Rental income and income tax – how does it work?

By Veruska De Vita

The ability to earn a passive income through property is a wonderful opportunity that can add significantly to your monthly monetary needs. A rental property that is well-positioned, in demand and well maintained is an excellent asset and a sound investment. But in terms of rental income and income tax, how exactly does it work?

Craig Hutchison, CEO of Engel & Völkers Southern Africa explains that if you rent out a property and receive a rental income, it will be subject to tax.

“Rent received from the letting of residential accommodation such as a holiday home, cottage on your property, sub-renting part of your house or a townhouse will all be subject to being taxed. The rental income is added to any other taxable income you receive, such as a monthly salary,” explains Hutchison.

 Can the taxable income be reduced?

Yes, the taxable income accrued from renting out a property can be reduced as expenses are always incurred.

Expenses that may be deducted from rental income include:

  • Bond interest
  • Rates and taxes
  • Property levies
  • Estate agency fees
  • Homeowners insurance (excludes household contents insurance)
  • Garden services
  • Repairs
  • Security

Which expenses are not allowed?

It must be noted that only expenses related to the rental of the property may be deducted. Capital and private expenses won’t be considered as a deduction by SARS.

“While maintenance and repairs expenses can be passed, improvement costs are a capital expense and will be included in the base cost of the property. When the property is sold, the improvement costs will be an expense that will effectively reduce the capital gain, thus reducing the capital gains tax payable to SARS,” explains Hutchison.

If expenses exceed rental income

There are times when, for one reason or another, the expenses accrued from leasing a property exceed the income. The loss should then be off-set against other income received by you the owner. When leasing out a property it is always best to consult with an accountant or tax specialist to fully understand what is deductible, how much tax will essentially be paid over the annual lease period and the like. This will provide a realistic view of your nett income.

“Income tax aside, the leasing of a residential property if managed effectively, is a viable and financially sound way of adding to your monthly income stream. At the same time, you are the owner of an asset that will appreciate in value over time and will pay dividends as the years go by,” concludes Hutchison.

Designer Halston’s iconic Manhattan townhouse sold

Former property of Gunter Sachs – The unique design is the work of acclaimed architect Paul Rudolph.

Engel & Völkers, New York has successfully brokered the former residence of the US designer Roy Halston in Manhattan for 18 million US dollars (approx. 15.9 million euros).

The townhouse is located on the Upper East Side and was designed in 1966 by the world-famous architect Paul Rudolph. The prominent American fashion designer Halston purchased the property in 1974 and turned it into a venue for legendary parties attended by New York’s high society.

Stars from the worlds of film, art and music were frequent guests, including Andy Warhol and Liza Minnelli. The Halston House, as it is known, was acquired by the German photographer and art collector Gunter Sachs in 1990. He filled it with portraits of its famous visitors, including a Warhol painting of Brigitte Bardot, his third wife.

Living inside a work of art

The Halston House is one of the very few New York homes to be designed by the renowned architect Paul Rudolph. The façade is made from steel and glass, a strong contrast to its neighbouring brownstone mansions. The design reflects Rudolph’s modernist approach, strongly influenced by the Bauhaus movement. Inside, Rudolph’s skillful use of natural light is evident. The interior space totals some 700 square meters, with three living rooms, four bedrooms, four full and one half bathroom, plus two kitchens.

The sunken living room with its triple-height ceiling, a wall of windows and a fireplace forms the centerpiece of the house. From here a floating staircase leads up to the upper floors, where a 148-square-metre outdoor terrace awaits. “Due to its glamorous past and cult status, this house cannot fail to make an impression. With its unique architectural design and luxurious finishes it is a work of art in itself while at the same time offering a realm of exclusivity,” said Stuart Siegel, Managing Director Engel & Völkers.

Community Living – Keeping property values high

By Veruska De Vita

Living in gated communities and estates has become a growing trend in South Africa. This type of lifestyle offers security, hassle-free living and the type of community where everyone knows their neighbour by name. Many estates also provide the opportunity for residents to enjoy communal amenities such as a club house, swimming pool, tennis courts, gym and children’s play areas. Some estates are positioned on a golf course, others have mountain biking trails and some are equestrian. Participation in sports and recreational activities adds significantly to the lifestyle on offer as well as the demand for properties in these estates.

Craig Hutchison, CEO of Engel & Völkers southern Africa, explains that for investors and home buyers, the ‘community living’ lifestyle is attractive. But in order for estates to work properly, where residents are content and property prices remain stable, or better still appreciate, they need to be well managed.

“Living in a well-run estate can be bliss, but the opposite also holds true. It is immediately evident if an estate isn’t properly managed – the gardens within communal areas aren’t properly cared for, general maintenance is lacking, cars are parked where they should not be and the like,” says Hutchison.

For complexes to be well managed, it is beneficial for home-owners to understand what it entails and who the responsibility falls on. Below are the outlines of the two types of schemes pertaining to complex rules.

Full Title and Sectional Title Management

The way a residential community is managed depends on whether the homes are full title (free-standing or free-hold) or sectional title. Full title means that an owner has full ownership rights to the building and the land it is built on and refers to free-standing houses, cluster houses and small-holdings.

Sectional title refers to separate ownership of units within a complex or development. When you buy within a sectional title development, you purchase a unit together with shared ownership of the common property.  Sectional title properties include townhouses, flats, semi-detached houses and duet houses.

As such, different rules and regulations apply to full title and sectional title properties.

Full Title property and Home Owner’s Association

Full title homes in estates fall under the rules and regulations of a Home Owners Association (HOA). Estate residents who own property in the complex are elected on to an HOA board of trustees. The board is responsible for making sure that the rules and regulations agreed upon by the residents are adhered to. Usually these leaders are elected because of their abilities and time capacity. For example, it is beneficial to have someone who understands property law to be part of the HOA board, as well as an accountant, an architect, landscaper and someone who works within the relevant municipality.

People who are retired also offer valuable expertise as they have the knowledge, the time and the interest in maintaining standards within the estate. Having the right people lead the HOA will hugely benefit the entire estate community.

Sectional Title property and Body Corporate

When living in a sectional title unit within a complex, the governing body is the Body Corporate (BC). All registered unit owners within the complex are members of the BC. The BC is responsible for managing the scheme and taking care of its finances. The members elect trustees who ensure that the daily running of the complex is carried out. Also, when the buildings need painting and walkways need to be repaved, it is the responsibility of the trustees to manage the implementation of the project, on behalf of all owners.

A managing agent is often appointed to take care of the duties of an HOA and BC. Duties include ensuring compliance with the relevant Acts, collection of monthly levies, paying the scheme’s insurance, arranging meetings, and making sure that the owners and tenants adhere to the rules.

Estates to fit your lifestyle

When buying property within estates and complexes, you should always look at the rules and regulations first, as well as the financial statements. Some estates don’t allow pets, while others have various rules pertaining to animals. Some communities aren’t child-friendly while others are made up of young families and children are allowed to play freely in the streets and in the communal areas.

“With estate living there are complexes to suit everyone’s life stage and needs. In this way, you will get the very best out of community living as you’ll be surrounded by like-minded people with similar lifestyle requirements, which makes for optimum enjoyment of your home and its surroundings,” concludes Hutchison.

For investors wanting to explore the benefits of estate and complex living, go to Paddocks Estate and Oak Tree Village.

How a well-designed Home can increase sales price

By Veruska De Vita

Have you ever wondered if contracting an experienced architect when building a new home or making additions to your existing property is worth the investment? A study by The Modern House shows that a home that is well-designed can increase the sales price by 12%.

The study reveals that design is a differentiator for home buyers and they are prepared to pay more for a home that has a pleasing aesthetic look and feel and that accentuates their lifestyle. So yes, good design does command a higher premium.

Craig Hutchison, CEO of Engel & Völkers Southern Africa, is in agreement.  “A well-planned design for your abode is well worth its weight in gold. Employing the services of a professional designer or an architect – with the experience relevant to your needs and lifestyle – will pay dividends in the long-term,” he explains.

Consumers are searching for tangible experiences and this spills over into their home space. “Not everyone has a good eye for spatial design so if they’re buying a home that has had the hand of a designer or an architect, this is a bonus for them as the finished product is basically on a plate. Most people don’t know where to start and what will look good, so if they walk into a show house with a strong aesthetic and spatial appeal, they’ll want it. The benefit is that the buyer doesn’t have to worry about doing it himself and risking that the end product is not quite what he had in mind.”

“Architecturally designed homes are most apparent in the high-end market, such as properties in Waterkloof (Pretoria) and in estates. It starts with one property owner and quickly becomes a trend, with others in the area also employing the services of a professional. Part of it is keeping up with the trendsetters, another is the fact that a well thought-out and beautifully planned home adds significantly to how space is maximised and utilized. This then creates an overall sense of comfort and visual appeal,” continues Hutchison.

According to architect Mark Gouws, the benefit of using an architect far outweighs the upfront investment. “An architect not only presents options that are tailormade to your taste and requirements, but also ensures a cost-effective project. An architect is knowledgeable on the best and most cost-efficient products available on the market, and knows how to plan within budget to ensure that the client gets the best value for money without skimping on quality fittings,” he says.

An architect will also make sure that plan approval with the authorities is a seamless process and includes getting the required compliance certificates.  “It takes time, money and effort to get compliance certificates but it is well worth it down the line. Rather ensure that your home fits with the regulations instead of having water damage problems in years to come, for example.”

Architects also understand how smart design can save you money, and as a result, increase the value of your home. “Passive energy design can make significant savings on your heating and cooling costs. You shouldn’t have to switch on the air-conditioning in Summer because your house is too hot. A house should be designed in such a way that it is comfortable throughout the year. This is where passive design energy principles come into the picture. For example, a creeper planted in front of a window will prevent too much heat entering an area, whilst in winter the leaves fall and allow more sunlight through,” explains Gouws.

A healthy house means healthy inhabitants.  A professional can help you design a home that considers both the health of the environment and the building. “Ventilation is extremely important. A house needs to act like a great big lung, so air needs to flow comfortably through it to ensure a constant circulation of clean air. The healthier the house, the healthier you are and the more you’ll get out of your investment,” says Gouws.

Building is a big investment, so it’s important to get the best value you can. Using an architect may seem like a luxury, but it can maximise your budget and open up new possibilities. Furthermore, in terms of lifestyle experience as well as sales price, these elements will only appreciate. “If you’re considering a renovation, making an addition or building a brand new home, getting a good architect and interior designer from the start will pay dividends later,” concludes Hutchison.

Creating the ideal Children’s Bedroom

By Veruska De Vita

One only needs to look at various Pinterest boards to notice that décor for children’s rooms is as eclectic and diverse as ever. This year, home design and décor are underpinned by an over-arching trend to be more self-expressive when choosing elements to bring into one’s own living space, and the selection of colour, theme and balance in a child’s room is following suit. Wendy Williams, Director of Engel & VÖlkers southern Africa, provides valuable guidelines on what to keep in mind when creating the perfect space for your child.

A child’s bedroom is a space where they sleep, dream and play. It’s their own little world where they can be themselves and feel comfortable and safe. Whether you opt for a jungle theme or parred down neutrals, children’s rooms should allow for both fun and functionality with easy access to toys and other essentials.

This year, consumers are choosing what they like, what they want and what makes them feel happy and incorporating these into their own context as opposed to following a trend meticulously. The toddlers, children and teenagers in our lives have their own personalities and tastes and if we incorporate these into their space, it showcases their unique perspective and self-expression.

While the trend for 2019 revolves around personal style, there are a few things to consider when designing a child’s bedroom:

 Form and Function

The format of a child’s bedroom should be functional for both parent and child. Toys, games, colouring books and crayons ought to be well within reach. Create a place for everything as this will help you be better organized and make tidying up quick and easy. Who wants to spend hours packing away toys? Make a place in cupboards for seasonal clothes and pack away out of season attire for the following year or, if your child has grown out of them, give them away or hand them down.

The room should be welcoming and not visually cluttered and the general rule of thumb where less is more applies to this bedroom also. In this way, every aspect of the space can be fully enjoyed and appreciated. It will also look good.

Age appropriate furniture and décor

Know that the space will grow and change with your child. The toy box in the corner may be replaced with a reading nook and a toddler-sized table and chairs will probably be cast out in favour of a homework desk and bookshelves.

By reflecting the age of your offspring, the room will be all the more inviting and user-friendly. Young children will appreciate low shelves where they can reach toys, whilst storage boxes in a hardy material such as wood or plastic helps keep the room free of clutter. Teenagers will need drawers to store gadgets and bookshelves to keep textbooks.

If you’re about to invest in furniture, a good idea is to visit outlets that specialise in bedroom furniture that grows with your child. Modular pieces provide a cost-effective way of re-inventing the space at each major growth spurt.

In terms of soft furnishings and décor, bring in a young child’s favourite cartoon character through bed linen and decals for the walls. For older kids, well-placed inspirational quotes or their favourite photographs not only add personality but the objects become a talking point.

Creativity and self-expression

Walls are an ideal canvas for artistic expression. Using one wall to showcase your child’s artwork from pre-school all the way up to high school adds a pop of colour to a neutral palette, an area of interest to a themed room and furthermore instils a sense of pride and ownership. Personalising a child’s room will help them explore and cultivate their own style.

If you have the basics right, changing this bedroom as time passes becomes fun and easy. Enjoy the process!

Diversifying your property portfolio

Diversification is a key wealth strategy, but what should consumers invest in? Should they hedge their Rands and invest overseas?  Or it is better to buy a number of properties costing under R1 million?  

Grant Wheeler, Director of Engel & Völkers Southern Africa, says property should always be a part of any balanced investment portfolio. Keeping the active versus passive, cash versus geared debates aside for the purposes of this discussion there should always be a stepped/progressive approach to investing in property. What follows is aimed at the Average Joe who has a steady job or income and has a lump sum available to invest.

Building a balanced investment portfolio made up of shares (listed and unlisted), ETFs, bonds, property stocks, physical property, etc. can essentially start anywhere. Usually at the beginning of any portfolio build liquidity is important. You are bound to make mistakes and will need to be adjusting your capital allocation constantly. A big property purchase for example is difficult to get out of if that lease you are relying on falls through, particularly if that lease underpinned the property value. Understanding the cash required as well as cash generating abilities of each investment type is crucial.

Once you’re ready to invest in property you’d want to step in gradually, test your decisions and make the necessary adjustments as soon as possible. This as with any investment can also mean taking a loss. Key here is to act quickly. If unit prices are tumbling in the project you have a rental unit in and the rentals are dropping as a result of the neighbourhood declining, get out, move on. Property cycles can last years, decades even. Don’t rely on things turning in order for your investment to be saved.

Looking for the right income generating rental unit can be daunting. It’s always a good idea to buy locally to start with. Buy in the neighbourhood you know and understand. Once you’ve cut your teeth on the rental unit around the corner you can think about venturing further afield. Here you might follow your child to the university they are attending and buy a student unit in close proximity to the university. You might then buy the unit you’ve been renting at the coast as you’ve experience just how busy the complex is and have seen the rentals appreciating year on year. Next you could buy the retirement unit to house your ageing parents. In other words whilst expanding, diversifying geographically, diversifying your product type, you are doing this with a well thought through reason. You are addressing a need you know exists.

Once you are confident and comfortable with your local rental returns you might want to invest in foreign markets. To be clear the main reason you’d invest off-shore is because you believe [1] the Rand will devalue against your target currency [2] the capital gain is equal to or better than the local market and [3] rental escalations and occupation levels will be better. A key consideration here is to determine the ease of investing, selling, and getting your money back. You will need a good understanding of the market as well as knowledge regarding tax and legal differences etc. Being on a different continent with potential time and language differences can add a level of complexity to the mixture.

Without a doubt whether investing locally or in foreign markets it would be crucial to engage with a property professional to help guide you through the process. Advice from the right professional can be invaluable. Choosing a global property group who are able to connect you with the right opportunities both nationally as well as internationally makes sense. The benefit of having a single point of contact for your property dealings will save you time, money and a lot of inevitable frustrations.

Dainfern residential property enjoys significant growth due to investment and development

Established a little over 25 years ago, Dainfern is an upmarket suburb within a sprawling residential and commercial hub touted as Johannesburg’s ‘New North’. The suburb is home to well-known celebrities, artists, entrepreneurs, business owners, wealthy individuals and expatriates who enjoy the many live, work and leisure benefits that the area and its surrounds offer.

Dainfern is part of the greater Fourways area – the New North, which is one of Gauteng’s most rapidly expanding and developing nodes. Craig Hutchison, CEO of Engel & Völkers Southern Africa explains that the growth shows no sign of slowing down and may soon overtake Sandton as a prominent business district.

“Dainfern property is back in demand, especially with the R2.4 billion expansion of Fourways Mall and significantly, within the next 10 years, the next two stages of the Gautrain development,” says Hutchison.

Fourways is ideally situated between Johannesburg and Pretoria, providing convenient access to major highways and arterials. The area is also equipped with an array of excellent private and public schools including Fourways High School, Crawford Fourways, Bryandale Primary School, Chartwell Country College and Cedarwood School. In terms of essential amenities Life Fourways Hospital is highly regarded and Sandton Clinic and Sunninghill Hospital are in close proximity.

World-class shopping and entertainment are also on offer at Monte Casino, Design Quarter and the expanding Fourways Mall. Lanseria International Airport is a few kilometres away and for individuals who enjoy the outdoors it is an easy drive to the Magaliesberg Meandor and to the Norscott Koppies Nature Reserve.

Hutchison explains that Dainfern residents have the opportunity to enjoy all that the area has to offer and more. Dainfern Lifestyle and Golf Estate is at the heart of the neighbourhood, and is flanked by the smaller suburbs of Dainfern Valley and Dainfern Ridge.

A wide range of properties on offer

 For both buyers and investors, the neighbourhood offers a wide range of properties from apartments and townhouses to clusters and sprawling family homes. The area attracts young individuals and families with the majority of buyers in the 36 to 49-year-old age bracket followed by consumers aged between 18 and 35. Many buyers view property in the area as a long-term investment and will rent units out, taking advantage of the buoyant rental market.

Studio apartments sell from R600 000 onwards. Two-bedroom, two-bathroom apartments range from R960 000 to R1.5 million. Cluster homes in secure complexes or estates start at approximately R1.7 million. Whilst freestanding properties average around R1,6 to R2 million with the top end standing at over R5 million.

“Dainfern’s residential properties have once again become sought after assets and property prices will climb as demand continues. The new Fourways Precinct currently underway makes the suburb a thriving Metropolitan area offering convenience, growth and lifestyle,” says Hutchison.

“We have recently been mandated by International Housing Solutions to sell a current development on their books, The Paddocks Estate” stated Craig. For both buyers and investors, the Paddocks is ideally situated within this thriving neighbourhood. The lifestyle is perfectly suited to young professionals, those starting a family or investors with a keen eye for a quality development,” concludes Hutchison.

The Paddocks is a 3 storey walk-up development catering for everyone with 4 options to choose from ranging from Studio apartments from R610 000, Bachelors from R645 000, 2 bedrooms, 1 bathroom from R900 000 and 2 bedroom, 2 bathroom from R965 000.

The complex has 24 hour security with access control offering a secure lifestyle with abundant open park spaces, children’s play areas, a tennis and basketball court, clubhouse with pool and onsite laundry facilities.

The Paddocks is conveniently situated with direct access to the trendy Dainfern Square Shopping Centre, which is home to a Virgin Active Gym, Woolworths, Pick n Pay and a selection of restaurants – a world of retail and entertainment on your doorstep.

For more information, click here

Bond and Transfer Fees explained

By Veruska De Vita

Whether looking to get onto the property ladder or buying that sprawling family home you’ve always longed for, purchasing property is one of the biggest undertakings and investments you will make in your lifetime. As such it is crucially important to understand everything in the purchase equation, especially the fees.

In a nutshell, over and above the actual cost of the property, a buyer needs to set aside money for bond origination costs, transfer fees and transfer duties. The bond repayment is made to the bank every month for the agreed upon period, transfer duty is a tax based on the value of the property and is paid to SARS, while the transfer fees cover the costs for transferring the property into the buyer’s name (the conveyancing fees) and for registering a bond.

“Once a bond has been granted and the buyer has accepted it, he or she will pay fees to register the bond and to transfer the property. The buyer will always be required to pay these fees, while transfer duty need only be paid if the property costs more than R900 000,” says Grant Wheeler, Director of Strategy and Expansion: Engel & Völkers Southern Africa.

How much are the fees?

“As a rule of thumb, the buyer should allow for between 8% and 10% of the amount of the purchase price for all the other costs involved in purchasing the property excluding a potential deposit. In addition to these expenses, buyers should also make provision for additional charges, which can include rates and clearance certificates and prospective taxes amongst others,” says Wheeler.

Bond registration costs

 Conveyancer’s Fee. The conveyancer’s fee for bond registration covers the service of getting the bond registered over the title deeds. The amount varies in relation to the home loan amount. While the fee is based on tariffs recommended by the Law Society, it may differ slightly from one law firm to another.

Examples:

  • On a bond of R 650 000.00 the fee is approximately R 8 400.00 excl. VAT.
  • On a bond of R 2 000 000.00 the fee is approximately R 16 560.00 excl. VAT.

There are also sundries to be paid. The amount is usually fixed and each law firm has its own rates. The average is R650.00 excl. V.A.T. per bond. The charge covers small things like posting documents to other conveyancers, the bank, the estate agent, the Deeds Office, to the buyer etc.

Attorney’s Fees are always subject to VAT being added.

Deeds Office Registry Fee. This fee is charged by the Deeds Office for the legal registration of the mortgage bond.

 As per the Deeds Office schedule of fees for 2018, the amount is fixed according to the amount of the home loan.

Home Loan R
(i) does not exceed R150 000 376,00
(ii) exceeds R150 000 but does not exceed R300 000 486,00
(iii) exceeds R300 000 but does not exceed R600 000 606,00
(iv) exceeds R600 000 but does not exceed R800 000 852,00
(v) exceeds R800 000 but does not exceed R1 000 000 978,00
(vi) exceeds R1000 000 but does not exceed R2 000 000 1 098,00
(vii) exceeds R2 000 000 but does not exceed R4 000 000 1 522,00
(viii) exceeds R4 000 000 but does not exceed R6 000 000 1 846,00
(ix) exceeds R6 000 000 but does not exceed R8 000 000 2 197,00
(x) exceeds R8 000 000 but does not exceed R10 000 000 2 568,00
(xi) exceeds R10 000 000 but does not exceed R15 000 000 3 057,00
(xii) exceeds R15 000 000 but does not exceed R20 000 000 3 671,00
(xiii) exceeds R20 000 000 but does not exceed R30 000 000 4 278,00
(xiv) exceeds R30 000 000 6 113,00

The transfer also needs to be registered with the Deeds office:

Purchase Price/ Value of Property (whichever is greatest) R
(i) does not exceed R100 000 36,00
(ii) exceeds R100 000 but does not exceed R200 000 78,00
(iii) exceeds R200 000 but does not exceed R300 000 486,00
(iv) exceeds R300 000 but does not exceed R600 000 606,00
(v) exceeds R600 000 but does not exceed R800 000 852,00
(vi) exceeds R800 000 but does not exceed R1 000 000 978,00
(vii) exceeds R1000 000 but does not exceed R2 000 000 1 098,00
(viii) exceeds R2 000 000 but does not exceed R4 000 000 1 522,00
(ix) exceeds R4 000 000 but does not exceed R6 000 000 1 846,00
(x) exceeds R6 000 000 but does not exceed R8 000 000 2 197,00
(xi) exceeds R8 000 000 but does not exceed R10 000 000 2 568,00
(xii) exceeds R10 000 000 but does not exceed R15 000 000 3 057,00
(xiii) exceeds R15 000 000 but does not exceed R20 000 000 3 671,00
(xiv) exceeds R20 000 000 4 890,00

Transfer Duty

Transfer duty is a tax that is payable to SARS and is based on the value (not the selling price) of a property.

Below are the transfer duty rates applicable on property purchased between 1 March 2018 to 28 February 2019:

Value of property Rate
0 – R900 000 0%
R900 001 – R1 250 000 3% of the value above R900 000
R1 250 001 – R1 750 000 R10 500 + 6% of the value above R 1 250 000
R1 750 001 – R2 250 000 R40 500 + 8% of the value above R 1 750 000
R2 250 001 – R10 000 000 R80 500 +11% of the value above R2 250 000
R10 000 001 and above ​R933 000 + 13% of the value above R10 000 000

Bond Initiation Fee

A Home Loan or Bond Initiation Fee is charged by the bank for the processing of the bond application. Some banks work on a base fee plus a percentage of the loan amount, other banks charge a flat rate of approximately R6037.00 (Incl. VAT).

“A reputable real estate company will assist buyers to understand the fees and expenses involved in the purchase of property. Ensure that you deal with a company that is professional and offers comprehensive advice, especially if you are a first time buyer,” concludes Wheeler.

Container Homes

By Veruska De Vita

Far from being shabby and a little grungy, container homes have slipped into mainstream habitation in many parts of the world and in South Africa the trend has started to take shape, albeit slowly. In recent years, much of the development of shipping container homes has focused on tiny homes and ultra-affordability, but the market for luxury container homes is also growing exponentially.

For a number of architectural firms, the challenge and the innate design potential of shipping containers has forged a budding new aesthetic, one that is becoming notably sought-after amongst those who have the means and the flair for provocative and experimental statements.

 But what about the aesthetics of luxury and space?

Wendy Williams, Operations Director of Engel & Völkers Southern Africa explains that building with shipping containers pushes the envelope on a contemporary aesthetic and provides solutions to a number of building challenges.

“Shipping containers allow for the kind of sculptural architecture that – allow me the irony – is completely out the box. It allows a property owner to build in areas where the transportation of building materials is challenging, such as in a desert or at the top of a mountain. The use of containers opens up many possibilities in terms of location and construction that considers the integrity of the environment.”

Nico van der Meulen architects created a house that makes use of sections of shipping containers. The end result is a sculptural masterpiece that is stylish, sleek and a statement in creativity. The house is situated in Kloof Road, at the foot of a nature reserve, in Bedfordview. The house is an integration of glass, steel, timber and concrete. The steel forms visually blur the borders between floors walls and roofs and seamlessly link exterior to interior.

A Bolthole in the Bush

Edge Design Studio Architects have created a shipping container retreat that is manufactured in a factory and then placed on a flatbed truck and transported to a desired location. The prefabricated house allows for all the creature comforts for a perfect weekend home away from home.

“Container homes defy and challenge tradition. From the perspective of durability, they are structurally sound because, after all, they were made to withstand harsh weather at sea. They are also quicker to build compared to conventional homes because walls, floors and ceilings are already intact, one just needs to insulate and add to the shell,” continues Wendy.

Smooth integration of repurposed and new materials

The Joshua Tree Residence in California has received a lot of attention. The three bedroom, 195 m2 home is located in the California desert and is designed in a distinctive starburst shape with containers extending out in various directions.  Painted bright white, the containers are a conspicuous contrast to the rocky desert terrain. The design takes advantage of the remarkable landscape and maximises views of both earth and sky, while providing privacy to its inhabitants.

Sprawling Family Home

One of the largest shipping container house of its kind in Australia, a three-story residence in Brisbane required 31 containers to achieve 550m2 of floor space. The house was built using ample glass and industrial touches resulting in open spaces, clean lines and plenty of natural light. The quality finishes and bespoke mid-century inspired furniture add to the industrial chic effect.

Sustainability

Sustainability, durability and reusability are all words that have become part of contemporary architecture and design. Issues of sustainability have sparked innovative and creative ways for building homes that are beautiful, environmentally gentle and efficient. As the world turns so does design innovation and container homes fit squarely in this exciting movement.

Investing in rentable property

By Veruska De Vita

Purchasing a rental property is a major investment and can be a lucrative one.  But before making a final decision, take a step back and do some research.

Craig Hutchison, CEO Engel & Völkers Southern Africa says that it is important to take precautions when deciding to invest in buy-to-let property. “Take your time, look around and seek advice. Do your research and understand the market. Chat to a professional real estate company about what they have on offer that both suits your budget and your long and short term needs,” says Hutchison.

Know your consumer and find your niche

There are a variety of consumer types who seek the benefits of renting property, rather than owning it. Each consumer profile requires a specific type of property in a particular area and within a definitive budget. Students, for example, require property that is walking distance to university for a period of between three to five years. The property needs to be affordable, small and one to two bedroom if students intend on sharing. Fully furnished is also preferable.

Corporate businesses looking to accommodate international consultants will need an entirely different type of property. This property needs to be upmarket, situated in a central business district close to the corporate offices as well as malls and restaurants. This renter prefers properties that are fully furnished and exude luxury. The tenant is usually a client or a consultant who will reside in the property for a number of weeks or months at a time.

Singles are consumers who have started their career and are building towards purchasing their own home. They prefer the lock up and go lifestyle so an apartment in a newly built development where there is access to a clubhouse, laundry and gym, is ideal for this tenant.

Vacation property attracts a different tenant altogether. This type of buy to let usually generates high yields during very specific times of year, the rental period is short and can be days or weeks. It goes without saying that this type of property needs to be well located in areas where people enjoy vacationing, close to public transport, entertainment, beaches and places of interest. These need to be fully furnished and refurbished regularly to keep them attractive, especially where vacation rental property competition is high.

Do a pro forma analysis

Hutchison suggests doing a pro forma analysis on the property you’re looking to buy. “Look at similar properties in the area, research how the rents have changed in the past five years and how they are projected to change in the next ten years. Calculate the estimated maintenance and operational costs and you will have a better understanding on how much nett income the property would generate and what the capital growth would be,” concludes Hutchison.