Today's Sunday Crimes has article on property sellers taking stress - gives some sensational examples of price drops, talks of sellers being unrealistic and pretty negative article overall.
Maybe the bursting of the property bubble is gaining wider acceptance?
Prices are falling. I bought 2 properties at a great reduced price as i know my savings in the bank were not safe. With the economic situation and riots in North Africa and Middle East, shares might fall drastically. There are only 2 places safe to invest:gold or property. My 2 properties are already let and as i paid cash for them (from my savings) I get a good return every month.
Yes - until the government "punishes"secondary and tertiary property ownership by escalating the rates on those secondary and tertiary properties to such a point that it becomes barely profitable to own anything besides your primary residence.
A truly Macchiavellian move would be redrafting the property tenure law thereby changing all title deeds to 99 years leaseholds.
Far fetched ? I don't know actually. Africa never ceases to amaze and/or disappoint.
This is very interesting, 99 years leasholds. What I would like to have solved and whats really annoying me are many of the really rich people who buy properties all over the place and do not use them!!! I am living in a small gated community and roughly 70% of all the houses here are used less than 3 weeks a year. Another example is constantia, drive around upper constantia it is deserted ... I do not know how this could be solved by I think it should be.
There is nothing to "solve" about vacant property. It's called free market where people are free to spend and invest their money where they choose. Anything less is a path to communism.
Parasites like BTL investors make communism seem mighty attractive. The little white maggots vying to monopolise an essential resource need protection from themselves or there will be an uprising in this country. They should stop being a net loss to human race and get a real jobs instead of living off the sweat of decent working people.
I wouldn't need rental property if BTL filth didn't buy up everything and then rent it back to me This market needs deflating. If 99 year leases will do that I am 100% pro.
Why don't you and the other BTL trash go on strike? "Go Galt" as the Ayn Rand freaks say and deprive society of your gifts. You won't ever do that because unlike garbage men, doctors, plumbers, prostitutes and crack dealers (ie: people who make their living trading products and services of value) you won't be missed.
The basic BTL plan is: 1) make loan from bank and use that free money buy property 2)Rope in some sad sack that pays off your loan for you 3)sit on your ass and wait until you become a property owner.
Where in this plan is the BTL landlord adding anything of value to society? You can't see it because there isn't any added value. The BTL market is a racket - pretty much the classic definition of racket.
From wikipedia: "Traditionally, the word racket is used to describe a business (or syndicate) that is based on the example of the protection racket and indicates a belief that it is engaged in the sale of a solution to a problem that the institution itself creates or perpetuate"
Sorry if my mind isn't broad enough to spot the marvelous benefits your occupation bestows on me. I guess us slum dwellers don't know how good we got it.
Been a lurker here for a long time. I'm a property owner BTW.
Benny, you seriously need to think a bit more broadly and deeply before you start talking, man.
To paint BTL as cretins just confirms to everyone that you are a moron. Very few things in life can be explained by one-liners. There is always more complexity in any situation, should you be willing to dig deeper.
Some BTL's might have decided to use it as an investment vehicle instead of investing in shares. Does that make them any less worthwhile that someone investing in the stockmarket?? I made most of my money on the market boom from 2000 to 2008 - does this mean I'm a cretin too?
It's a free market society (kinda)- if you want socialism, vote it in or move.
So I’m a moron… because you made money on the BTL market… by buying two properties… and selling them a while later… and anything else is socialism?
Investing in shares isn't always productive but at least the idea that it lets companies invest in new ventures and expand, create jobs, new products etc. is sound. BTL investors create nothing and add nothing except more air for in bubble. The term “rent seeker” is a derogatory one for a reason. Just because BTL investment is widely accepted in white maggot society doesn’t mean it’s productive, innovative or useful. Nothing you wrote would make anyone believe anything to the contrary.
I agree with Benny. Even making gains from a rise in share prices based on 'perception' and which doesn't equate to an increase in productivity (dividends) or additional 'utility' added to the economy is not 'earned', and doesn't count as 'work'. I have more respect for construction workers than stock market moguls...
"I made most of my money on the market boom from 2000 to 2008"
I guess I misunderstood the above words to mean that you made money on the PROPERTY market by buying property in 2000 and selling it in 2008. But you meant the STOCK market. Ok fine.
I am still of the opinion that BTL investors are lazy parasites that should find a way to trade something of actual value to make a living. I'll never respect them and will support any law, political party or movement that makes their lives harder and their racket less profitable.
Here's the funny thing about life - things that don't pass the ethics test are weeded out over time and dealt with.
If the BTL maggots are of as little value to society as you claim, they will get sorted out - the property market will find some way of ripping their faces off.
In the meantime, direct your energy towards something more useful than blind hate.
Sounds to me like you have got a TURK for a landlord?
interesting debate. I have never seen it from Benny's view point before and he does give a compelling argument.
I am a renter but am at the tipping point of buying my first property as a BTL (and continue renting myslef), as appose to leaving it in investment.
If I go the BTL route my small savings would probably mean that I can buy a property and get a balanced cashflow (ie rent = monthly payment + levies). So the only benifit of going BLT would be Capital gain.
Capital gain prediction on property isnt looking too good at the moment, so at the end of the day, I'd probably be getting the same gain (or less) then if i was to leave it in investment.
I have about R250k in savings. Which over a year get me about R26k ROI.
If I become a BTL, I would be buying around R850k to get a balanced cash flow. If the property grows at anything less than 3% y/y I lose. If the prime rates go up, I also lose. Both are very likely
Guess I was lucky. Left my cushy job in 2000, cashed in my pension (couple of millions) and started to buy flats, geared them to the max. and sold all of them by 2007, made 15 mill profit. Now in RSA Bonds and Stock market worth 23 mill and that after the fin crisis. Long live capatlism.
Young, working class, first time buyers, can't buy a primary residence because the Buy To Let landlord crowd is monopolising an essential resource i.e housing.
If secondary and tertiary properties were to become unattractive to purchase, then first time buyers would have more stock to choose from.
And we all know that if a higher proportion of the population owned a their own primary residence, then that would create social stability and a more settled, less nomadic populace.
I'm all for the stability that comes from pride in owning your very own primary residence.
Yes Jules - the market is "free". Free to those that have hordes of cash capital to buy up multiple properties and then force the rest of the wage slaves to rent from them, for life. That's called serfdom.
Same as Bidvest buying up a whole lot of service,manufacturing and distribution companies, and then setting the price for said companies' products.
Same as Oppenheimer/De Beers buying up most of the diamonds, and then setting the selling price at will. That's called a legal monopoly.
The difference being that housing is a more essential commodity to more people than industrial diamonds.
I see some misdirected anger here. Cement cost R12 a bag in 1994 now about R70. Prime land cost R75K with a sea-view now about R1m or more. Large areas like Summer Greens were provided with infrastructure in the 90’s, an entry plot cost you nothing. Today I don't see any areas provided with infrastructure where a young person can get a foothold (not in CT anyway). Before a bank will provide a loan your engineer and architect has to be registered with all kinds of bodies that drives cost. As a rule of thumb you need to spend over R100K before sticking a spade in the soil, for all the compliance, plans approval, rented toilet, inspections, security, property surveyor, engineer etc. Labour for building escalated massively. You need about R200 per day for a basic labourer and a bricky or plasterer is going to cost at least R400 per day, labour makes up the biggest component of the project. To make matters worse skilled artisans are unavailable. What I'm trying to say is that a R1m house is relatively inexpensive compared to building that house now, I am talking about one of those older Bellville or Parow houses in the older suburbs. That said the massive escalation where houses cost R60K 15 years to R1m for a basic place now has nothing to do with speculators, it has to do with inflation. So if Benny and friends discard the noise and think clearly about this it will become obvious who the culprits are, and it's not BTL or any other property investor, neither is it the estate agents. Although I hate them with a passion, they are nearly as bad as politicians. Oops, did I give it away?
You have it all in RSA bonds and stocks...not wise at all. Esp considering, if your story is legit, that you got into the inflated/ speculated markets in 2007/2008.
And for the record, in response to your apparent gloating,...I "retired" from my Wall St position at 28. With my 5 yrs accumulated bonuses an sold Manhattan and London apartments I am close to your 23 mill figure...except it has a £ sign and not a R in front. And its all in CASH..in these times CASH is king...disagree with the #2 Anon "There are only 2 places safe to invest:gold or property"
Gold yes but getting in at these levels is very risky. Property..do me a favour !!!
Remember Mr.Wall St. that cash is not money. It is paper currency, backed by nothing but legal tender laws.....Thanks to the Federal Reserve going off the gold standard in 1971.
Pray that we never have Weimar Republic Hyperinflation. Or at least pray that you see it coming in time to buy bullion- silver or gold.
Wall st. and Anon Cushy job might have excellent property shuffling skills and 23 million pieces of paper sticking to a hot bubble, but there are individuals out there who have other skills: like shoving screwdrivers through skulls and dripping molten plastic on big swinging dicks until they tell you where the safe is. The aptitudes these kind of talents spring from are part of our human heritage and ensured the survival of our species in ages past - and the survival of some even today.
The challenge is helping the skull shovers develop other talents so that they can share in the bounty of free market capitalism. But we're failing. Remember kids: Capitalism isn't the last word in "hard reality" as some like to call it. Capitalism (of all kinds) is a human construct based on rules - a system like any other that can be ignored at will. Beneath that is tooth and claw and most property flippers are woefully underequipped to compete in such a reality. Life really isn't fair.
Sorry to put it this way fellas but you aren't safe until everyone thinks they have a fair shot and fewer and fewer people are thinking that.
To have too much cash is not wise, better to invest it in property (that you can let out and brings you a monthly income) or gold. We are entering a very difficult economic period. Your cash might be worth nothing tomorrow. At least if you have something solid like a property or gold you cannot go wrong. I bought 2 flats for cash in London that bring me back net R25000. And i keep buying gold coins with half of that money.
The way I see it, the accumulation of wealth for one person has to be at the detriment of another. If someone is earning money without doing any actual physical work, that money has to come from somewhere. That somewhere is off the sweat and blood of someone else. Take Robert Kyosaki’s Rich Dad Poor Dad. If everyone on Earth had enough wealth to be able to retire and not work, where would the money come from? Who would be the plumber, garbage man, electrician, employee? Those that strive for wealth are actually striving to accumulate money for nothing, and have to ask themselves how ethical that really is. Let’s take the Stock Market as another example. People buy shares, in the hope that the shares will over time increase in value, and perhaps pay dividends. Companies use this money to improve the business and make more money, ultimately making their shares more appealing, rising their value. Who wins and who loses? Shareholders win, and a small few in the company on the top of the pyramid win. Everyone else loses. That employee that just doesn’t make enough to buy a house, or the employee that cannot feed his family. They lose. The business doesn’t exactly share it’s pot evenly. I agree 100% with Benny, BTL investors (and in my opinion every other investor) is creating an uneven balance, which is very dangerous. Just look at South Africa and it’s economic balance, what world would we live in if 10 people owned everything and 6 billion owned nothing?
Thanks for the support, but I have no beef with investment. "Investors" take genuine risks for genuine rewards. New and useful goods and services are one kind of desirable result. A BTL investor just uses his access to cheaper credit to insert himself between you and what was already available and what you were forced to buy anyway. The maggot metaphor was ill chosen. Maggots provide essential services like composting and biological cleanup. BTL modus operandi is closer to this little critter: http://en.wikipedia.org/wiki/Cymothoa_exigua Better pictures here: http://www.halo3forum.com/complete-off-topic/265628-tongue-eating-isopod.html
33 comments:
Today's Sunday Crimes has article on property sellers taking stress - gives some sensational examples of price drops, talks of sellers being unrealistic and pretty negative article overall.
Maybe the bursting of the property bubble is gaining wider acceptance?
Dunno, just saying ...
Prices are falling. I bought 2 properties at a great reduced price as i know my savings in the bank were not safe. With the economic situation and riots in North Africa and Middle East, shares might fall drastically. There are only 2 places safe to invest:gold or property.
My 2 properties are already let and as i paid cash for them (from my savings) I get a good return every month.
Yes - until the government "punishes"secondary and tertiary property ownership by escalating the rates on those secondary and tertiary properties to such a point that it becomes barely profitable to own anything besides your primary residence.
A truly Macchiavellian move would be redrafting the property tenure law thereby changing all title deeds to 99 years leaseholds.
Far fetched ?
I don't know actually.
Africa never ceases to amaze and/or disappoint.
This is very interesting, 99 years leasholds.
What I would like to have solved and whats really annoying me are many of the really rich people who buy properties all over the place and do not use them!!! I am living in a small gated community and roughly 70% of all the houses here are used less than 3 weeks a year.
Another example is constantia, drive around upper constantia it is deserted ... I do not know how this could be solved by I think it should be.
W
There is nothing to "solve" about vacant property. It's called free market where people are free to spend and invest their money where they choose. Anything less is a path to communism.
Hey Jules
Parasites like BTL investors make communism seem mighty attractive. The little white maggots vying to monopolise an essential resource need protection from themselves or there will be an uprising in this country. They should stop being a net loss to human race and get a real jobs instead of living off the sweat of decent working people.
right so Benny who is going to supply rental property then? your small minded racist attitude needs to expand a little beyond your own miserable life.
@ BBflames
I wouldn't need rental property if BTL filth didn't buy up everything and then rent it back to me This market needs deflating. If 99 year leases will do that I am 100% pro.
Why don't you and the other BTL trash go on strike? "Go Galt" as the Ayn Rand freaks say and deprive society of your gifts. You won't ever do that because unlike garbage men, doctors, plumbers, prostitutes and crack dealers (ie: people who make their living trading products and services of value) you won't be missed.
The basic BTL plan is:
1) make loan from bank and use that free money buy property
2)Rope in some sad sack that pays off your loan for you
3)sit on your ass and wait until you become a property owner.
Where in this plan is the BTL landlord adding anything of value to society? You can't see it because there isn't any added value. The BTL market is a racket - pretty much the classic definition of racket.
From wikipedia: "Traditionally, the word racket is used to describe a business (or syndicate) that is based on the example of the protection racket and indicates a belief that it is engaged in the sale of a solution to a problem that the institution itself creates or perpetuate"
Sorry if my mind isn't broad enough to spot the marvelous benefits your occupation bestows on me. I guess us slum dwellers don't know how good we got it.
BTL parasites should get real jobs.
@ Benny
Been a lurker here for a long time. I'm a property owner BTW.
Benny, you seriously need to think a bit more broadly and deeply before you start talking, man.
To paint BTL as cretins just confirms to everyone that you are a moron. Very few things in life can be explained by one-liners. There is always more complexity in any situation, should you be willing to dig deeper.
Some BTL's might have decided to use it as an investment vehicle instead of investing in shares. Does that make them any less worthwhile that someone investing in the stockmarket?? I made most of my money on the market boom from 2000 to 2008 - does this mean I'm a cretin too?
It's a free market society (kinda)- if you want socialism, vote it in or move.
So I’m a moron… because you made money on the BTL market… by buying two properties… and selling them a while later… and anything else is socialism?
Investing in shares isn't always productive but at least the idea that it lets companies invest in new ventures and expand, create jobs, new products etc. is sound.
BTL investors create nothing and add nothing except more air for in bubble. The term “rent seeker” is a derogatory one for a reason. Just because BTL investment is widely accepted in white maggot society doesn’t mean it’s productive, innovative or useful. Nothing you wrote would make anyone believe anything to the contrary.
I agree with Benny. Even making gains from a rise in share prices based on 'perception' and which doesn't equate to an increase in productivity (dividends) or additional 'utility' added to the economy is not 'earned', and doesn't count as 'work'. I have more respect for construction workers than stock market moguls...
Benny, Benny, Benny...
"So I’m a moron… because you made money on the BTL market… by buying two properties… and selling them a while later"
Where did I say I made money buying properties? I said I'm a property owner, and by that I mean "I" own it, not the bank...
My last post on the issue, as I don't enjoy arguing with someone who only listens to his own voice...
You have a career in politics waiting for you, I think!
Cheers.
No, don't go Ian!
"I made most of my money on the market boom from 2000 to 2008"
I guess I misunderstood the above words to mean that you made money on the PROPERTY market by buying property in 2000 and selling it in 2008. But you meant the STOCK market. Ok fine.
I am still of the opinion that BTL investors are lazy parasites that should find a way to trade something of actual value to make a living. I'll never respect them and will support any law, political party or movement that makes their lives harder and their racket less profitable.
There is a difference between BTL investors who buy with cash and those who take on debt for others to pay off....
Yo Benny?
Here's the funny thing about life - things that don't pass the ethics test are weeded out over time and dealt with.
If the BTL maggots are of as little value to society as you claim, they will get sorted out - the property market will find some way of ripping their faces off.
In the meantime, direct your energy towards something more useful than blind hate.
Sounds to me like you have got a TURK for a landlord?
interesting debate. I have never seen it from Benny's view point before and he does give a compelling argument.
I am a renter but am at the tipping point of buying my first property as a BTL (and continue renting myslef), as appose to leaving it in investment.
If I go the BTL route my small savings would probably mean that I can buy a property and get a balanced cashflow (ie rent = monthly payment + levies). So the only benifit of going BLT would be Capital gain.
Capital gain prediction on property isnt looking too good at the moment, so at the end of the day, I'd probably be getting the same gain (or less) then if i was to leave it in investment.
What should I be doing?
a basic example of my situation
I have about R250k in savings. Which over a year get me about R26k ROI.
If I become a BTL, I would be buying around R850k to get a balanced cash flow. If the property grows at anything less than 3% y/y I lose. If the prime rates go up, I also lose. Both are very likely
Guess I was lucky. Left my cushy job in 2000, cashed in my pension (couple of millions) and started to buy flats, geared them to the max. and sold all of them by 2007, made 15 mill profit. Now in RSA Bonds and Stock market worth 23 mill and that after the fin crisis. Long live capatlism.
@ last anonymous: just for interest sake, what sector was your "cushy" job in?
I agree with Benny totally.
Young, working class, first time buyers, can't buy a primary residence because the Buy To Let landlord crowd is monopolising an essential resource i.e housing.
If secondary and tertiary properties were to become unattractive to purchase, then first time buyers would have more stock to choose from.
And we all know that if a higher proportion of the population owned a their own primary residence, then that would create social stability and a more settled, less nomadic populace.
I'm all for the stability that comes from pride in owning your very own primary residence.
Yes Jules - the market is "free".
Free to those that have hordes of cash capital to buy up multiple properties and then force the rest of the wage slaves to rent from them, for life.
That's called serfdom.
Same as Bidvest buying up a whole lot of service,manufacturing and distribution companies, and then setting the price for said companies' products.
Same as Oppenheimer/De Beers buying up most of the diamonds, and then setting the selling price at will.
That's called a legal monopoly.
The difference being that housing is a more essential commodity to more people than industrial diamonds.
I see some misdirected anger here. Cement cost R12 a bag in 1994 now about R70. Prime land cost R75K with a sea-view now about R1m or more. Large areas like Summer Greens were provided with infrastructure in the 90’s, an entry plot cost you nothing. Today I don't see any areas provided with infrastructure where a young person can get a foothold (not in CT anyway). Before a bank will provide a loan your engineer and architect has to be registered with all kinds of bodies that drives cost. As a rule of thumb you need to spend over R100K before sticking a spade in the soil, for all the compliance, plans approval, rented toilet, inspections, security, property surveyor, engineer etc. Labour for building escalated massively. You need about R200 per day for a basic labourer and a bricky or plasterer is going to cost at least R400 per day, labour makes up the biggest component of the project. To make matters worse skilled artisans are unavailable. What I'm trying to say is that a R1m house is relatively inexpensive compared to building that house now, I am talking about one of those older Bellville or Parow houses in the older suburbs. That said the massive escalation where houses cost R60K 15 years to R1m for a basic place now has nothing to do with speculators, it has to do with inflation. So if Benny and friends discard the noise and think clearly about this it will become obvious who the culprits are, and it's not BTL or any other property investor, neither is it the estate agents. Although I hate them with a passion, they are nearly as bad as politicians. Oops, did I give it away?
@ Anon with cushy job.
You have it all in RSA bonds and stocks...not wise at all. Esp considering, if your story is legit, that you got into the inflated/ speculated markets in 2007/2008.
And for the record, in response to your apparent gloating,...I "retired" from my Wall St position at 28. With my 5 yrs accumulated bonuses an sold Manhattan and London apartments I am close to your 23 mill figure...except it has a £ sign and not a R in front.
And its all in CASH..in these times CASH is king...disagree with the #2 Anon "There are only 2 places safe to invest:gold or property"
Gold yes but getting in at these levels is very risky. Property..do me a favour !!!
CASH IS KING !!!!
Is this a pissing contest, or a property site? Make up your minds please!
Remember Mr.Wall St. that cash is not money.
It is paper currency, backed by nothing but legal tender laws.....Thanks to the Federal Reserve going off the gold standard in 1971.
Pray that we never have Weimar Republic Hyperinflation.
Or at least pray that you see it coming in time to buy bullion- silver or gold.
Eish. I'm a beggar in comparison to Mr Wall street and co.
If I had £23mill or even R23mill. I would be out living the life, rather than comparing penis sizes.
That said, I'm glad there are rich people providing input.
I wish people wouldn't get so uppity here.
Glad to hear some of you have 23 million clams. Good for you.
I would like to read about the Cape Town Property Bubble please.
Wall st. and Anon Cushy job might have excellent property shuffling skills and 23 million pieces of paper sticking to a hot bubble, but there are individuals out there who have other skills: like shoving screwdrivers through skulls and dripping molten plastic on big swinging dicks until they tell you where the safe is. The aptitudes these kind of talents spring from are part of our human heritage and ensured the survival of our species in ages past - and the survival of some even today.
The challenge is helping the skull shovers develop other talents so that they can share in the bounty of free market capitalism. But we're failing. Remember kids: Capitalism isn't the last word in "hard reality" as some like to call it. Capitalism (of all kinds) is a human construct based on rules - a system like any other that can be ignored at will. Beneath that is tooth and claw and most property flippers are woefully underequipped to compete in such a reality. Life really isn't fair.
Sorry to put it this way fellas but you aren't safe until everyone thinks they have a fair shot and fewer and fewer people are thinking that.
Property prices are going down!!!
http://www.iol.co.za/business/business-news/house-price-growth-slows-1.1034140
"Loos said they expected a house price decline of around one percent for the year. "
Isn't the Prophet of FNB Park committing heresy according to his own laws?
To have too much cash is not wise, better to invest it in property (that you can let out and brings you a monthly income) or gold. We are entering a very difficult economic period. Your cash might be worth nothing tomorrow. At least if you have something solid like a property or gold you cannot go wrong. I bought 2 flats for cash in London that bring me back net R25000. And i keep buying gold coins with half of that money.
The way I see it, the accumulation of wealth for one person has to be at the detriment of another. If someone is earning money without doing any actual physical work, that money has to come from somewhere. That somewhere is off the sweat and blood of someone else. Take Robert Kyosaki’s Rich Dad Poor Dad. If everyone on Earth had enough wealth to be able to retire and not work, where would the money come from? Who would be the plumber, garbage man, electrician, employee? Those that strive for wealth are actually striving to accumulate money for nothing, and have to ask themselves how ethical that really is. Let’s take the Stock Market as another example. People buy shares, in the hope that the shares will over time increase in value, and perhaps pay dividends. Companies use this money to improve the business and make more money, ultimately making their shares more appealing, rising their value. Who wins and who loses? Shareholders win, and a small few in the company on the top of the pyramid win. Everyone else loses. That employee that just doesn’t make enough to buy a house, or the employee that cannot feed his family. They lose. The business doesn’t exactly share it’s pot evenly. I agree 100% with Benny, BTL investors (and in my opinion every other investor) is creating an uneven balance, which is very dangerous. Just look at South Africa and it’s economic balance, what world would we live in if 10 people owned everything and 6 billion owned nothing?
@ last anon
Thanks for the support, but I have no beef with investment. "Investors" take genuine risks for genuine rewards. New and useful goods and services are one kind of desirable result. A BTL investor just uses his access to cheaper credit to insert himself between you and what was already available and what you were forced to buy anyway.
The maggot metaphor was ill chosen. Maggots provide essential services like composting and biological cleanup. BTL modus operandi is closer to this little critter:
http://en.wikipedia.org/wiki/Cymothoa_exigua
Better pictures here:
http://www.halo3forum.com/complete-off-topic/265628-tongue-eating-isopod.html
Post a Comment