Misuse of landlord insurance.

By
doublef
Published: January 3, 2009Posted in: Insurarance, Landlords, Letting agents, Property letting, Real Estate InvestingTags: , , , ,

I would like to tell you a story about how a letting agency misused my landlord insurance.

The letting agency sold me an awesome product, landlord insurance. If my tenant does not pay the insurance pays up to 3 months GREAT, or so I thought…

The first time I got suspicious was when I was notified that my property did not have a tenant and that the insurance had already paid out 3 months rent. I was furious, why was I not notified? The excuse I got was that the assigned agent was not very reliable and has been fired and that this would never happen again.

About 6 months after the incident I received an email from the new agent. He informed me that the property did not have a tenant and that the insurance had paid out 3 months rent. He can not help me any more and urged me to find a new letting agent. AGAIN!!! Why was I not informed.

My suspicion is that this company used this insurance to make money out of me. If they informed me earlier I could have done something about it, but no, they waited until the 3 months had past and then only informed me of their plans.

So the wrap up, always insist on financial documentation, on a monthly basis, that indicates that your property still has a tenant. Believe me, it will save you stress and money.

Make a real estate new year resolution.

By
doublef
Published: January 2, 2009Posted in: Real Estate Investing, Real estate marketTags: , , , , ,

Now that we are at the beginning of the new year I know that all of us have these wonderful dreams and resolutions. More exercise, less eating etc. etc. What if you made a resolution to get into the property market this year or to prepare to get in to real estate ASAP.

As I am sure you know by now here at Yes2Property we believe that if you want wealth and financial freedom property is the way to go. We urge you to get in to, if you aren’t already, real estate, even if the market looks grim.

On average a property doubles in value every seven years, imagine if you could, in seven years, have an extra property that you could sell or rent out for some extra cash, wouldn’t that be great!!!

If you are not yet in a position to do so start planning and get on with it. Get rid of that credit card, car payment and save more. When you are ready buy a second property and start creating your wealth.

Now I am sure you know people that will say that the property market has had it’s run and it’s now over, WRONG, property always work in cycles and has done so since real estate became an investment, it’s never too late to get in to the market, you must just plan, know the risks and DO IT!!!

Well I hope I have inspired you to think about real estate and let us know if you also think it is a good idea.

Renovate the right way.

By
Nats
Published: January 1, 2009Posted in: Property improvement, Real Estate InvestingTags: , , ,

We all seem to be suffering a little bit these days for a multitude of reasons only one of which is the cost of property.A cost related to this is property renovations.One will occasionally purchase a property with the intent to renovate certain aspects of it in the near future to bring it up to your standard,whatever that may be.

You should approach these kind of endeavours with a certain amount of caution.We have all heard horror stories of dodgy builders who start with the demolition process and then suddenly make-off with all the money you’ve paid them and never return to complete anything.This does not mean all South African builders are shady characters,but where possible try to get a word of mouth recommendation and view some of their previous work.

Some homeowners will decide to do the renovations themselves,this should also be very carefully thought through.Do you truly know what you are doing, are you fully aware of the difficulty of the project you intend to take on and do you have a realistic idea of how long it is going to take?

Before starting with any work ,whether you are doing it DIY or having a professional do the job, make sure you have submitted all your plans for approval and have all the required permits.Starting any construction before you have completed the approved paperwork is illegal and you may be forced to demolish what you have constructed.And even if you don’t get caught at the time you may want to sell one day and the new owner has a right to request the approved plans for any additions to the property, you could find yourself in trouble then too.

The one major mistake people make when deciding to start a DIY renovation is to under-budget the cost of everything.You need to ensure you have added all those small costs on too,like glue or sandpaper.These small items can really add up.Some advise you to add 30% on to your budget to compensate for any price increases you may experience and then a further 15% to cover any wastage of materials.

However you go about renovations a mistake in this arena is certainly a very costly one.Make sure you are as informed as possible and you will have far less nasty surprises.

Unethical agents may deliberately undervalue your home.

By
Nats
Published: January 1, 2009Posted in: Real Estate Investing, Selling real estate, real estate agentsTags: , , ,

It seems it really is tough times for almost everybody in South Africa.Reports are now surfacing of estate agents, desperate to get their commission quickly, deliberately under-valuing properties to encourage speedy sales.

This is pretty despicable, as we all know many property owners are already really suffering and some are even facing the prospect of going into negative equity.If property owners are convinced by agents that their homes are worth far less than what they really are they could stand to lose hundreds of thousands of rands.

While it must be extremely difficult for those working in the property industry at the moment it is no excuse to abuse a position of trust.Most estate agents are fully aware that their earnings are commission based and that there will be slow times as well as good times.They should not punish the people who enable them to do the job they have chosen.

This is certainly not always the case and your estate agent has probably given you a very fair evaluation.To set your mind at ease when considering an agent for the sale of your property treat them as you would any other potential employee, check their references.Ask them if they have passed the their NQF examinations, this should give you an indication if the person is interested in bettering their career prospects.

Also ask them what market research they have to back their evaluation and how many sales they have actually had in the last year.A reputable agent will have no problem supplying any relevant information to you.

As a seller you should be very comfortable with the person you entrust to sell your home, not only do you allow them access to your home but they are directly involved in how much money you will receive for the property.If you feel your agent doesn’t have your best interests at heart or that they are perhaps bullying you into a sale don’t forget that it is your home.Report the person to their superiors if necessary or if they don’t have any or don’t help you contact the EAAB (Estate Agency Affairs Board).They will be able to advise you as to what to do next.

If you check out your agents credentials you should have no further problems and by using a company that has a reputation to protect you should be able to trust them to get you the best deal possible.If you suspect an agent is trying to get a quick sale for their own sake take the appropriate steps to protect your investment.Ignoring it could cost you alot of money.

Some agents lower their commissions.

By
Nats
Published: November 25, 2008Posted in: Real Estate InvestingTags: , , , , ,

We have all become accustomed to agents charging between 5% and 8% of the purchase price of a home to bring the buyers and sellers together.This may all be changing due to the poor performing property market we are currently experiencing.Some agents are hoping to sell more properties by reducing their commission fee.

There have been some agents coming forward to say that they have reduced their commission to under 5%, and have gone so far as to say this is helping their property sales.On top of that there are those agents who are also then giving discount of up to another 1% on that already incredibly low rate.Although there are many who support this move there are many more who disagree with the idea.

Some are saying it may set a dangerous precedent for future sales and other agents who are not willing to lower their commission.Those not willing to reduce their commission have said that anything under 5% would greatly affect their income in a very negative way.

Most experts involved in the debate are advising to not decrease commissions any further and to rather take that step when the market improves and there are more buyers.They add that while the seller may be paying a wonderfully low commission to the agent this may affect the marketing of the property for sale in a very negative manner if there are no more funds available.

So many people are affected when market conditions change for the worse.We tend to focus on the owner of the property because they have the most to lose if things go wrong, but maybe we should spare a thought for the people who make alot of the deals happen.For the most part they rely on us for their income and sometimes have to take drastic measures to make ends meet.Hopefully the market improves soon for all concerned.

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