odors are gone and nothing of the past tenants’ is left over.
A place with well-kept common areas and clean grounds. Clean laundry room, clean pool, well maintained landscape, and well lit parking lot.

A place that’s safe and well lit. Let them know that you feel safety is important. Be sure all the smoke detectors are working and that they know how to turn off the water if needed.
A place where everything’s in working order. Make sure before your tenants move in that all the appliances work, and the furnace and air conditioning are in working order.

A place that respects tenants’ privacy. Don’t go over to the property unannounced; instead, let your tenants know you are coming over prior to showing up. This is their home, too, while they pay the rent and live there.

A place that encourages good neighbors. Don’t lose a good tenant due to a bad tenant making noise and causing problems. Take care of the problem. Be sure to let the good tenants know you are attempting to solve the problem.

A place where the rental manager truly cares about the property. From the very beginning, tenants can tell whether they are renting from someone who cares about the property, based on the condition and the reaction to any request before the tenants move in.

A place where the manager responds to reasonable maintenance requests. Tenants want to know that when they have a problem, it will be addressed and taken care of in a reasonable time.

A place that keeps tenants informed. No one likes surprises, so keep your tenants informed. If the plumber is really busy and cannot come out for a couple of days, let the tenants know that. If you cannot make a scheduled appointment, show common courtesy by letting tenants know.

A place with fair rules that are monitored and communicated to all tenants. These are rules the tenants would agree to and sign prior to moving in. It is important that all tenants follow the same rules and that you as the owner see that they are enforced.

Being fair and reasonable will keep tenants a whole lot longer. You don’t have to make long-lasting friends to have a long-lasting tenant.

Managing your property

The positive aspects of renting property are as follows; a lot of these apply whether you hire a property management company or not:

1. You own your own business.
2. You save the fees charged by a property management professional.
3. Technology has made self-managing your properties easier than in the past.
4. It’s a people business.
5. It can be fun and challenging.
6. You may enjoy it enough to make it your career and even manage property owned by others.
7. After everything is set up properly, it’s not a lot of work.
8. You can see and touch your investment.
9. The business provides continual income rather than the one-time income from a sale.
10. With creativity, you can purchase with little cash.
11. You can keep a home you may want to move back to later.
12. Renting properties is usually profitable.
13. Renting property provides current or future lodging for your children.
14. Buying your first property starts you on your way to purchasing more.
15. Property values usually appreciate.
16. You diversify your investments.
17. There are great tax advantages.
18. It can be a second income.
19. It can be a part of your retirement.
20. It can be a long-term business.

Cons of Managing Rental Property

You may have days when you question why you purchased rental property and became a landlord. But then, when you arrange an appraisal and find that your property value has gone up, you’re probably pleased with the gain in value. The time, money, and effort suddenly are all worthwhile, and you realize that hard work really does pay off.

1. It takes a lot of time in the beginning to set things up.
2. There are many details you need to learn and understand.
3. The initial outlay may be greater than with other investments.
4. Your property may have a negative cash flow, especially at first.
5. Technology is hard to keep up with and takes time.
6. Reporting income and expenses on your tax return requires additional time and knowledge.
7. Like anything, there is always a risk involved.
8. The hours are not 9 to 5.
9. It is like having a second job, often without vacations.
10. Dropping everything to respond to an emergency isn’t fun.
11. Finding and dealing with contractors can be tricky.
12. It is a people business, which means you have to enjoy talking to people.
    You listen to many complaints.
13. You can always hire a professional to rent and/or manage your property. This way you don’t have to deal with the emergency call in the middle of the night or all the problems that arise from dealing with different types of people. You let them take on the time-consuming tasks while you receive the income.
    

Questions for your new tenents

We often have limited time, here are a few question that you should ask when a tenant calls you to make an appointment. if their answers don't satisfy you, you don't wast your time on a fruitless viewing.

If you do make an appointment to see the unit, ask them to bring ID.

1. What are the best phone numbers to reach you should we get disconnected or I need to reschedule an appointment? (home, cell and and work, if possible)- So that you can call them back if necessary. (Remember, they have yours!)
2. 
   How many people will be living in the unit, even if temporarily?
3. 
   What's your current situation?/ Where are you renting now?
4. 
   Why are you looking to move?
5. 
   When are you looking to move?
6. 
   Do you think your current landlord would give you a good reference?
7. 
   Do you have any pets? (if so, what kind?)
8. 
   Does anyone who wants to rent this property smoke?
9. 
   How many vehicles total would everyone need to park at the property? (not normally a problem in the CBD)
10. 
    In what other areas would you be interested in renting? (in case you have vacant units in other units, too.)
11. 
    How many bedrooms do you need?
12. 
    How long are you looking to rent?
13. 
    How much do you make per week/month/year (whichever seems most appropriate)? How about the other applicants? Is this "gross income" or "take home" income?

The right TENANT

When you buy a rental property, it is a huge financial investment. Why then, do landlords end up with tenants who do not pay their rent, destroy the apartment, loss of rent money, inflict extreme stress, then leave your unit to move into another newly prepared unit? What can a landlord do to prevent renting to an irresponsible or high-risk tenant?
One of the most important decisions a landlord with vacant unit will make is to choose a tenant who will pay the rent, respect the property and the other tenants, and obey the laws of the land and the rules of their lease.

If you have rental property, you want to get the most income out of it, while keeping expenses low on your investment. You may not always have the funds or the desire to use an outside real estate agent. There are also landlords who like to rent their own apartments in order to control who will live either with them and their family in the same building, or in an investment apartment.
Landlords need to learn the basic and effective methods of the tenant selection process used by Blue Label property managers. Landlords need to learn from the experiences of professional apartment renters, who can recommend which decisions and procedures work best, and advise which poorly used techniques will not get you the kind of tenant you need and desire. Over our career, we have rented many of the markets apartments. We have three primary reasons why we think homeowners, landlords, and/or managers end up with poor choices of tenants. For the most part, there are three areas of omission:

1. Owners do not check or verify all of the applicant’s information through a rental application;

2. Owners accept the rental applicant’s explanations and excuses instead of searching for the facts;

3. Owners do not ask the right questions or enough questions by interviewing each candidate
Some homeowners allow a total stranger to occupy their real estate financial investment. They take the minimal amount of time and spend as little money possible to investigate a rental applicant. If the applicant is friendly, smiles a lot, and appears to be ‘neat and clean’, he or she can get the keys to an apartment with little else than a security deposit and the first month’s rent. There are owners who will rent their apartments to their relatives and/or friends of their children or neighbors, without checking anything at all.

Rental applicants come to you for a roof over their head on a month-to-month paying basis for a pre-determined amount of time. There is a cost to having shelter provided to an individual or family. Those who do not pay for their shelter must be asked to leave the premises, so that a more responsible family may benefit from the housing.
There are costs associated with providing decent, safe, and sanitary housing. A homeowner needs to check out a rental applicant’s information in order to attempt to ensure that you will receive the rent every month, on time, and that the tenant will respect the condition of the apartment and building. The return in spending the time and money in checking out a rental applicant as thoroughly as possible in advance of handing out the keys, will be the long-term stability of your property, and especially your finances from that property.
It is important to remember what we gain from using a practical approach to renting out a vacant unit.
When you take the ‘lazy’ approach to picking a tenant, when you cut corners, spend less or no money to verify application information, when you listen to excuses, or just do not pay enough attention to the answers, you can rent an apartment to your peril. Many owners realize too late they have allowed an applicant to slip through the process. Perhaps the unit has been vacant for a long time. Maybe the unit is not one of the most desirable in your portfolio, or is in a neighborhood that makes renting it out difficult. Whatever the reason, the time and money spent checking out every piece of information on the rental application is rewarded with a low-risk tenant. It is certainly cheaper than the eviction process.

Fedruary update

Good morning CBD Investors

First interest rate cut, now a bit of tax relief for us coming out of the budget speech. The great news was an increased exemption for interest and dividend income with company tax was unchanged.

Our tenants do not seen to have felt the credit crunch yet. Demand has been fantastic so far this year.

Bridgeview – (220 units) was 95% let in just 2 months, it is great to see how the efforts to clean up town are paying off.

Broadway – (140 units) now a little more than 1 year old. Cluster Consultants will be the new building managers taking over from Trafalgar this year. We are looking forward to working alongside them to make this another great building.
A first-class class start to the year with all our units let, we have had our team sort out a few maintenance items, shower doors and cupboard door wheels being the most common. A happy tenant is a paying tenant.

Madison – ( 67 units) Black & White properties have replaced Trafalgar as the building managers. Fully tell and still in very good shape.

Liberty – (120 units) is in good running order, Trafalgar just need to keep an eye on the levies arrears that seem to be a little high.

Time Square – (82 units) is well run with trustees that are keeping looked after.

100 Jorissen – (163 units) seems to be having a bit of a tough time coming right, with overcrowding becoming more noticeable. Overcrowding poses the biggest risk to CBD property. Overcrowding portrays a lack of management and interest that then filters down to the residence of the building, we are to have a chat with management to find out if they are aware of the problems.


2009 will be an interesting year with some investors sitting tight for now and some investors getting ready to start looking at new opportunities again.

We should all take a step back and put a little time into our portfolios; check up on body corporate, see that our banks are giving us the best rate, reduction costs and improving our systems to take the worries out of property.