Ideal Managers

Ideal Managers - www.treoc.com
By Coert Coetzee

Many of our members are business owners or hold senior positions at big companies. This week I would like to speak specifically to them, but property investors needn’t feel excluded, because as I always say at the seminar: a property portfolio is merely a business, and should be handled as such.

Until 1990 I worked for big corporate companies; marketing and risk management were the two departments in which I specialised. I held senior positions and frequently had to evaluate people for management positions in my departments. Through our risk management activities I was also involved in the management of hundreds of independent companies (our clients). Since 1990 I’ve been involved with my own companies, and because of my philosophy of working on my business rather than in my business, I have always been dependent on good managers. So over the years I have built up solid experience around what makes a good manager. During a presentation I did at one of Treoc Business Academy’s courses recently, someone asked me whether I could define a good manager.

It is very important that you appoint good managers, because this can mean the difference between success and failure. It’s the same as our property managers or letting agents: the wrong appointments cause a lot of problems.

Before I tell you the characteristics of a good manager, according to my experience, I’d first like to tell you what you shouldn’t do. The biggest mistake people make when they appoint a marketing manager, for example, is to make the best marketer the manager. I’m not saying that good marketers can’t be good managers as well, but don’t imagine that it is automatically going to be the case. In most cases it doesn’t work, and in the end you sit with bad management and bad sales.

In the same way, a good hairdresser does not automatically make a good salon manager, or a good bricklayer a good foreman. A good employee doesn’t automatically make a good business owner either. Most entrepreneurs or people who start their own businesses were good employees, and I think that’s one of the main reasons that as many as 80% of all new businesses are not successful. It also proves my point that good employees are not necessarily good managers, because that is why many new businesses fold: bad management!

I think we have a problematic subconscious belief that the best performer is obviously going to be the best candidate when we are looking for managers.

If the best performer is not necessarily the most suitable candidate, then who is? I look for the following characteristics:

Punctuality – someone who is late for work or an appointment is usually late with many other things too.
Honesty – everyone makes mistakes, but people who lie to cover up their mistakes lie about a lot of other things too.
Loyalty – people who are not loyal towards their partners, managers, employees, friends and clients are, without exception, not good managers. I have a saying: “My friends’ enemies are my enemies.” My experience has proven over and over through the years that anyone that does not support and live out the same principle will disappoint me at some time or another as a friend, partner or manager.
Self-motivated – employees that are self-motivated always impress me. Their output might not be the best, but they achieve it on their own. In contrast, the one with the best results might require my continual attention. You can see for yourself who manages and who is managed. Someone who has to be continually managed will certainly not be able to manage others.
Consistency – the dull guy in the corner’s output may not be the highest, but it is always good.
Organised – you can see this when you meet someone, or if you see his car or his office. Recently, upon a family member’s death, I visited the office of the executor of his estate. I had never seen that much chaos in an office in my life. And the service and product he provided looked like his office!
Outspoken – I like someone who can say their say (but I don’t like people with big mouths).
Humble – a good manager will always be humble without being obsequious, and will handle people with respect. Don’t confuse humility and respect with weakness. By the way, bullies never make good managers.
Calm – it always impresses me when people are able to handle crises with calmness.
Goal-orientated – I like people who know what they want and then work to achieve it.
As you can see, it’s quite a tall order and there’s no magic recipe for finding good managers. I have made a lot of mistakes in the past with appointments. I use psychometric testing before appointing a manager as well, and even that is not foolproof. Candidates sometimes hide character flaws so well that even psychologists cannot pick them up.

All that I would like to bring home with this article is that those with the best output do not necessarily make good managers, and that this is the most common mistake that is made when it comes to appointments.

The second most common mistake made by businesses with regard to appointments is that if they have made a mistake they can’t or don’t want to fix it. As soon as you see that it was a mistake, correct it. Do it immediately, do it according to legislation and do it with respect.

Be pro-active: avoid foreclosure of your property

Industry Comment by Theuns Hanekom

Be pro-active: avoid foreclosure on your property

Many of you would agree that the property boom of the previous two or three years, have seen property prices soaring through the roof. It is not uncommon to find a 70 square metre flat or duplex costing R 750k or even much more in certain areas. Quite often you would hear current home owners say how fortunate they are to own their property already, as they might not be able to afford their current property if they had to buy it again today. How are first-time home buyers, especially young people, able to afford to enter the world of property ownership?
As a result of a cumulative five percentage points’ increase over the past 18 months and tighter credit criteria implemented by the banks, it has become increasingly more difficult to set foot in the property market. Gone are the days where first-time home buyers could include their costs in the loan amount, and a 100% home loan these days are almost unheard of. A person, who could have afforded a 100% home loan on a property purchased for R 950k two years ago, would now only qualify for a home loan of R 650k.
Current home owners should do therefore whatever they can, to stay in the property owners’ market in the face of a tough economic environment and an ever increasing cost of living. Although these are very difficult times for many property owners, they should keep a long-term view of their investment in mind. So, if it means that you should stop eating out, cut back spending on clothing and other luxuries and postponing your holiday plans for a year or so, you will be well rewarded if that means the difference between keeping or losing your house.
Unfortunately, due to many reasons such as the loss of your job, unexpected illness and subsequent medical bills, etc, it does happen that some home owners may no longer be in a position to pay their monthly bond installments. Should this ever happen, it is most important to make contact with your bank immediately and explain your situation to them. Do not wait until you have missed two or three payments. Rather be pro-active and contact them as soon as you realize that you are unable to pay your bond.
The banks would much rather attempt to help their clients and restructure a repayment plan before initiating foreclosure procedures. They may extend the terms of your loan, thereby reducing your monthly payment. If you have a short-term’s cash flow problem, the banks may assist you with a three-month “payment holiday”, or even decide on an “interest only” payment for a short period. Of course, these interim measures will increase your total debt over the long term, but at least you will be able to keep your house. It is also highly probable that you will sell the property prior to the expiration of the bond term and, hopefully, you would be able to absorb those additional costs through good capital growth. Another way of alleviating cash flow problems is to register a second bond over your property in order to consolidate all your other debt such as credit cards and vehicle finance.
However, as willing as the banks are to assist clients in distress, they will not be able to help all their clients. If you approach the bank because you cannot make your monthly bond payment but you still have your DSTV subscription, the banks have to wonder if the client is really serious about wanting to survive financially. The banks will look at assisting clients where it is likely that they would be able to meet their normal installments in the medium term going forward. If it seems unlikely that the client would be unable to meet his obligations over the long term, it might be in the clien’ts interest to try and dispose of the property as soon as possible in order to avoid foreclosure proceedings.

Rate of inflation to slow

Article By: Evan Pickworth

Mon, 21 Jul 2008 08:06

The rates of growth in diesel, petrol and food inflation should start coming down towards the end of the year, says chief economist from Econometrix Dr Azar Jammine.

"Remember, inflation does not measure whether prices are rising, but the rate at which they are increasing," he explains.

"And the rate of growth in food is coming down and may have peaked. The same for diesel and petrol. In fact, for rates to grow oil has to rise to $250/barrel or more, which is unlikely. Even oil at $140/150 will cause inflation rates on petrol and diesel to come down significantly," says Jammine.

He says he expects a peak in CPIX at 12.5 percent/13 percent and for it to then move back below six percent beyond 2011.

He adds that interest rates will probably increase by another 100 basis points, stay strong for a year and then come down marginally after that.

"The central bank is hopefully looking forward – we get a sense they are – and will anticipate rates coming down and therefore start cutting."

Jammine does note, however, that inflation expectations will continue to rise as underlying inflation creeps higher.

"Underlying inflation was at 4.5 percent or so for some time, but it has started to escalate with the real damage caused by Eskom's request for a 60 percent price increase on the back of higher oil and steel prices. That sent inflation expectations sky-high," concluded Jammine.

South Africa's central bank is set to make its next rates decision on 14 August.

I-Net Bridge

Facebook is SA firms' best friend

Jul 16 2008 4:35PM

Jessica Hall

Johannesburg - South African companies are taking advantage of social networking website Facebook as a cheaper and more efficient way of marketing their businesses.

"Facebook opens a social networking platform that allows companies to engage on a more personal level at a fraction of the cost," says Mike Stopforth, the CEO of online reputation management company Cerebra which works with companies like SA's biggest retail bank, Absa, on their Facebook presence.

Facebook has become a very popular platform for South Africans with online access; Facebook says there are 683 943 users registered on its South Africa network grouping.

According to international internet information company Alexa, the South Africa network is the sixth largest among country networks on Facebook.

It also reported that Facebook is the second-most visited site in South Africa.

Local internet advocacy group MyBroadband says that the average duration of a Facebook session for South African employees with internet access is 30 minutes.

Given the site's rise in popularity among online users, it is only fitting that companies are finding it easier to reach their target markets through this digital medium.

Kate Elphick, the director of Digital Bridges, a company which helps businesses build work tools and practices using the most recent (web 2.0) technologies, says that Facebook allows companies "to select exactly what markets they are aiming for in a cost-effective way. It is a strategic approach to networking socially".

Quest Flexible Staffing Solutions is first among local recruitment companies to tap into Facebook.

In April this year, it launched a Facebook application that allows the public to assess personality types and establish a line of contact between the applicant and agency.

Quest's managing executive, Margot Errington, says the launch of Quest's Facebook application is in line with the company's strategy of using innovative recruitment methods to attract skilled applicants from specific communities.

Errington says that companies first need to assess their needs before deciding to use Facebook as part of their marketing strategies. It depends on their intentions," she says. "The Facebook environment is not a space for business - it is a social space designed for empowerment."

Companies also need to be mindful of their tone and balance, says Errington: "They need to maintain professionalism and connect with people on a personal level.

The Facebook environment allows us to offer an alternative, more informal, less intimidating format whereby job seekers can investigate their opinions and sign up for employment."

As advertisers grapple with positioning companies online, social networking has emerged as a tool to help firms reach audiences more effectively, says Errington: "Typical banner advertising on Facebook has proven to be less effective than advertising on the internet at large, but branded applications are one of the most engaging ways to connect with an audience."

- Fin24.com

Rate hike becoming "unlikely"

Johannesburg - The acute slowdown in the economy coupled with the high base effect for many commodity and food prices as well as the re-weighting of the inflation index in 2009 makes a rate hike in August increasingly unlikely, say fund managers Stanlib.

They add that if there is a hike it would be only 50 basis points and the last in the rate hiking cycle.

"The market is very much pricing-in at least one further rate hike, with many analysts still talking about two further hikes," conclude the investment specialists.

- I-Net Bridge

http://www.fin24.com/articles/default/display_article.aspx?ArticleId=1518-25_2357736

Good luck

By Coert Coetzee

Sometimes I end my seminar with the words, “Good Luck!”

A few years ago after I had closed this way, someone came to me and complained about the words “Good Luck”. This person said that there is no such thing as good luck, that life is what you make of it and that these words were very inappropriate in light of the fact that my seminar would change people’s lives anyway. I listened to him and chose to say nothing, because I agreed and I disagreed, but that wasn’t the time and place to explain my point of view. The time has arrived now though, because the circumstances at the moment are the best we’ve had in many years for achieving success with property.

I read that Gary Player once said, “The more you practise the luckier you get.” These are wise words, because they support the notion that one creates one’s own luck. Everyone who comes to my seminar gets exactly the same advice; some use it to create millions and others are still sitting and waiting for their luck to turn. The unlucky ones then say that the successful ones were just lucky. This is true though, and the lucky ones will continue to get even luckier, while the unlucky ones become even more unlucky. You create your own world, so create a lucky one!

How can we do this? Most of you already know how, but for the sake of the unlucky ones I’m going to throw some light on the subject today. The next 10 points will put you on the path to everlasting luck:

Be early
As the saying goes, “The early bird catches the worm.” This isn’t just about getting up early and going to bed early; it’s about being first to take advantage of an opportunity – before the “unlucky” birds!

Make an impression
You have just one chance to make an impression on people, so use it. First impressions are lasting impressions. Remember that! Unhappy people usually make a negative impression.

Don’t underestimate the impact of a handshake. When you shake someone’s hand, make sure it’s a sturdy handshake, and always look the other person square in the eyes.

Be positive
Unlucky people usually look and sound negative. Teach yourself to look positive. No matter how unlucky you’re feeling, never say it and never show it. Put on your biggest smile and radiate positivity. Even if you’re bluffing, it doesn’t matter. If you always look and act happy, luck will come to you. Guaranteed!

Look for information
An idiot that looks happy just becomes a lucky idiot. Make it one of your goals to learn something new every day. Do courses and attend seminars. Read books; and if you don’t like reading, listen to audio books. If you ever see me with an iPod on an aeroplane, don’t think that it’s only music that I’m listening to!

Avoid negative people and strugglers
Avoid negative people like the plague. Cut them out of your life. Even get rid of your negative spouse! Our country has good divorce attorneys.

I surround myself only with positive people. We continually lift one another up. My wife Vanessa and I have been together for 20 years already, and ours is quite possibly the most positive and most fantastic marriage in the world.

Visualise your goal
Goals that cannot be dreamed about or visualised are not practical, or simply aren’t worth the effort. Goals that are exciting and achievable are goals that you can dream about. If you can dream it you can do it!

Take stock regularly
If you get unhappy because you think you’re not successful, it is because you don’t know that you are successful. Count your blessings and count them often, from the smallest to the biggest, and your gratitude and luck will know no limits.

Be prepared to change or adapt
The world is changing continually, and it’s not going to wait for us. What didn’t work today might work tomorrow and what worked yesterday might not work anymore today. If you continually take in information and so stay in touch with the changing world you will instinctively know when to change and how to change. Be prepared to listen to your instincts.

Give your tithe
Vanessa taught me that the first 10% of everything that we receive doesn’t belong to us. It belongs to God. So this is the amount that always appears right at the top of our budget. We did not make an agreement with God and we don’t expect anything in return, but strangely enough, the more we give Him, the more He gives us. Give it a try.

Be happy!
We are all just human, and when the storms of crime, interest rates, and so on are raging around us, it’s sometimes difficult to stay positive. To still look happy and feel lucky on top of that can be even more difficult. But I have found that the more problems you have, the more you need to be reminded of your good luck. So do these things and do them often. Do them every day, every moment if you can.

Luck and contentment are not things that happen only to other people.

(Coert Coetzee is the Founder of the TREOC Group consisting out of different companies and trusts. He is an experienced Business Owner and Property Investor and shares his experience and secrets of many years.)

Buyers turning to existing homes

The scales have tipped in favour of those looking to purchase property, and buyers looking for good returns and value will find opportunities aplenty in established homes.

So says Carlos Moreira, principal of the new Homenet Olympic branches in Alberton and Rosettenville, who has 18 years of real estate experience in Johannesburg's southern suburbs.

He says prevailing market conditions are making life difficult for developers. High land and material costs as well as a shortage of skills have resulted in many planned developments being put on hold or in unit prices being increased to try to make ends meet.

"As a result, we are witnessing a buyer shift towards established homes as they offer greater value for money. It is practically impossible for developers to build quality homes for under R1m. Comparatively, buyers can obtain an existing three-bedroom sectional title unit in Rosettenville for R450 000. A similar full title home can be bought in Alberton for around R1m.

"Most of those buying existing homes in our areas are first-time buyers and we encourage them to go in this direction as such homes represent great investment opportunities. Semi-detached houses in the 'Old South' of Johannesburg for example can be bought for between R700 000 and R800 000, refurbished and resold for over R1m.

"Alternatively, buyers can live in one half and lease the other for around R3500 a month to assist with the bond."

Meanwhile, he says, the time is ripe for entry-level and middle-income homeowners to upgrade. "Properties at the top end of the market in areas such as Glenvista and Oakdene have stagnated to some extent with many sellers dropping their prices, which means real bargains for those looking to move up in the world."

http://www.myproperty.co.za/news/201332/Buyers_turning_to_existing_homes.html

bondapply.com is 1 year old!!

On 1 July 2007 I jumped in and started this baby.

Well, a year has past, and I am still here!

I chose not to listen to warnings of the new credit act, rising interest rates, and the doom and gloom that was predicted.

Still standing!

Thanks to all of you who are making the journey such a joy.

A lot of us know we have what it takes--the looks, the education, the talent, the credentials. But in certain areas, we're paralyzed. We're not being stopped by something on the outside, but by something on the inside.

—Excerpted from A Return to Love: Reflections on the Principles of A Course in Miracles, oprah.com

I have expanded my services to include:

I deal with Standard Bank, ABSA, Barclays, Nedbank, FNB, Prop24, Integer, SA Home Loans, Sanlam
I do switches to and from all banks, shop around for best interest rates and save clients money
Debt consolidation and removal from ITC & Experian
Personal loans
Bridging finance
Commercial bonds with Business Partners, Imperial, Standard Bank, ABSA


Vania van Dalen
www.bondapply.com
vania@bondapply.com

Shedding light on housing statistics - by Keith Wakefield

There is a lot of negative sentiment at the moment about house prices fuelled by information that is often out of context or misinterpreted.

Simply put the average house price is that of the majority of properties changing hands. Reports that the average house price has come down means that a greater number of cheaper properties are being sold. The reverse is also true. So when the average house price rises it means a greater number of more expensive properties are changing hands.

It should also be understood that the data used by banks to produce house price indices is sourced from the number and value of mortgages being processed by the institution, and this does lead to differences in reporting these prices.

Standard Bank points out that measuring house prices is complicated because data usually comes from the properties sold during a period rather than a well-designed representative sample of houses sold.

Standard Bank’s average house is currently priced at R520 000 and it states 50% of the houses country-wide are priced at more than this and 50% at less.

Another aspect to understand is the difference between actual house prices and house price growth, which has been reported as dropping for some months.

ABSA bases its sample on houses it has mortgaged between 80 and 400 square metres priced up to R2, 7 million. If one had bought this middle segment house in December 2006 when it was reported that nominal house price growth had declined to 13, 5% you would have paid R857 400.

In May this average house price was reported at R960 000, when house price growth had dropped to a nominal 4, 3% in the middle segment of the market.

So, despite declining house price growth this average house has, in 15 months, still increased in price by almost R100 000. This may sound ridiculous but I use this as an example to show that a lot of panic is being created unnecessarily

I need to emphasise that property is a long-term investment. You cannot buy one month and expect to sell for thousands more the next. The stories one hears of speculators buying and selling a property for huge profits in the space of a few months were indicative of the abnormal market conditions of 2002 to 2005.

If you have owned your property for some years, and kept it in good condition, you are more likely to sell it for more than you bought and have enough to upgrade.

Ultimately market value of property is determined by what a willing buyer is prepared to pay. Therefore it would be better to rely on a comparative market analysis of similar property in your area than be unduly influenced by figures that are of a very general nature.


http://www.myproperty.co.za/news/198652/Shedding_light_on_housing_statistics_-_by_Keith_Wakefield.html

Motivation

There is no limit to what you can imagine.
And with commitment, with effort,
what you can imagine you can become.

Put your mind to work for you.
Believe that you can do it.
The world will tell you that you can't.
Yet, in your belief you'll find the strength, you'll find the ability, to do it anyway.

Fractional Ownership - the new solution to having a "huisie by die see"?

Industry Comment by Theuns Hanekom - SAMO

I am sure many of you still remember the “good old days” when many
families could still afford both their primary residence as well as a holiday
home at their favourite holiday destination. And as Koos Kombuis sings:
“…almal wil ‘n huisie by die see hê…” But, with the sharp rise in property
prices over the past 5 years or so, especially those in coastal towns, as well as
the latest increase in interest rates, it might seem to many of us, that the
closest we will ever come to owning a “huisie by die see”, will be if we join
Koos Kombuis in singing his well-known song.

That is, of course, until you discover the concept of Fractional Ownership.
Many of the leading estate agencies such as Pam Golding Properties and Seeff
Properties offer Fractional Ownership packages at many of the leading golf,
coastal and game resorts. Although fractional ownership has been around for
quite a few years in South Africa, there are still a lot of misconceptions about
what it is exactly, how it differs from timeshare, and whether or not it is a
sustainable concept.

Fractional Ownership, or Property Syndication as it is also known, is a manner
in which more than one individual or legal entity, acquires ownership of an
asset, and more specifically the ownership of fixed property through a legal
entity. Simply put, a company will own the fixed property, and a limited
number of shareholders will, through their shareholding in the company,
become the owners of the fixed property. The shareholders are the owners of
the property and will therefore be jointly responsible (according to their
shareholding in the company) for all costs relating to the property, including
the purchase price of the property and all maintenance costs. In return, the
shareholders will own a share in the property and therefore will be entitled to
use the property according to the rules and regulations contained in their
shareholders’ agreement. Therefore, if you own 8% in the company, you will
be entitled to 4 weeks use per year, or if you own 12% in the company, you
are entitled to 6 weeks per year.

There are a number of benefits to Fractional Ownership. Firstly, if you were
to buy a second property on your own, you would have to pay the full
purchase price yourself. And let’s face it; you can only go on holiday for a so
many days in a year. You would therefore be paying for a full year’s use, but
only use it for about 4 weeks per year. With Fractional Ownership, you will
pay only for the value of your 8% share in the property, and still be able to
use it for 4 weeks’ holiday per year. Through minimal capital outlay, you get
the maximum return. Secondly, as you are investing in fixed property, you
get capital growth. Thirdly, the maintenance and cost thereof is shared by all
the shareholders. In most instances a maintenance company is appointed to
look after the maintenance of the property, allowing the owners carefree use
of the property. Another benefit is that you may sell your share in the
company at a price proportionate to the value of the property.

Although this might sound very similar to time-share, there are some major
differences. With time-share, you only buy “time” or “use” of a specific
property. You don’t own the property or shares in the property holding
company as with Fractional Ownership. And as the value of the property
increases, so does the value of your investment, which is not necessarily the
case with time-share.

Another drawback of time-share is that there are usually contract terms,
which need to expire before you may sell your share, but with Fractional
Ownership you may sell your shares whenever you want to.

Although time-share has over the years created a lot of negative sentiment,
prospective Fractional Ownership buyers can take some comfort in the fact
that the fractional ownership industry is a regulated industry. SAAFI (South
African Association of Fractional Intermediaries) was formed about 18 months
ago with specific regulations to which its members must adhere. The
advantages of such an industry body is that it will ensure the long terms
sustainability of fractional ownership, as a fractional ownership project will be
bound by the regulations for the entire existence of the project.

Of course there are other concerns with Fractional ownership. How will I sell
my investment if I want to? Will I get the weeks I want? What about my
fractional partners? And so on. All of these are reasonable questions that
have been dealt with in a number of ways by fractional ownership
developments. Fractional ownership will not be for everyone but it makes
sense for my family and me and might suit you or your clients.

I believe Fractional Ownership is well worth having a look at and who knows,
maybe having a “huisie by die see” might be more realistic than you think!

Auctions and Rates

by Coert Coetzee
(Coert Coetzee is the Founder of the TREOC Group consisting out of different companies and trusts. He is an experienced Business Owner and Property Investor and shares his experience and secrets of many years.) www.treoc.com
Edition no. 159


Auctions and Rates
By Coert Coetzee

Rate Abuse

Interest rates are usually used to combat inflation, and although I don’t always agree with this, it does make a certain amount of sense. The Reserve Bank’s thinking is that high levels of debt lead to high inflation. So, pushing the interest rate up discourages people from making debt. But what the Reserve Bank loses sight of entirely is that there are two kinds of debt: good debt and bad debt.

Good debt is, for example, the bond you have on a property. I call this good debt because the house’s value increases while your debt stays the same. By the time the bond is registered, the house is already worth more than the debt. In contrast with this, bad debt includes the debt you have on credit cards, retail accounts and even cars, because the value of a car immediately drops to about 20% less than the debt after you buy it, and it’s the same with clothes and other consumer goods. This is the type of debt that makes you poorer, while good debt makes you richer.

So if the government were to one day exclude interest on bonds or unhook them from the prime rate, I would agree 100% that interest rate increases are the answer to runaway inflation. So normally I’m half for it and half against it, but what’s happening at the moment is completely wrong as far as I’m concerned. Inflation is not being driven by debt. The current inflation is being driven by the high oil price. Now I ask you, how on earth is a higher interest rate going to bring the petrol-price-driven inflation under control? I think it will have the opposite effect. It’s like trying to put a fire out using petrol.

Whatever the case, as ordinary people we have no say in these matters; the interest rate has gone up again this week by half a percentage point, and is now sitting at 15.5%. So let’s rather look at how we can cope with the higher bond repayments:

Don’t ignore the problem. It won’t go away on its own – not quickly, in any case.
Extend the term of your bond to 30 years. It will cost nothing. Just speak to the bank.
Talk to your letting agent and where possible, increase the rental.
If you are still struggling, talk to your bank and try to get a payment holiday. It might be possible to get up to three months.
If the problem is still too big, let Clive Bydawell at Treoc Property Exchange know that you are looking for a buyer. We have plenty of buyers, but remember that they’re very choosy now. But if you are prepared to sell at a price equal to the outstanding bond, you’ll immediately be rid of the problem and your reputation will be safe. As soon as the market turns, you can buy again, but then you should do so according to the Treoc Way.
If you aren’t prepared to sell the property at a lower price, or aren’t successful with this, and you can’t pay the bank, then you have only one option and that is to go and see an attorney in order to make the liquidation process as painless as possible because the banks are not going to feel sorry for you.

I have a number of trusts with properties in them. I made provision long ago for these high interest rates, and so I have no problem with the extra expenses caused by the rates. Although I’m prepared, there are limits to even my ability to pay if the rates stay high for too long. For example, I can carry a rate of 25% for two years with my current cash provisions. After that I’ll have problems too. Even if the worst happens though, I’ll never lose all my properties, because my properties are grouped in different trusts. I won’t lose my assets either, like my private residence or my vehicles, because they are debt-free and not in the same trusts as my properties with bonds. That’s just one of the elements of the Treoc Way. There are a lot more, and the Treoc Way is the reason that I and thousands of our other club members are so excited about the current market conditions. For us this is a time to buy.

I’ve noticed that all the American writers and “gurus” are now selling their American ideas and methods in South Africa. Last month I attended the seminar of a well-known American property guru in Cape Town, and I was shocked at how little he knows about South Africa’s laws and properties, and yet he actually wants to come and teach us how to buy property in our own country. And this while his methods don’t even work in his own country! If his methods worked in his own country, why would he come here to barter his information for pathetic rands, when he could be making dollars? The only conclusion I can draw is that things are looking miserable in America, very miserable!

Someone at the seminar asked this guru why he is interested in property in South Africa. His answer was that he wants to diversify his portfolio. The following words come from one of America’s true, successful gurus. Warren Buffett says: “Diversification is a protection against ignorance. Diversification is not required if a person knows what they are doing.”

It’s auction time

Interest rates are climbing, and that means different things to different people: to some it means misery and to others opportunity. Quite simply, it’s a question of whether you are prepared for it or not. A good property investor is one who can make money in any cycle of the property market, because a good property investor is prepared. During the good times we prepare for the bad times that will inevitably come, because the property market works in cycles. That’s why there is a party on the way for prepared investors. It’s our first party since 2002, when interest rates peaked at 17%. True property investors know that we are now moving into a buyers’ market, the first one since 2002.

It’s a pity that there always have to be victims, and my heart bleeds for you, but unfortunately that’s just the way it is. The only thing I can do is help you get rid of your bonds as painlessly as possible.

My investors’ club and I have been preparing ourselves for six years already for the favourable market conditions we are now glimpsing, and so we’re going to take advantage of them, whether we feel sorry for the poor people who have to sell or not. Over the past six years I’ve repeatedly promised my readers and Treoc investors that I will write a special article about auctions when it is auction time again. That time has now arrived: it’s time to expand our portfolios.

Properties that are repossessed by the banks will eventually be sold at a sale-in-execution auction. The sheriff of the court arranges these auctions. Find out from your nearest magistrate who the sheriff is in the area in which you are interested in buying, and visit the sheriff’s office. Find out how often they hold auctions and whether you can get an auction list from them. On this list they should indicate the addresses and outstanding bond amounts of the properties that are for sale. You can then go and look at the houses before the day of the auction and start doing your sums.

Remember, it is risky to buy on auction, because you could be looking at a problem property. For this reason you should do your homework thoroughly. Keep the following points in mind:

A house that ends up on an auction could not be sold on the open market. If this is purely due to oversupply, then it’s understandable and not a problem, but if it’s for any other reason, you should find out what that reason is.
Someone who hasn’t paid his bond repayments has usually not been paying his electricity and levies either. So there will almost certainly be an arrear amount, and that amount is the buyer’s responsibility. Be warned that it can be a very large amount.
If you buy at an auction you need cash. The sheriff usually requires a deposit of around 10% of the purchase price, and then his commission is usually around 7%. So you will need 17% of the purchase price when you go to an auction; these amounts are payable in cash or with a guaranteed cheque immediately after the auction.
At the fall of the hammer the house becomes your responsibility. You take immediate occupation, and you can let the house out straight away if you want.
If it’s an own-title house, you must arrange short-term insurance on the structure that same day, because if squatters accidentally burn the house down that night, it will be your loss.
Arrange with the sheriff to give you 30 days to secure bond approval. The registration of the bond can take another three or four months on top of that, and during that time the sheriff will be the financier. He asks a much higher interest rate for that period, far higher than the banks, so you don’t want him involved for too long.
The bank will also be at the auction and will always bid against you up to the outstanding bond amount. Then they’ll be satisfied, and if no other investors are bidding against you, the bid will settle on you.
Don’t get involved in a bidding war. Decide beforehand what your maximum bid will be and when it goes higher than that, stop. Just let the other guy buy it, and don’t feel regret. There will be plenty more opportunities.
Also remember that problem cases usually offer the best opportunities, because most people are afraid of problems and won’t bid against you.
As you can see, it is a bit dangerous to buy on auctions. Therefore it is better to buy the properties before they end up on auction and that is what we prefer to do. Contact Clive Bydawell if you are a Platinum members and if you are interested in pre-repossessed bargains.

RICH MIND ... RICH MAN

My new book “Rich Mind ... Rich Man” is ready. I have decided not to publish this book in the conventional way, as I did with my previous book “Let there be Light on Wealth Creation”. This book will be available in e-format and it will be entirely free, because my goal with the books and articles that I write is to share my knowledge with people and not to make money for myself. I have enough money thanks to my unique ability for making money from property and business. And in fact, it’s precisely this money-making knowledge that I am going to share with you.

But, staying true to my way of doing things “differently”, “Rich Mind ... Rich Man” won’t follow the normal e-book route. I’m going to publish the book chapter by chapter on my personal website www.lightminded.com. I’ll publish a new chapter each week. The reason for this is that I want each chapter to sink in and be properly contemplated and digested. Also, on the Lightminded website you’ll be able to comment on each chapter if you want to. These comments will be preserved and in turn they’ll become material for my next book, because there’s no knowledge greater than collective knowledge. “Rich Mind ... Rich Man” and the way in which I’m going to publish it will therefore become the research project for the next book at the same time.

The proceeds from my previous book, which was published in the usual way at a price and with a publisher, go in full to my and Vanessa’s charity organisation, the Treoc Foundation, an Article 21 company. Although “Rich Mind ... Rich Man” is free, if you feel you want to you are welcome to make a donation of any amount to the Foundation at:

ABSA Bank
Branch Code 632 005
Savings Account No. 9157 822 665


Please take part in this project and help me to let the sun shine on as many people as possible. Click on the link below to visit my book right away.

Exciting Times

by Coert Coetzee
(Coert Coetzee is the Founder of the TREOC Group consisting out of different companies and trusts. He is an experienced Business Owner and Property Investor and shares his experience and secrets of many years.)
Edition no. 161 www.treoc.com


Exciting Times
By Coert Coetzee

During a recent seminar in Polokwane someone asked me what I think will happen with the economy if the current conditions continue. The short answer I gave this person was that it would benefit the Treoc investors, and I briefly expanded on why I think so. During a seminar there unfortunately isn’t time to go into the details of why I don’t have a problem with the current conditions. It’s not a question that can be answered briefly, and so I’ve decided to expand on it a bit more in this article.

Let’s first look at what the conditions are in which we apparently find ourselves at the moment:

The interest rate is sitting at 15.5%, which is the highest it’s been since 2002, when it peaked at 17%.
Petrol prices are higher than ever.
Inflation is sky-high.
Property prices have doubled in the past five years, but growth is currently sitting at less than 10% per year.
Salaries have not grown at nearly the same rate as houses in the past five years, and so fewer ordinary people can qualify for bonds.
Rental is currently showing an excellent 15% growth per year, but unfortunately the rent/value ratios are still low. This makes property unattractive for uninformed investors.
The country is suffering electricity shortages.
The credit act has neutralised a lot of potential property buyers, because expenses now count against you when it comes to affordability.
For the uninformed layman the factors mentioned above make the situation look very bleak indeed, but for the informed investor these factors indicate the most promising conditions in four years. Despite the hundreds of seminars we’ve presented, the majority of so-called property investors in South Africa are still not educated investors and don’t understand why the above-mentioned factors count in an investor’s favour. Let me give you the reasons:

All these “negative” factors contribute to more people thinking that they cannot afford their own properties.
Fewer tenants buy property due to the reasons above – and, of course, I never invite my tenants to the seminar. So they stay tenants for longer than they want to.
New tenants keep entering the market, because the middle-class is still growing at a phenomenal rate. The result of this is that the demand for rentals is outstripping supply – and that’s why rental is currently growing by 15% or more.
Fewer people are buying, because few people have the knowledge of an educated investor. This is causing prices to drop, creating a perfect buyers’ market for the informed investors. These are the best buying conditions since 2002!
The electricity shortage has put a damper on new property developments, causing supply to drop. When the market turns (as it has been doing for centuries already) and demand rises, we are going to have an enormous housing shortage, which will then cause the prices of houses to go through the roof.
Because of the credit act that was implemented last year, expenses in your personal capacity are now taken into consideration when you try to qualify for a bond. This has made millions of people “unfinanceable”. But if you buy using the correct vehicle – like a double-trust structure – you can qualify for more bonds than ever before. Serious investors all work with the right structures, and we are having a party right now!
But the market is changing, and one of the unique characteristics of successful investors is their ability to adjust to a changing market. A good investor must be able to read the market. At Treoc we invest mainly in entry-level properties, and here the petrol price plays a big role. Our type of tenant always likes to live as close as possible to their place of work, but now with the rising petrol price that’s becoming even more of an issue. So buy close to train stations or taxi ranks if you want to have an uninterrupted flow of tenants wanting to rent your property.

Something else to remember if you invest in my type of property is to buy close to primary schools, because a lot of our tenants have children at school. It’s ideal for them if the children can walk to school and back. Otherwise transport has to be arranged for the children, which costs money.

The ideal location for my type of property is therefore close to schools and places of work, or if that’s not possible, near public transport.

Enjoy the market; it’s a buyer’s paradise.

Happy House Hunting!

What goes up, must come down

Draft media release

What goes up, must come down

Alwyn van der Merwe, director of investments at (SPI) goes against the grain, saying that high oil prices are not sustainable and explains just why he thinks so…

Johannesburg, June 19, 2008: The oil price is not sustainable at its current high levels and reserves are simply not as critically low as many believe them to be. This is according to Alwyn van der Merwe, director of investments at Sanlam Private Investments (SPI), who was speaking at a second quarter market review today.

Van der Merwe said that, even though the price of oil had spiraled from $60 to $135 per barrel in the past 12 months, the medium to longer term outlook for the oil price was at significantly lower levels relative to the lofty current price. “Of course, the oil price is currently high because of risk priced in - and justifiably so, based on very low spare capacity - but this is simply not sustainable in the long term.”

Van der Merwe said that one of the key reasons for SPI’s view was that it did not share widespread concerns that conventional reserves were at critically low levels. “Based on estimates by BP we hold the view that global oil resources still have in excess of forty years of production left,” he said in response to the theory that low reserve levels have contributed to increasing prices. In light of this, among other factors, he believes that in the long term the oil price should come down.

Van der Merwe also believes that the strains on current capacity utilization should ease in the next few years as investments on future production in the last five to ten years is expected to come on stream. Oil has also become a less affordable commodity. Oil consumption expressed as a percentage of local GDP, is running at a forty year high – a figure that is not sustainable and could be expected to change future demand patterns. High prices will ultimately change behavior patterns over the longer term. Where possible users will either use less oil or will try to develop alternatives for a commodity with traditionally limited substitutes.

Examining the reasons behind the current price hike, Van der Merwe said one critical factor that drove up the price of oil was the shortage of spare capacity in the oil producing world. If the oil producers do not have spare capacity, market participants will drive the price to much higher levels given the political risks associated with many producers and frequent historic incidents that have disrupted supplies. “There is a big premium in the current oil price based on the perceived risk by the market.

He said these were not the only factors driving the oil price higher. “Many commentators have argued that speculators have contributed to driving up the oil price. Although it may be difficult to quantify the role of speculators, it would be fair to say that some speculative activity added to the high oil price. In addition the cost of production has increased significantly as the inputs in the production process have gone up sharply.

” However these factors were not enough to justify the current price and, according to Van der Merwe, certainly not enough to sustain it. One could argue that these risks or perceived risks are not enough to explain an oil price that jumped from $60 a year ago to the current $135 plus price now, but when you find supply side disruption where capacity is tight, it is understandable that the price will respond aggressively.”


Despite his belief that the price is unsustainably high on the long term, it has become a lottery to forecast over the shorter term. He therefore still remains cautious on the global economic growth outlook due to the significant impact the high oil prices will have on global growth and local disposable income. “Historically, global growth suffered each time there was an oil shock. This time it may be no different,” he said.

“There are serious inflation implications. Locally, the high oil price is partly responsible for the inflation rate that is way outside the official target range of three to six percent.

A combination of lower growth and higher inflation will cause a dilemma for monetary policy makers,” he says. While the oil price remains at these levels, it is tough to argue that the governor of the Reserve Bank, Mr Tito Mboweni, will apply a more accommodative stance when he formulates monetary policy.

The high oil price impacts negatively on the currency. The terms of trade (ratio between import and export prices) is likely to come under pressure and therefore will put further pressure on the South African currency. “It is for that reason that we argue that investors should ensure that their overall portolios are well diversified geographically. The same argument applies to an equity only portfolio. Investors should ensure that they are sufficiently exposed the industrial rand hedge shares (such as Remgro and SA Breweries) that will protect them against a decline in the rand but also against the risks of subdued global economic growth,” he said.
In conclusion, the short term outlook for the oil price remains uncertain. In the longer term perspective the best cure for the current high prices would be high prices. “This means that the high prices will ultimately change behaviour patterns of consumers – and in time, this will eventually drive the oil price down,” he concludes.

Ends

Sanlam Private Investments
Alwyn van der Merwe
Sanlam Private Investments
Tel: 021 9502273
Cell: 0824595791
Email: alwynvdm@spi.sanlam.com
Nuraan Adams
Atmosphere Communications
Tel: 021 469 1566
Cell: 082 3041022
Email: Nuraan@atmosphere.co.za


About Sanlam Private Investments (SPI)
Part of the Sanlam Investment Group, SPI is a private client portfolio management and stockbroking business, serving high net worth individuals, charitable trusts and smaller institutions. With some R50 billion of assets under management, it is the second largest South African private investment manager, with branches in Cape Town, Durban, George, Knysna, Johannesburg, Sandton and Pretoria. For more information, visit www.sanlamprivateinvestments.co.za.

Unit for sale - R 678 000 neg - Brackenfell, Cape Town

Summerville, Brackenfell

Tenant pays R 4500 pm

Erf size 322m2

House size 68m2

3 bedrooms, 2 bathrooms, 1 garage, enclosed garden

Secure complex

Tuscan style

Levies +- R 140 per month

Contact vania@bondapply.com for more info

Property still in demand

Posted to the web on: 09 June 2008 Business Day
Property still in demand

BIDDING was brisk at the well-attended Alliance Group multiproperty auction on Wednesday where sales of half of the 24 properties on offer were confirmed on the floor. “It was a great turnout and shows that the property people aren’t panicking about what they see as a price adjustment,” Norman Raad of the Alliance Group said afterwards.

“The prices we achieved were very good seeing the market has come off its peak. Last year we saw a 10% yield; this year we have a 12,5% yield. Also, those dealers sitting on cash are looking for investment prospects.”

A brand new triple-A grade office block in Longmeadow Business Park fetched R26m, the highest price at the auction.

The building, at 86 Angus Drive, Longmeadow East, has a gross lettable area of 6940m² in what auctioneer Rael Levitt describes as the prime industrial node in the country.

The building has been recently completed and was sold with vacant occupation.

Following closely, were three office blocks in Mellis Park, Rivonia. The buildings stand on what was once a leafy estate with a caravan park belonging to the Mellis family, and was opposite Liliesleaf Farm which featured prominently in the Rivonia Trial of the 1960s.

The auction got off to a good start with the sale of a retail centre with blue chip tenants in Nelspruit. It has a gross lettable area of 2072m² and a gross income of R1,32m a year. The knockdown price was R7,5m.

A retail and office block in Vanderbijlpark sold for R3m. It has a gross lettable area of 1669m² and a gross income of R1,17m a year. Two adjoining blocks of flats housing 18 flats on Bedford Ave, Benoni, fetched R3,6m, and a block of 13 flats in Florida was knocked down for R3,1m.

An industrial warehouse in Steeldale sold for R10m. The building, with a gross lettable area of 4807m² and a gross income of R54706 a year, was sold with four industrial cranes.

Two hotels came under the hammer: a boutique hotel and health spa in Hyde Park with a gross lettable area of 1350m² fetched R7,5m and R15m was paid for the Sandton Park Hotel in Bramley Park. The latter has 62 suites and a 70% occupancy rate and offers an income of R5,17m a year.

A grade-A office block in Braamfontein attracted interest. The building sold for R9,2m.

Property price drop may not be as big as feared

http://www.persfin.co.za/index.php?fSectionId=709&fArticleId=4443202

Residential property prices could continue to fall for two years. We report on how much pain property owners, sellers and buyers can expect to take, as well as how to make the best of the downturn.
June 7, 2008

By Neesa Moodley-isaacs

Property economists have painted a rather gloomy picture of the prospects for the residential property market in the years ahead, although the situation is not as dire as predicted by one major estate agency earlier this week.

John Loos, First National Bank's property strategist, says the list of negative influences on the residential property market is long, and includes rising interest rates, increasing inflation, a slowing economy, the impact of the National Credit Act, the electricity crisis, low income yields and the recent xenophobic violence.

Loos has projected a 21-percent decline in the value of new mortgage loans and re-advances granted for this year and says we are entering a period of house price deflation.

"South Africa's new mortgage market grew in value by almost 900 percent from 1999 to 2007 and house price inflation over the past decade was a few hundred percent," Loos says.

He says this means the current downturn in the property market is not the end of the world. However, because the list of negative factors affecting the market is longer than he had previously anticipated, Loos says the magnitude of the downturn would be more extreme than previously forecast.

Lew Geffen, the chairman of Lew Geffen Sotheby's International Realty, was quoted earlier this week as saying that property prices could fall by up to 40 percent from last year's highs.

However, property economist Erwin Rode, of Rode & Associates, says estate agents tend to equate market activity with changes in house prices. Although the number of house sales could drop by as much as 40 percent in the year ahead, this does not automatically mean that house prices will fall by the same percentage," Rode says.

"I expect that by next year or the year thereafter, residential property prices will have fallen by about 10 percent from current prices," he says. According to Rode, the bleak outlook is not likely to disappear overnight and property prices could hit rock bottom by 2010.

Geffen was quoted in daily newspapers this week as saying that his prediction of a 40-percent drop in house prices is borne out by the fact that banks are only offering mortgages where clients put down a five-percent to 25-percent deposit.

He says Absa, for example, is only providing 100-percent home loans for properties valued up to R800 000. For properties priced from R800 000 to R2.7 million, Absa will provide a 95-percent loan and, if the property is priced between R2.7 million and R4 million, the bank is only providing a 90-percent loan.

No straight line
However, Jacques du Toit, Absa's senior property analyst, shares a similar outlook to Rode's.

"You cannot draw a straight line between the deposit banks are asking mortgage owners to pay and a possible drop in house prices. There is much more to the calculation and it's simply not that straight- forward," he says.

Du Toit says he does not foresee a 40-percent drop in prices across the board in the next year.

"While we do expect the downward trend in house prices to continue, it definitely won't be to the extent stated [by estate agents]," he says. Du Toit says he expects the downward trend to bottom out late in 2009, with a slight sideways movement before the property market recovers very gradually from 2010.

Du Toit says the factors that have to be considered when looking at the property market include inflation and interest rates.

"Inflation is likely to remain quite high for some time and so will interest rates. The housing market is interest rate-sensitive, and people are likely to sell despite the fact that they are going to get lower prices than they would have a year ago. This applies particularly to people who bought property as speculators with the intention of selling later at a high profit," Du Toit says.

Mortgage bond repayments have already increased 32 percent on the back of nine rate increases since June 2006. According to Du Toit, overdue mortgage loans as a percentage of total mortgage loans increased from a low of one percent at the end of 2006 to 1.5 percent at the end of 2007, and probably increased again this year.

However, they are still well below the average of 6.6 percent recorded in 1999 after interest rates went as high as 25.5 percent in 1998.

Sizwe Nxedlana, the property economist at Standard Bank, says inflation is expected to remain above the Reserve Bank's target band of three to six percent for the next three years.

Nxedlana says further interest rate increases will mean that fewer people will pass the affordability test for new mortgage bonds, fewer mortgages will be granted and registered, and growth in house prices will be less likely.

Further stagnation
Rode says there is usually a lag of nine months between a change in interest rates and a change in house prices. "If you take into account that we are expecting two more interest rate hikes and then are looking at an effect on house prices nine months after the last interest rate hike, we are looking at an extended period of stagnation, if not a decline, in prices," he says.

Many sellers are still expecting to obtain unrealistic prices for their homes, based on the high price growth of the past few years. Rode says sellers need to drop their asking prices to more realistic levels.

"When you are making a buy-or- sell decision, you should never consider the historic cost of the house, as this is irrelevant.

"For example, if you bought a house for R2 million six months ago, the price you paid then has nothing to do with the price you will get for the same house if you sell it today. People assume they must get a better price than the price they paid, but that's not how the market works," Rode says.


How you can survive the property blues
High interest rates and high inflation are here to stay for a while. It is unlikely that we will see a drop in either in the near future, property economist Erwin Rode, of Rode & Associates, says.

If you do not urgently need to sell your property, you should sit out the drop in the market over the next two years at least. This means if you have a strong cash flow, are able to meet your mortgage bond repayments and do not need to sell - for example, to avoid repossession - you should not try to sell your property right now.

If you have bought a property for investment purposes, Rode says, you should put it up for sale and get out of the market as soon as possible.

The residential property market is not likely to be a good investment for the next five years, he says.

Many property owners who took on a mortgage bond of 100 percent or more over the past five years are likely to face a negative equity situation in the next 18 months, Rode says.

Negative equity means you owe more money on your mortgage bond than the actual value of your property. If you have bought a property as your primary residence, this does not necessarily present a huge problem, because all you have to do is ride out the next few years and make sure you are able to meet your mortgage bond repayments as they increase in line with interest rates.

However, you would be well advised not to take out any further loans against your property in the near future, because, should you be forced to sell your home in the next two years, it is unlikely you will obtain a selling price that will cover the entire mortgage amount you owe.

Rode says now is a good time to renovate your home, because small builders are being hit hard. "Small builders are under pressure and looking for work. You will probably get better quality work done on your home now, because small builders are more likely to look after their customers in the current environment," he says.

If you are looking to buy a property, Rode says you should not be in a hurry. You should ideally wait a year or two, because you are likely to pick up a better bargain as the property market gets worse for sellers.

Fixing your home loan interest rate may prove the more costly option for you
You may be thinking about fixing the interest rate on your home loan to avoid dealing with further interest rate hikes and the stress of higher mortgage bond repayments.

However, Mokgatla Madisha, a fixed-income analyst at Investec Asset Management (IAM), cautions that this may be a costly decision. "You could end up paying more in interest than if you were to ride out the [interest rate] cycle," he says.

Although he agrees with property economists that inflation is likely to remain above the Reserve Bank's target band of three to six percent "for a while", Madisha does not think South Africa is facing a situation of ever-increasing inflation and interest rates over the next two years. Instead, he says, inflation is likely to be elevated over the medium term.

"A year from now, interest rates could start to fall, but they are not going to fall very fast, neither are they going to fall very far," he says.

Madisha says fixing your interest rate for two years could mean that you are stuck paying off your mortgage bond at 16 percent in 2010 while inflation could have fallen back to six percent and interest rates could be reduced to 12 percent.

Banks generally offer you the opportunity to fix your interest rate at about half to one percentage point above the prime rate - currently 15 percent - for a period of up to two years. A variable interest rate linked to the prime rate is usually anything between one and two percentage points below prime.

The disadvantage of fixing your interest rate now is illustrated by the following examples:

# Homeowner A, who has a mortgage bond of R1 million and who pays an instalment of R11 715 a month at prime minus two percentage points - that is, 13 percent - decides to ride out the interest rate cycle. If it is assumed that interest rates are raised by one percentage point at each meeting of the Reserve Bank's monetary policy committee in June, August and October, and then stay level until May 2009, the prime rate will be 18 percent by October, and Homeowner A will be repaying R13 912 a month on an interest rate of 16 percent.
# Homeowner B, who also has a mortgage bond of R1 million, chooses to fix his home loan at prime plus one percentage point now, which will result in his monthly repayment increasing to R13 912.

This means Homeowner B will immediately have to cough up every month what Homeowner A will start paying only in October. Over a full year, Homeowner B will be paying about R6 000 more.

Madisha says IAM does not foresee a three-percentage-point hike in interest rates during this year.

"We anticipate a further one to 1.5-percentage-point-rate hike until the cycle peaks, which would mean that the homeowner on a fixed rate is even worse off. He could be stuck for another year at the fixed rate, while those on a floating rate, or a rate linked to the prime rate, could start enjoying the respite of lower interest rates."

All about the cheese

"Times are Tight"

For the last few weeks we have been bombarded with bad news about our country. Eskom's incompetence, the “xenophobic” violence, the petrol price, interest rates etc - all bad news, or so the media would have us believe.

On Sunday night I watched Carte Blanche and, along with thousands of viewers, was shocked and horrified at the fact that people are losing their homes and, thanks to the intervention of the National Credit Regulator, have just enough money to buy food! My heart was gripped by fear. My stomach tied into a knot, and I had a sleepless night. But you see, that is what our media intends to happen. Because when you are ruled by fear, your creativity and individuality are paralysed, and you become a victim - then the media has got more bad news to feed on. It’s in the media’s interests to promote bad news, because bad news sells!

However, what the media does not tell you is that more people have become millionaires during hard times than during good times. More people have made fortunes during hard times than during good times. It all depends on your frame of mind. It's natural to feel threatened by the problems that we are facing, but if you succumb to fear, you are going to become a victim of these problems. However, if you acknowledge these problems, realise that they are an inescapable part of life and start living smarter, you will survive and you will prosper.

In the book “Who Moved my Cheese”, the author tells a simple story of a mouse that used to go to the same place every day to get his piece of cheese. One day the cheese was not there. The mouse panicked and was gripped by fear, and as a result went hungry the next day as well, and the next. He just kept on going back to the same place over and over, only to find that there was no more cheese. Then another mouse told him that there was cheese at another place, but he wouldn’t believe it. So he continued to go hungry.

Our cheese in South Africa is busy moving, and if you don’t move with it and look for new cheese, you will go hungry. You need to keep looking for better, smarter and more creative ways to achieve better results. Only those people that do this will prosper during these challenging times. Burying your head in the sand and talking about bad times with friends and colleagues will achieve nothing. Only smart, creative and consistent action will see you through.

When you talk about something and when it occupies your mind, you give it life. So occupy your mind with the excitement of being a different you, and through that, achieving a successful life.

Personal loans

Repayment to income not to exceed 30% of gross income

Self employed clients cannot be assisted – only salaried clients

Clients banking with Capitec Bank cannot be assisted



We need the following:

· Id copy

· 3 months bank statements

· Latest salary slip

· Utility bill

· Completed application form


www.bondapply.com

Not opening your bills anymore?

Creditors chasing you for payment?

Struggling each month to pay your debts?

Financial judgments against you?

Spending more than you earn?

If your debt situation is out of control, a debt consolidation mortgage loan is almost certainly the answer. Most people go through a stage where their monthly expenditure exceeds their earnings, and if this situation carries on for some time then it leads to increasing debts and a need to consolidate those debts. This can often occur through no direct fault of your own. It could be the result of losing your job, divorce, ill health and other genuine reasons. The one thing you must not do is, ignore it.

Seeking professional debt management help or financial advice is often the first step to getting you back on track. The next possible step is consolidating your home loan, credit cards, retail debt, personal loans and any other debts into one new mortgage.

At bondapply.com we fully understand the problems experienced by some people with financial difficulties when it comes to getting a competitive mortgage deal. Our team constantly helps people with unsecured loans and credit card debts to consolidate their position with a mortgage, reducing their monthly outgoings and getting them back on solid credit foundation again. We do this by utilizing an equity release mortgage and debt consolidation approach.

While we endeavour to assist most applicants, we do however take into account your adverse credit history. We are aware that information listed on the respective credit bureaus may not be full up to date so we will do further investigation to ascertain whether the information reflected is correct.

In the following cases we CAN assist clients:

1 Clients who have settled their debts and need their credit bureau profile improved.
2 Clients, who have NOT yet settled their debts, but have the funds to settle their debts themselves and need their credit bureau profile improved.
3 Clients who have a poor credit profile and do not have the funds to settle their debts themselves but own a property (with sufficient equity).

Please fax the following docs to Vania at 0866 270 135 and we can get your application going. www.bondapply.com

All applicable ID documents.
Marriage certificate (if applicable).
ANC contract (if applicable).
Latest 3 months bank statements or 6 months if self-employed.
Latest 3 months payslips or letter from auditor if self-employed.
Latest 6 months bond statements or 12 months if self-employed.
Latest rates account.
Latest water and electricity account.
Latest Levy account (if applicable).
Statements from companies that client is indebted to or in arrears with, or a list of the accounts with approximate outstanding amounts and account numbers, if possible.
If self employed, 6 months company bank statements and company registration documents