Palm Springs is a newish development that was unfortunately built in Brooklyn. There are 354 units and of those 146 belong to a Trust, CC or (Pty) Ltd. Can you say 'specuvestor heaven'?Reader JT writes:
Bought a unit here in 2008 to let it sleep for a few years for about R 450 000
Initial levy payable to Permanent Trust has now been increased by 50% from R 300 to R 502.
Reason for this is that they never accounted for the behaviour of the low budget/illegal immigrant/5 people in a single room scenario – not to mention the gym equipment being vandalised and communal areas falling apart.
I currently let my unit out for R 3200 a month
It was a bad choice as an investment – time will tell if it works out
So bought for R450 00 and currently reanting for R3 200 gross, with levies includes it's R2 700/month net.
If you bought it for cash you're earning 7% return. If you didn't put at least R150 000 down (that's a 33% deposit) you're losing money and judging by the way the levies are going up, will continue to lose money for a while.
However there seems to be a slight problem with the rates accounts. JT continues:
Turns out the developer never properly registered the units in individuals names – so the R 4000 in rates that I paid up to Feb last year to what I was told was my account is now frozen and I have to prove that I paid it.
I apparently have a new account that is in debt to the tune of R 4500 – but I have still to receive a rates statement.
Just a little legal note, if rates are not up to date the council will not issue a rates clearance certificate and no sale can proceed. If you need to sell you're going to have to get the bottom of that rates story.
8 comments:
Not exactly on topic but after having read this post on maturity transformation I thought that some who like a macro view might appreciate it.
Our financial system is not a new operating system. It is a very old operating system. Worse, there is only one of them: the whole world runs the Anglo-American banking system, more or less as described by Walter Bagehot in Lombard Street (1873). Lombard Street is our Windows. There is no Mac. There is no Linux. Our experts in finance are not experts in finance. They are experts in Lombard Street finance. Asking them to imagine an alternative is like asking a Windows programmer to imagine OS X - except that Windows isn't 314 years old.
Thanks for the link. It was an interesting read. I'm not sure I agree with all of the points made.
Especially the part about $1 under your mattress being worth more than $1 in the bank. Definitely not in SA!! lol The probability of our dinosaur banks defaulting is much smaller than the probability of money being stolen from under my mattress.
Perhaps the Fed & co should come to good old SA and see how our banking system manages to outride global economic turmoil. i.e. They are mega profitable through exhorbitant bank charges & collusion and they don't seem to have learnt about the "sexy" financial instruments that cause all the trouble.
@anon
Our banks? They are not as healthy as you think.
In terms of risk you might be right! Wonder whats safer in SA, a visit to an ATM or a mattress? Haha.
In terms of value however one must understand that the virtual/physical plane of money is backed by the physical plane. The dollar has its value because it is "backed" by the oil and trade flows through the dollar. (homework: what reserves does the Federal Reserve hold?)
Why are people so status proud of a "gold" or "platinum" credit card, yet the actual metals they see as riskier than paper? It is because archetypes of value never change but your financial advice has.
To get back to the topic - Brooklyn is a DIVE! The only people who want to live in Brooklyn are the "visitors" in the numerous crack dens littered throughout that drug infested neighbourhood.
@ Goldilocks.
So true re the gold and platinum credit cards. What a con. Even had a Nedbank employee admit that they were just another way of fleecing the customer with higher fees that far out way any tangible benefits. But hey wern't you also excited when you were admitted to the Gold Card carrying club. lol.
JT seems very calm about the whole situation...i would be having sleepless nights..sounds like a real balls-up at The Palms!!!
Extract from article: The SARB has clearly shifted its stance from very dovish in November to neutral in January and the market has moved from expecting no hikes in 2011 to almost fully discounting 100bp in hikes by year-end.
http://www.moneyweb.co.za/mw/view/mw/en/page292681?oid=529153&sn=2009 Detail
Get hold of an original Rates Clearance Certificate and then print your own.
Let the City fight it out with the Deeds office after your sale has been finalised and your cash is in the bank.
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