In this current turbulent economy, creating and sticking to a personal budget is a fundamental step towards really managing your money effectively and avoiding debt. This requires time and discipline – you will need to honestly examine your income, spending habits, and debts, and make some key decisions about how you will spend your money going forward.
The word budget might bring on negative feelings in some; they associate it with restrictions and a lot of hassles. “With a budget, you can begin to prioritize your spending and better manage your money and financial future. Instead of viewing a budget as a negative, view it as a tool for achieving your financial goals, and a step closer to owning your new home or even a second home” says Craig Hutchison, CEO Engel & Völkers Southern Africa.
You may perhaps feel like you do not have any funds to budget with, and that each rand already has its allocation. However, keeping a budget might highlight areas where you would never have suspected an over spend. Budgeting is simply the process of creating a plan of how and where to spend your money that you receive, by balancing your expenses with your income.
Benefits of having a budget and sticking to it
A budget is there to enable you to get a hold on your spending and save where you can, and it will also keep you out of debt or help you work your way out of debt.
It gives you control: If you feel like you are not in control of your money and you are constantly wondering where it went and what happened to it, budgeting can put you in control. When you budget wisely and understand where your money is going, you will feel more in control and at ease with your financial situation.
Puts the brakes on spending what you don’t have: It forces you to work with the money you have – you’ll know exactly how much is coming in this month, how much you need to spend and save and how much you have left over. It will discourage you from relying on credit cards to make unnecessary purchases and end up with major debt problems.
Work towards your dreams: It teaches you to save first and to decide what to save for. This will help you to map out your life goals and you can focus your money on the things that are most important to you. You will find it easier to turn down impulse buys and to put your money where you really need it. This may be getting out of debt, saving up for a home or working on starting your own business.
Prepare for emergencies: An emergency fund should cover 3 – 6 months of your living expenses so that you can survive until you are back on your feet. Don’t try to save this fund all at once. Rather, build a payment plan into your budget and start growing the fund as soon as possible.
Keeps your credit score healthy: 35% of your credit score is based on your payment history, while 30% is based on your debt-to-credit ratio. By paying your bills on time and paying down your debt, you’ll boost your credit score considerably, which means that you’ll have an easier time qualifying for loans with lower interest rates when you need them.
Tips for starting a budget
- Gather every financial statement you can. This includes bank statements, investment accounts, recent utility bills, and any information regarding a source of income or expense.
- Record all of your sources of income.If you are self-employed or have any outside sources of income, be sure to record these as well.
- Create a list of monthly expenses.Write down a list of all the expected expenses you plan on incurring over the course of a month. This includes a mortgage payment, car payments, auto insurance, groceries, utilities and entertainment – essentially everything you spend money on.
- Break expenses into two categories: fixed and variable.Fixed expenses are those that stay relatively the same each month. Variable expenses are the type that will change from month to month.
- Total your monthly income and monthly expenses.If your end result shows more income than expenses, you are off to a good start. This means you can prioritize this excess to areas of your budget or pay more on credit card balances to eliminate that debt faster. If you are showing a higher expense column than income, it means some changes will have to be made.
- Make adjustments to expenses.If you have accurately identified and listed all of your expenses, the ultimate goal would be to have your income and expense columns to be equal. This means all of your income is accounted for and budgeted for a specific expense or savings goal. If you are in a situation where expenses are higher than income, you should look at your variable expenses to find areas to cut. Since these expenses are typically non-essential, it should be easy to shave a few Rands in a few areas to bring you closer to your income.
- Review your budget monthly. After the first month take a minute to sit down and compare the actual expenses versus what you had created in the budget. This will show you where you did well and where you may need to improve.
Budgeting to buy a home
A good budget plan begins one or two years before the buyer makes an offer. Having a monthly budget has more advantages than simply making sure you have enough in the bank to cover your bills – it can also help you determine how much house you can afford.
Here are four tips for renters who plan to become homeowners:
- Build strong credit and raise your credit score – The most important focus for all potential buyers should be improving their credit score. A low score can prevent someone from buying a home or at least from qualifying for an affordable mortgage rate. To improve credit scores, buyers should pay off past-due bills, pay every bill on time and reduce their balances to less than 30% of the credit limit on every account. It is best to have three to five credit accounts, such as a car loan, student loan or credit card, for one year or longer.
- Reduce debt – while buyers increase their savings, they should also reduce their debt. Paying off debt tops saving in terms of priorities because of the interest payments on the debt, which exceeds the amount of interest they can earn on their savings. Lenders want to see that you are managing your debt and keeping your credit card balances low.
- Practice making house payments – future homebuyers are encouraged to make “virtual” mortgage payments as a way to build up savings and learn to budget for actual mortgage payments down the road.
Keep an eye on DTI – debt-to-income ratios are an important element in a loan approval. This ratio compares minimum monthly payments on all debt to gross monthly income. If your debt-to-income ratio is over 50%, you need to pay off your debt before even thinking of buying a home.
What should you budget for?
Hollard lists some of the major expenses, to help you prepare for the other costs associated with your new dream home:
Banks typically require a 10% deposit on the purchase price of your home, but this can be as much as 30% depending on your credit rating. If you are in the market to buy, you’ll need to have a deposit in hard cash. It is paid upfront and once-off to the transferring attorneys.
- Initiation fee
This fee is charged by the bank at the start of the loan (if you take out a bond). It can be paid upfront and as a once-off fee, or capitalised to your loan amount.
- Transfer duty
After your deposit, the transfer duty is one of the biggest upfront and once-off costs to consider when buying a property. Transfer duty is a tax levied by the government and no property can be transferred to a new owner if this is not paid. The only time transfer duty is not payable in a normal sale of property is when you are buying from a registered VAT vendor (developers as an example), in which case VAT is included in the price. The higher the value of the property you buy, the higher the percentage of duty payable. Property transactions below R900 000 are exempt from transfer duty.
Tip: See SARS website for transfer duty rates based on property price categories.
- Transfer costs
Transfer cost is the professional fee that the conveyancing or transferring attorney charges in a property transaction to register your ownership of the property with the Deeds Office, protecting your legal title to the property. This is paid once-off before registration and is not to be confused with transfer duty.
- Bond registration costs
For the bank to make sure that they have some form of security over the property you have taken a loan on, they will register a mortgage bond that confers certain rights on them. This bond is registered at the same time as the transfer of the property and is done by the bond registration attorney, an attorney on the bank’s panel. Similar to transfer costs, this attorney will also charge his professional fee for registering the bond, which the buyer has to pay.
- Occupational rent
This is a fee that is payable only if you take occupation of the property before the transfer of the property into your name has been registered. The rate is usually stipulated in your Offer to Purchase.
- Moving costs
Shop around for the best rates and service, and remember that typically month-end is busiest and more expensive. Some removal companies offer special pricing during off-peak times, so don’t be afraid to ask.
- Protect your finances with a Home Warranty
Research shows that most defaults on home loans occur within the first 18 months from when the loan is taken, because this is likely to be the time you’re most financially stretched and can least afford costs associated with hidden defects. Hollards Home Warranty addresses the issues around defects, with a professional property inspection that is coupled with an insurance policy. This protects you as the buyer against the financial ramifications of any hidden defects that may emerge in the property for two years after taking transfer. The cost of the warranty is covered by the seller – all you have to do is ask for it in your Offer to Purchase.
- Homeowners and life insurance
The bank will require protection to ensure that the value of their security on your loan, the house, remains intact. To achieve this, the bank will require that you take out two types of insurance which need to stay in place for as long as you have the loan with the bank. The first is homeowners’ insurance which protects the bricks and mortar of the property against an insured peril such as fire, flood and so on. The second is life cover which in the event of the death of the property owner or bond holder, the insurance will settle the outstanding bond amount so that your family is not lumbered with the debt you owe to the bank. In both instances, you have the option to take this insurance through the offering via your bond provider, or through your current preferred broker or insurer. It is often worth comparing and shopping around to see where you get the best offer. Where you do not use the bank’s offering you will need to provide proof of external insurance.
- Contents insurance
Although not obligatory, it’s highly recommended that you insure the contents of your home against loss or damage as a result of theft or burglary and other perils such as fire, flood and extreme weather conditions. This insurance is often combined with homeowners insurance, and if you have car insurance, with one insurer, this usually results in a much cheaper combined premium.
- Rates and taxes
Once the transfer is completed, you will need to register for rates and taxes as well as your water and electricity services. The municipality will require a deposit – the amount varies from municipality to municipality and is linked to the municipal value of the home.
- Total cost of ownership
Owning a home comes with on-going costs such as electricity, water and refuse removal (on your municipal account), garden and cleaning services, maintenance, painting and so on, which all need to be budgeted for.
If you need help, there are various tools to help you get started on the road to financial freedom, and if you are planning on buying a property a real estate agent might be one of your best. They can precisely give you the breakdown of what you need and eliminate any hidden costs along the road which could cause your new home bliss to quickly turn into a nightmare. Prevention is always better than cure.
This January Engel & Völkers Pretoria New East celebrated their 6th Birthday as well as their 2nd year under the helm of the new Licence Partner, James Verwey. Chantalle Bell, Feature Writer of Engel & Völkers Southern Africa had a chat with him to gain some insight into his life, his interests, his outlook on the business and industry, and what plans he and his Team Leader, Mariëtte Schoeman, have for the future.
The professional side of James
James spent his childhood in Stellenbosch and later matriculated from Menlo Park High School Pretoria, where-after he returned to Stellenbosch to study Law at the University of Stellenbosch. He never practiced Law and opted to take up a unique career opportunity with Toyota South Africa as one of their first Graduate Management Trainees. His career grew rapidly over the 10 year period he spent with them and received great exposure and experience in the corporate business world.
Wanting to revisit his plans for the future, the next year was spent on a sabbatical traveling all over Europe and Southeast Asia, also opening his eyes for international opportunities. During these travels, he got exposed to Dubai and when a great opportunity there presented itself; he decided to join the Toyota and Lexus group of companies in Dubai as Marketing Manager. After another 10 years, he decided to semi-retire back to South Africa and purchased a guest house in Paarl, which he still owns today.
Whilst operating the guest house, another major automotive group in the Middle East approached him to head up a new company in Abu Dhabi, Premier Motors. Premier Motors is the sole agents for premium brands like Ferrari, Maserati, Jaguar, Land Rover and Ford. James filled this position for 9 years and it grew into one of the largest and most profitable motor companies in the United Arab Emirates. After almost 20 years in Dubai, James decided to return permanently to South Africa at the end of 2014.
James at home
James is married to Irina, who is originally from Siberia in Russia, and whom he met in Dubai 9 years ago. Irina is very fond of South Africa, particularly Pretoria, which is where they decided to call home upon their return from Dubai. Irina has a passion for gardening and loves to experiment with various flowers and plants, in addition to her freelance career as a Fashion Designer. They visit France annually, where Irina also sells most of her designs. They love traveling, both local holidays as well as exploring unique places. James has a son of 32 (James Junior) who resides in Namibia, which is also one of their favourite destinations.
As for hobbies and in addition to his passion for the real estate business, James enjoys playing golf and to spend time with his family and friends.
James & Property
As we have now gathered, James does not let an opportunity pass by, and clearly he is not one to sit and simply enjoy a quiet life. James kept in touch with a friend, Debbie Stevenson, Licence Partner of E&V Broadacres. Not too long into his “retirement”, he phoned her up to gain some insight into the property industry, what E&V was all about and what the business model entailed.
From here on things moved rather quickly. James met with Craig Hutchison, the CEO of Engel & Völkers and as fate would have it, the Pretoria New East territory was available. Within a month the deal was sealed and he took over the Silver Lakes Licence in January 2016. Since then James has acquired 2 further licences for the adjacent areas to have a diverse and large footprint in Pretoria New East, stretching from Moreletta Park down to Silver Lakes.
The property industry seems to run in James’ blood. His Mom (88) and his “best friend” owned real estate company called Gem Properties in partnership with two friends. So it comes as no surprise that when James registered his business, he named it GemProp Real Estate (Pty) Ltd t/a E&V Pretoria New East.
Outlook on the industry
James believes that even with the current economic climate, investing in property often presents unique opportunities for investors and buyers alike, whether residential or commercial. James started investing in property at a young age, with help from his parents. He convinced his parents to purchase a townhouse in Stellenbosch; at that stage it was purchased at R 18,000 and today it is worth R 3 million – proof that there is just no investment that grows as much as property does. Over the years, he has built a diverse property portfolio, reflecting his belief and confidence in property investments.
When asked about his outlook on the real estate industry James says it’s a very exciting industry, challenging but rewarding in the sense that knowing you and your team are fulfilling people’s expectations and dreams. It is very rewarding when you exceed clients expectations in finding their perfect property, whether a rental, a first property or their dream home.
What happens behind the doors at E&V New East?
About 7 months ago James’ team was joined by Team Leader, Mariëtte Schoeman. James says since Mariëtte joined, a new energy has been evident in the office, professional sales and marketing activities have increased dramatically and there are structured planning processes in place. James’ role is more strategic and supportive by nature and he leaves the day to day operational running of the business in Mariëtte’s capable hands. Mariëtte is also supported by Lyle Landsman, who has been with the operation since inception.
Mariëtte joined the team as she saw the opportunity for growth. Her connection to real estate stems from a historical interest in property as she comes from a commercial property management, residential sales and rental background. She has a keen business sense as she had her own successful landscaping business for 20 years, which she later sold to join the real estate industry.
Within the real estate sector she worked for a renowned estate agency for 8 years and completed her NQF4. Once this was mastered she was ready for a new challenge and she went into Commercial Property Management where she started her studies towards NQF5 & 6 in Commercial Property Management.
Mariëtte joined E&V as Team Leader at the Waterkloof Office where she spent 2 years before joining James’ team as their Team Leader, where she is currently busy with her NQF5 Residential Real Estate.
We asked her why she originally joined E&V and she said “because it’s an international brand and she liked the way the business plan is executed”. As the Pretoria New East office incorporates 3 licence areas, Mariëtte feels the challenge has great development capacity, both from a career as well as an investment perspective. Mariëtte has been given the opportunity and is working towards becoming an equity partner in Gemprop.
Mariëtte states the one thing she has learnt from the industry is that buying and selling property is a very personal and emotional experience and should not just be seen as solely a business transaction.
“The most enjoyable part about the industry is that no two days are the same; however as with anything else in life, it also comes with its challenges as every client is different and presents her and her team with their own unique challenges. Meeting monthly targets and continuously keeping the team motivated under pressure at all times are definitely challenging, but also very rewarding at the same time” she added.
What makes a winning team?
Both James and Mariëtte agree that in order to have the ideal and perfect team, the team must have good core values, which are well defined. These core values are also a critical component in the recruitment process – “A Team goes as the Leaders go”.
This, together with a good team spirit and support culture, forms the basis of their operations in striving for excellence. The management team developed an integrated business plan for the next 5 years, all encompassing, from strategic goals, corporate values and SWOT analysis, to budgeting and detailed action plans to execute the finer details of each business activity. The core values are shared with all the staff regularly to ensure all are aligned and positive in achieving their goals.
When asked what would her advice be to someone who is not in the industry and wants to join Mariëtte says, “Join a company that shares and offers you the required knowledge, tools and support to be able to be successful agent”. With all that in place there is a slim chance that an agent will be unsuccessful and then the potential to earn a very good income becomes a reality.
Tell us about the area
Pretoria New East is a very diverse area ranging from first time homeowners, developments and plots, to exclusive estates (e.g. Woodhill, Mooikloof and Silver Lakes) in both price and lifestyles. The long-term plan is to have the correct outlets, agents and infrastructure to support the activities with satellite shops. The end goal is to dominate the Pretoria New East in terms of sales, awareness and reputation. This will remain the main focus, backed up by a profitable and premium rental division to compliment the core business.
Exciting times lay ahead for the Pretoria New East area in the next 10-15 years. In anticipation of this, investors and developers are buying plots and rezoning them for residential housing. Major metro plans for the east is on the cards including a second highway which will be accessed from the N4 through a new R90 million road – the PWV17 – which will link the N4 and the R21, as well as the planned road upgrade for the N4 to link to Graham road directly.
What does the future hold?
Even although their team has doubled over the last 7 months, the focus and priority for the year ahead remains on recruitment of agents for all 3 of their licence areas, both qualified agents and intern agents.
James is of the opinion the business is still in a growth phase and requires further exposure to dominate their licence areas. To achieve this, they again need to double the current team – property sales and rental agents, as well as support staff. This is an integral part of the business plan to dominate their market.
If you are looking for a new challenge to take on this year, why not call Mariëtte for a confidential interview on 079 874 5572 and explore the options they have available.
The Southern Suburbs make up some of the most popular residential areas in Cape Town, comprising charming groups of suburbs which lie to the south-east of the slopes of Table Mountain. It is seen as the city’s most expensive residential neighbourhoods with a choice of various private schools, upmarket eateries, wine estates, beautiful homes and trendy apartments.
“The Southern Suburbs area is large and varied, and is predominantly residential. It is identified as being the more affluent of the Cape Town Metropolis with incredible family neighbourhoods. The properties vary from large plots of land, to a variety of older-style homes that range from cottage-style semis in Mowbray, Claremont and Wynberg, to more ornate and certainly far larger homes in Constantia, Newlands and Bishopscourt” says Delia Walters, Office Manager Engel & Völkers Southern Suburbs.
It boasts the ever popular University of Cape Town which lies on the mountain above Rosebank, Rondebosh, Mowbray and Observatory. When visiting the area there is always something to do to for young and old with a diverse mix of amenities and shopping areas like Cavendish Street, and depending on the time of year, you can even catch a game of rugby or cricket – in Newlands at the side-by-side rugby and cricket grounds, which are the home of the Stomers and Cape Cobras teams respectively. Tourists are attracted by the wine estates, the beautiful botanical gardens, various museums, hiking and walking trails and horse riding trails found throughout the suburb.
One can see why the Southern Suburbs will always be in demand and why it commands some of the highest property prices in Cape Town.
Average property value
There is no average, but there is certainly something for every buyer. Property values range from R1.2 million for a flat in Plumstead to R55 million for a house in Constantia.
Typical property type
As varied as the property prices are so are the homes. From R5 million for a trendy apartment in Upper Claremont to the beautiful palatial homes in Bishops Court and Constantia Upper. There is a combination of lock-up-and-go family homes with large gardens, beautiful cottages dating back to the late 1800’s early 1900’s and ample student accommodation in modern and affordable apartment blocks.
Trends and tips when buying property in the Southern Suburbs
Prices in the area will always be on the increase, so try not to be too set on an area or type of house. Delia advises that you consider your budget and then be realistic about what you can afford, you might have to compromise and buy an older home which needs some work in order to be able to afford to live in certain parts.
When moving from other parts of the country to the Southern Suburbs it can be quite a shock when you find that R2 million doesn’t really go very far. However, if you are on a limited budget, you do your research, and are prepared to downscale – anything is possible. If you are specifically moving into the Southern Suburbs for the schools, be sure to check the zoning for the school’s first. Real estate agents could be of great help here, so do not be too shy to ask.
What does the current market look like?
Buying a home in the Southern Suburbs will always be an investment. High rental returns make it a first choice for investment buyers wanting to grow a rental portfolio. Areas such as Rondebosch and Newlands have an ever increasing demand for student accommodation due to their close proximity to the University of Cape Town.
A large percentage are cash buyers due to the high price brackets of the properties, while first time buyers might find it harder to find their dream home at an affordable price. Don’t despair though, there is a property to suit almost everyone.
The Southern Suburbs as an investment option
- Consistent upward trajectory in house prices
- High rental return
- High rental demand for students and young professionals
- Excellent private girls and boys schools
- Close proximity to the city centre
- Scenic walks, hikes, equestrian trails and parks focused around a family lifestyle
- An abundance of restaurants, coffee shops, upmarket deli’s, art galleries and boutique shops
- A vast choice of modern homes, townhouses, mansions, heritage homes and apartments
Events to consider if you are in the area:
- Kirstenbosch Summer festival – every Sunday from the middle of November until the end of March. Live music performances by Prime Circle, The Parlatones, Mango Groove, Lira and Freshly Ground are some of the main acts which can be seen. Bring a picnic blanket and basket and enjoy an evening concert with a glass of wine.
- Cape Town Cycle Tour 2018 – Sunday 11th March 2018. Where thirty-five thousand cyclists embark on arguably the most scenic cycling race in the world.
- Two Oceans Marathon 2018 – 31 March 2018. This is by far the most scenic ultra-marathon in the world. It’s also one of the toughest, with the route taking runners over the gruelling Chapman’s Peak and Constantia Nek.
Delia’s recommendation of the top 10 things to do in the Southern Suburbs:
- Kirstenbosch National Botanical Garden is acclaimed as one of the great botanical gardens of the world; few gardens can match the sheer grandeur of this setting against the eastern slopes of Cape Town’s Table Mountain.
- Rhodes Memorial situated on the Northern slope of Table Mountain, this vantage point not only allows a panoramic view but is one of the few vantage points where both the Atlantic and Indian oceans can be seen.
- Garden Tour at Cellars Hohenort – the exquisite gardens of The Cellars-Hohenort Hotel, nestled in the verdant winelands of Constantia, Cape Town, is nothing less than breath-taking to see. Colours erupt as Clivias and roses bloom; and countless shades of green blanket the landscape thanks to ferns, delicious monsters, herbs and camphor trees.
- Relax at the Liesbeek River – The Liesbeek River Project is a community project that has transformed an overgrown wasteland into an area where people can now go to read a book, meet the friends for tea or entertain the children with a spontaneous picnic lunch. Situated on the banks of the Liesbeek, the river is deep enough for children and dogs to have a paddle!
- Baxter Theatre – as both stage venue and producer the Baxter has received national awards for outstanding local performers and home productions. Classical music, opera, comedy, dance and dramatic theatre is presented throughout the year on a daily basis mornings, afternoons and evenings for all ages and tastes. Seasonal festivals run annually.
- Constantia Nek Farm – Gordon and Anne Kling own and produce Kling wines on Constantia Nek Farm. Constantia is the oldest winemaking region in the Southern Hemisphere and originated in 1685. Some of the finest wines are produced in this region and regularly received international and local acclaim.
- Purple Wine Tour – is a free extension of the Cape Town Blue Mini Peninsula City Sightseeing bus (more commonly known as the hop-on-hop-off bus). It explores a few of the wine estates in the Constantia Valley, which form part of the Constantia Valley wine route.
- Newlands Brewery – nestled at the foot of Devil’s Peak and neighbour to the historic rugby and cricket grounds, is the oldest operating brewery in South Africa and the home of great South African beer.
- Groote Schuur Estate – Groote Schuur big barn used to be the home of Cecil John Rhodes. The house sits in Rondebosch and was refurbished by Herbert Baker many years ago. This fascinating house is steeped in history, filled with original colonial furniture and is now a museum.
- South African Astronomical Observatory – up on what passes for a hill, just across the Liesbeeck River from the Southern Suburb of Observatory, is SAAO (South African Astronomical Observatory). It lies wedged between the River Club and Valkenburg, its grounds home to a number of domes, one of which houses the Victoria telescope, built back in 1897.
A list of ultimate favourite restaurants
Spoilt for choice, whether it is fine dining, pub food or the best burgers and chips, there is something for every palate and pocket.
- Harbour House in Constantia offers beautifully presented dishes and an array of seafood.
- Bistro Sixteen82 in Steenberg Tokai boasts their signature wines and tasty dishes served with a view.
- The Square at the Vineyard Hotel in Upper Claremont serves delicious meals for anytime of the day.
- Rock Sushi Thai – in Meadowridge serves the best sushi; noodle and Thai curry dishes in the Southern Suburbs.
- Starlings in Claremont, perfect for brunch and quick catch up with friends.
- Four & Twenty in Chelsea Village Upper Wynberg, a firm favourite for breakfast.
- Cafeen in Claremont Village, a gem of a coffee shop serving light meals and great coffee.
- Hudsons in Upper Claremont is a popular spot with students with great burgers and cocktails.
Places to stay in the Southern Suburbs
Catering for families on holiday or short business trips, there is a large variety of accommodation.
Whether planning a visit or relocating – if you are not familiar with the Southern Suburbs yet, make sure to add it to your list of places to visit this new year.
A comfortable bed doesn’t necessarily mean that you are getting the quality sleep you need; the most important item for a good sleep experience is your mattress. It has been shown that we spend approximately a 1/3 of our lives sleeping, so it is fair to say it is a valuable part of our lives. It is the only time our body gets to repair and recharge itself for the next day’s activities, making it vital to choose the right mattress to feel rejuvenated and not lethargic when waking up.
“Investing in a good quality mattress that is perfect for you is significant as it could be quite costly, but if done right, be a valuable investment for years to come. With all the choices available, it could become quite overwhelming, so arm yourself with knowledge before purchasing, do not be afraid to test and to ask what you need to know” notes Tihara Baker, Relationship Manager for Engel & Völkers Southern Africa.
If you’re in the market for a new mattress, here is a list of things you should keep in mind when buying:
Each mattress is unique and can last for as long as it is cared for. If you treat your mattress properly it could easily last up to 7 – 10 years, however this is merely dependent on its maintenance and use.
Best brands for longest lifespan: It’s impossible to give a generic answer as to what brand of mattress will have the longest lifespan and be the best for you. It is very much based on the type of mattress you prefer or require due to health reasons, and your own personal comfort preference. Well-known brands include Simmons, Cloud Nine and Sealy.
Best type for longest lifespan: Any mattress that is used more frequently will have a shorter lifespan. So for example in your spare room you can maybe buy a cheaper mattress as it will be used less. For the main bedroom, buy a good quality as it needs to last longer. As a basic rule of thumb, air and innerspring have the shortest, memory foam offer mid length, whilst latex types are known to last the longest. However, you need to keep in mind that it will still need to be taken care of and cleaned regularly to ensure optimal a longer lifespan.
Read the instructions: Most manufacturers provide specific information on how to care for your mattress. It is always best to follow their guidelines and to understand what the limits are for optimal results and to save you from spending extra money in the future.
Protect your mattress: Mattress protectors are the best way to keep your mattress free from dust mites, bacteria, bed bugs and to create waterproof barriers. These covers are great especially when potty-training kids, and for people who tend to sweat in their sleep, to ward off bacteria getting through to the mattress as they are simple to remove and wash.
Beds are not trampolines: If you or your kids want to use your bed as a trampoline, this will seriously damage your matrass. Jumping on the mattress can do a lot of damage to its coil unit, comfort layers and foundation. The mattress will become too soft and compressed in no time at all and will leave you with a creaky and sagging surface.
Know where to sit: Avoid repeatedly sitting in the same spot for prolonged periods of time. For example don’t sit on the same edge of your bed to get dressed or tie your shoes, as doing so may eventually cause sagging or a weakened edge your mattress could lose its structure prematurely.
The Base: A base provides the best foundation for your mattress and ensures that it stays supportive and comfortable for years to come. Most manufacturers recommend buying a base and a mattress as a unit to ensure optimal performance.
Rotation: While most new mattress models offer a no-flip design, it’s a good idea to give your mattress a clockwise turn every 3 months to ensure even wear and avoid lumps and bump. Rotating it should be preventive maintenance, not something you try to do later to fix an already uncomfortable mattress.
Cleaning: Launder your sheets and mattress protection weekly in hot water to remove irritants like pollen and dust mites. Stains or spills should always be treated with caution – use slightly soapy water and a soft wash cloth to gently blot, never rub the affected area. Avoid harsh chemicals, as they may damage the foams and fibres.
- Consists of at least 5cm of memory foam, over at least 15 cm of support foam
- Min 10 years warranty, if kept ventilated, clean, and rotated
- Has the unique ability to conform to your body while dispersing your weight evenly throughout the bed. It improves circulation, making it ideal for achy joints, morning pains and restless sleepers
- Resistant to mould, bacteria, bed bugs, dust mites and many types of allergens
- Less prone to sagging
- Retain heat, restrict body movement
- Lack bounce, and have extended break-in periods
- Fairly expensive
- A variety of steel coil support systems consisting of springs connected into a single unit or individually wrapped pocketed coils
- Most likely will need replacing within 7-8 years
- Consumer familiarity and widely available
- Various firmness and comfort options to choose from
- Most affordable mattress type on the market
- Heavy and hard to move in order to clean or flip
- Movements are distributed through the whole surface, if you sleep with a partner, you will feel their movement
- Because of their underlying layers of wool and fibre, it provides the perfect environment for dust mites to breed without being disturbed.
- Combining two or more different types of support systems, typically sophisticated memory foams with an advanced innerspring system
- Poly foam is cheap and degrades quickly, so if the bed uses a lot in its base foam, the overall lifespan of the mattress will be shorter than the innerspring
- Reduces the motion transfer that can occur with tossing and turning
- Cool sleeping surface
- Less expensive than memory foam mattresses, making them a good choice for budget-conscious shoppers
- Initial off gassing odour
- Shorter lifespan due to large amount of poly foam
- Heavy and difficult to move
- These are the crème de la crème, and tick all the boxes for quality and longevity. All-latex mattresses consist of all-natural, blended, or synthetic latex.
- One of the most durable, resilient mattress materials which can last up to 15 years
- Extremely comfortable – this is due to the natural springiness of latex
- Promotes pain relief and is an ideal choice for those with back pain or joint pain
- A huge advantage of latex mattresses is their ability to promote proper spine alignment
- Tend to be more expensive than a cheap spring coil mattress or polyurethane (PU) foam mattress
- Somewhat heavier than many other types
- Constructed of different weights and densities of petrochemical-based flexible polyurethane foams or latex rubber foams.
- Low density foam has a short lifespan where higher density foam means more support and more durability.
- Limited heat retention
- Adequate motion isolation
- Too firm for some
- Relatively thin
- Below-average edge support
- Additional padding sewn into the top of the mattress. This padding can consist of regular foam, memory foam, latex, fibrefill, cotton or wool
- Can last up to 5-8 years
- Above average initial comfort
- Tops that include memory foam tend to have exceptional pain-relief potential
- Conforming ability
- Not being able to flip the mattress is one of the biggest objections
- Heat retention
- The pillow top part doesn’t last as long as the rest of the mattress
GUARANTEE VS. WARRANTY
The most reassuring thing about buying a bed or mattress from a reputable retailer is the guarantee and warranty that comes with it. It is great to be comfortable in the knowledge that your investment is protected.
For example, if you have bought a bed with a 10 year manufacturer’s warranty, the first 2 years (depending on the manufacturer’s terms), you will be reimbursed in full for any defective workmanship, this is known as a guarantee. The guarantee covers poor workmanship and/or material defects only. The manufacturer will either replace or repair your bed in accordance with their guarantee policy.
Tihara explains that your warranty comes into effect as soon as your bed’s guarantee period has elapsed. After this time period, you will be asked to pay a pro-rata cost for any repairs for the remaining 8 years, this is called a warranty. Warranty periods differ between all manufacturers, anywhere from between 1 to 25 years.
KEEP MAINTENANCE IN MIND
Rotating and flipping your mattress is not the only important thing it needs to last its full lifespan. Mattresses are home to bacteria, germs, mould and mildew, that can slowly eat away at the mattress materials and could later also start causing allergies. “It is advisable to have it cleaned professionally from time to time, though cleaning it yourself now and again is better than not at all” Tihara added. It’s very important when you clean your mattress to do it with proper cleaning products that it can withstand:
Step 1: Vacuum it
Vacuum all the overlapping, narrow paths and the sides of your mattress, to get rid of any dirt namely pet hair and dust that’s accumulated over time.
Step 2: Get the stains out
Mattresses typically acquire 3 types of stains: blood, urine, and any other fluids.
- Dried blood stains can be treated by making a paste of 1/4 cup hydrogen peroxide (3%) mixed with 1 tbsp. of liquid dish soap and table salt. Lightly spread this onto the stain and allow it to dry before scraping the residue off. Dab at any remaining stain with a white cloth dipped into hydrogen peroxide, rotating the cloth as the stain lifts off. (Using a white cloth prevents dye transfer from the cloth to the mattress).
- Urine stains dissolve 3 tbsp. baking soda in 236ml of hydrogen peroxide and add a drop or two of liquid dish soap. Dab this solution onto the spot. (Do NOT drench your mattress). If the stain persists, wait until the area is dry then whisk together 3 tbsp. dry laundry detergent powder and 1 tbsp. water to make a dry foam. Lightly spread this on the stain and let it sit for 30 minutes. Scrape the dried paste away with a spoon. Use a white cloth dipped into hydrogen peroxide to remove any stubborn bits of paste. Vacuum the area.
- Other bodily fluids (vomit, etc.) can be removed by blotting the stain with undiluted, unscented household ammonia. (Do NOT drench your mattress).Wipe the area with a clean, damp cloth and sprinkle the spot with baking soda to neutralize the odour and pull out any lingering moisture. Let this dry then vacuum the area thoroughly.
Step 3: Deodorize it
Over time sweat can build up. To rid your mattress of foul odours, sprinkle it well with baking soda and gently rub it in with a scrub brush, so it gets into the mattress fabric. Let the baking soda sit for at least 10 min, and then sprinkle another light layer of baking soda over the entire surface and let it sit for a couple of hours. It will absorb any excess odour or liquid from the stain removal process, and leave your mattress smelling fresh and clean. Vacuum the area thoroughly.
Step 4: Flip mattress and repeat steps 1-3
MATTRESS BUYING CHECKLIST
- How much can you afford? Knowing your budget is a great help, but saving a little more for a superior brand or type of mattress is a better plan. Rather opt for a 10 year long-term investment than having to purchase a new one every 3 years.
- What size do you need? If you are buying a complete new bed including the base, you must remember to measure your room as you also need to make sure you have enough space, not only for the bed to fit, but also to move around the bed freely. The ideal comfortable space around the bed should be 90cm.
- Check the warranty and guarantee. This differs from manufacturer to manufacturer obviously the longer the warranty, the better.
- What type do you prefer? This will depend on your budget, personal requirements and needs as well as your individual comfort preference.
- Keep your original base in mind. Should you not be buying a complete new bed you will have to find out if your base will it be able to give the mattress of your choice the ultimate support.
- Keep your weight in mind. A firmer comfort level is generally recommended for individuals of above average weight and build. The recommended mattress for plus-size people should be around 30cm thick; this is because thicker mattresses are able to better contour to the sleeper’s body, providing better pressure relief. Overall, memory foam and latex ranked as the best mattress types over spring beds and typically last years longer.
- Is the bed long and wide enough for you? Want to know if a mattress is going to be wide enough? Lie down on your back and put your elbows behind your head. Do your elbows touch your partner or stretch past the edge of the mattress? If yes, then you probably need a bigger size. A good mattress fit should give you at least 15cm of space at the foot of the bed.
- Firm or soft? Be aware that firm mattresses aren’t always better for your back. Contrary to popular belief, a mattress doesn’t have to be firm to be good for your back – there’s a difference between firm support and a firm feel.
- Your sleep position is also important:
- Firm – if you sleep on your stomach, a firm mattress will keep your spine aligned.
- Medium – best if you sleep on your back, as it’ll provide support for your spine, back and neck while keeping you comfortable.
- Soft – great for sleeping on your side because it’ll support and contour to your body’s curves.
- Most importantly don’t dial for your mattress – try before you buy. Whoever will be sleeping on the bed should go shopping for the bed. You really do have to lie down in your usual sleep position and give yourself a few minutes to see if it’s right for you. Turn from side to side, evaluate the support level, and make sure you feel relaxed and comfortable in all positions.
The Western Cape water crisis is coming to a head fast, and, for many, panic has started to sink in. With Day Zero more than likely, despite the best efforts of many residents to minimise water usage, drastic measures are now needed.
Come this day, the logistics of water collection are not known, but businesses, families and individuals in affected areas are already plotting Day Zero action plans – the result being new products and solutions springing up from businesses, supermarkets seeing record bottled water sales, and waterless hygiene products being snapped up from store shelves.
Posts are flying around social media with many people, understandably, expressing concern for citizens who may not be able to collect water for themselves such as the elderly and infirm.
One company, Amdec, has already started taking proactive steps to ensure that its retired residents will be catered for, by creating water-saving initiatives at its Evergreen retirement developments.
“Water consumption is already managed on Evergreen properties, with a focus on rain and grey water harvesting and water-wise gardens,” says Cobus Bedeker, Development Director of Evergreen Lifestyle Retirement Villages.
To ensure access to water does not become an issue at any of their five retirement villages in the Cape, Evergreen has put additional measures in place to prepare for the likelihood of Day Zero set for early April.
Evergreen developments in the Cape, including Bergvliet, Diep River, Muizenberg and Noordhoek estates will be treating borehole water for drinking water.
“Fresh bottles water will be supplied to all Evergreen residents in most case this will come from our water purification plants,” shares Bedeker.
He adds that Evergreen will also provide each home within the retirement villages with a 1000-litre slimline water tank to collect rain water to be used by residents for domestic use. This will be toped up with borehole water if need be.
One of its latest projects is the development of Val de Vie Evergreen near Paarl – the largest retirement estate in South Africa. The development went off the grid in early December 2017.
“We’re very fortunate to be in a position where there will be no ‘day zero’ at Val de Vie ,” says marketing director Ryk Neethling. “We have been working proactively with the Drakenstein municipality on this project which will free up municipal water resources for the community at large that would normally have been channelled to the 1 500 homes on the estate.”
The entire estate taps into the water-saving features already in place on the estate, including a water purification plant to utilise the underground aquifer and move away from reliance on municipal water. All new homes are being fitted with plumbing for grey water systems, along with general water-saving measures across the estate.
Water usage on the estate, including the Pearl Valley Jack Nicklaus Signature Golf course has been reduced by more than 50%.
“We have to adapt and become smarter in the way we use water. It is everyone’s responsibility to make a difference now to ensure resources for the future of South Africa,” concludes Arthur Case, Chief Executive Officer of Evergreen Retirement Holdings.
As greener, more efficient sources of energy and water continue to attract investors, Neethling says buyers want to see sustainable features as well as ethical and social responsibility from developers.
What will Day Zero mean for construction
“With the pressure on our water resource we have for some time now utilised treated effluent and borehole water during the construction phase of our construction projects,” says Bedeker. “The treated effluent water is collected by the appointed contractor at local municipal water treatment plants and is safe to use for construction and irrigation purposes. In addition, we are also focused on waterless construction methodology.”
Going forward, Evergreen is currently investigating water-saving building systems from the UK, USA and China for future projects. These building methodologies use limited water, improved quality – as most components are manufactured in factories – and reduce the construction period.
‘We are following countries like China, US, UK where most homes are constructed from steel, timber and environmentally friendly materials,” Bedeker concludes.
Waterwise construction is of course the future of the construction industry in South Africa.
The curtains have come down on section 18B of the Value-Added Tax Act, No. 89 of 1991 (VAT Act) and the resultant impact may catch a few residential property developers off-guard. The VAT relief afforded to such developers in section 18B of the VAT Act was introduced in 2011 and provided that where fixed property consisting of a “dwelling” (essentially a property used predominantly as a place of residence) was developed by a “developer” (as defined in the VAT Act) wholly for the purpose of making taxable supplies or was held or applied for that purpose, and such dwelling (e.g. flat/house) was subsequently temporarily applied by that developer for supplying exempt accommodation in a dwelling under an agreement for the letting and hiring thereof (i.e. in terms of an agreement of lease), such supply of the fixed property was deemed not to be a taxable supply in the course or furtherance of the developer’s enterprise. In other words, while the developer in these circumstances would have been deemed to have made a taxable supply of the property in terms of section 18(1) because of the change in use of the property from a taxable use (for sale) to an exempt use (residential letting), the application of section 18(1) was in effect suspended (i) for a period of 36 months from the date that the property was let, (ii) until the developer applied the property for a taxable purpose (i.e. sale), or (iii) 1 January 2018, whichever was the earlier.
The developer would have been able to claim input tax relief on all the goods and services acquired by it to develop the property and need not have clawed back such input tax notwithstanding its wholly exempt temporary use until the happening of one of the events referred to above. The relief measure was subject to a sunset clause in section 139(2) of the Taxation Laws Amendment Act 24, 2011, ending on 1 January 2015. An amendment to the sunset clause was later introduced by section 111(1) of the Taxation Laws Amendment Act 43 of 2014, which extended the application of section 18B for an additional three years up to 1 January 2018.
The relief measure accordingly no longer applies, and in the absence of section 18B developers who previously relied on this provision not to have to make a change of use adjustment under section 18(1) will now need to make the requisite adjustment. In essence, the developer will be required to account for output tax on the market value of the property (section 10(7) of the VAT Act) that is now being used wholly for an exempt purpose (residential letting). The developer will have to account for output tax on the market value of the properties notwithstanding that the developer has not sold the units and generated the income necessary to meet its VAT liability that arises in consequence of the application of the change in use adjustment in section 18(1) of the VAT Act.
The withdrawal of the relief measure will no doubt cause significant cash flow pressures for developers who may be required to account for a significant amount of VAT in a single tax period. It is apparent that the withdrawal of the relief measure should have been phased out, as has been the case in other instances where a change in legislation has significantly impacted the cash flow position of vendors. Vendors who will experience significant cash flow pressure in consequence of the withdrawal of section 18B may, however, approach SARS under section 167 of the Tax Administration Act, 2011 (the TAA) to request that the relevant VAT liability be paid in instalments. In this regard, SARS must be satisfied that the “collection activity would be harsh in the particular case and the deferral or instalment agreement is unlikely to prejudice tax collection” before SARS may agree to an instalment payment arrangement. Section 168 of the TAA also has a number of other criteria that SARS must consider before allowing a taxpayer to pay its tax liability in instalments.
The issue that arises is: what is the VAT position should the developer subsequently dispose of the dwelling in respect of which it has made a change in use adjustment under section 18(1) of the VAT Act? SARS previously confirmed (VAT News 14, 14 March 2000) that while the developer must account for output tax when the property is disposed of, the developer “can deduct the VAT declared and paid at the time the units were let”. A similar approach was adopted in an earlier version of the SARS Guide for Fixed Property and Construction (VAT 409 – 2011). The latest VAT 409 Guide (27 September 2016) does not contain a similar dispensation and instead notes (at 7.6), inter alia, that in these circumstances:
“Any subsequent supply of that property after the adjustment date under section 18(1) will not be a taxable supply for VAT purposes. The transaction will instead be subject to transfer duty, subject to any exemptions or exceptions which may apply” (our emphasis).
It is evident that SARS’ view results in double taxation. VAT will have to be accounted for on the market value of the property on 1 January 2018 when the change of use adjustment is required to be made under section 18(1), and transfer duty when subsequently disposed of – on the basis presumably that the subsequent supply of the property does not constitute a taxable “enterprise” supply. The previous dispensation where output VAT was required to be accounted for on disposal of the previously let property, but the VAT paid under the change of use adjustment provisions was deductible, seems to us to be a more equitable approach.
It is arguable that where the developer, a vendor, disposes of property that has been temporarily let, it does so in the course of its enterprise activity notwithstanding the temporary exempt use thereof and the requisite change of use adjustment under section 18(1). As the subsequent supply (disposal of the property) is a wholly taxable supply (the developer had always intended to dispose of the properties in the course of its enterprise), there has been a change in use from wholly exempt to wholly taxable and it is arguable that VAT relief is available under section 16(3)(h) of the VAT Act. Thus, while the developer is required to account for output tax on the full consideration received by the developer on disposal of the relevant residential property, in essence, a deduction is available under section 16(3)(h) on the lesser of the original cost or market value of the property at the time the property is disposed of. This approach avoids a double charge of VAT and seems to us to be the most equitable solution going forward.
The boom of the digital age has opened up many doors to the way we buy and sell property. In the past we used to pop out and pick up the latest copy of the property magazines available, today we switch on the PC or grab our smart phones as online property portals & Facebook has become the new ‘go-to’ for anything, including shopping for your new home from the comfort of your couch.
So selling your own home today should be just as easy right? Not quite… With so many new services out there, how does one know which is the best, most cost effective way to go? Will you opt for acquiring the services of a professional, making use of the latest ‘package’ solutions to come to market, or trying DIY – either or your goal is to get into contact with as many serious buyers as possible.
Craig Hutchison, CEO of Engel & Völkers Southern Africa notes that there is more to selling a home than meets the eye. The decision of how to handle the sale yourself is ultimately yours. However, no matter how digitally savvy or advanced we are, there are a few elements to selling or buying property that one cannot bypass. As with any other service, having a professional, experienced agent at your disposal to take calls, manage paperwork, handle the negotiations and processes and decipher the finer details, to ensure a smooth sale will ultimately save you considerable time and money. This does however come at a fee, and it is important to know what you are paying for.
It is important to know what your options are when it comes to selling, an unprofessional service could end up costing you so much that you lose all your investment gains. “In most cases this is your most valuable asset and not following a professional approach could potentially cost you a significant amount of money” Craig cautioned.
We take a closer look what is required during the sale process…
An eye for detail:
It is not always that easy to remove ourselves out of our situation and to imagine what others would see or want – we can so easily get caught up in our own fixations. We all have a personal idea of our homes and what might need fixing or not before we put it on the market. What we would like or, or more importantly what we don’t want to see when looking for a home. This is a very personal opinion and could be quite costly. If seeing a gourmet kitchen appeals to you – consider that someone else might be more concerned about roof leaks or not mind making the kitchen a DIY project themselves.
Having an outside perspective in terms of needs to be changed or renovated could benefit you with regards to the sale. Agents should know what is critical when inspecting, they know what buyers look at and they are able to validate why some things have been fixed and why the rest hasn’t.
Knowing the market
HomeTimes states that pricing your home according to the listing price of other homes on property search engines in your suburb or street is a bad idea as it might never sell. This is because no two homes are exactly the same, your home is unique. When selling your home, it is not you who will be setting the asking price; it’s the market. Whatever the market is prepared to pay for a home is what it will sell for.
Craig shared an example of a price setting situation with us:
You know that the house two streets down was on the market as you saw the For Sale sign, because humans are inquisitive, you phoned to find out that they wanted R2 million. 3 months later, you see the SOLD sign and decide that at that value, you can also look at moving or upscaling. What you don’t know is that before the For Sale sign went up, they had 2 offers which fell through due to buyers not being able to obtain a bond, and when the contract was eventually signed, they received an offer for R1,6m which they accepted. The property also had a gourmet kitchen which yours doesn’t and the loveliest sun room as it faces just in the right direction. No report that you buy will ever be able to give you this information or insight.
Agents will get a comparative market analysis done, purchase a property and suburb report and more importantly, after considering all factors, including where the suburb is heading, think like a buyer, seller and bank valuator, all at the same time. Ensuring the seller gets the best price, the buyer gets a solid investment for their future and both are guaranteed on a positive outcome as the banks are sure to find the value.
The pitfalls of overpricing:
At any given time there are buyers looking for newly released properties, hence it is vital to price your property correctly from the start. Are you able to determine the market value of your home without overpricing it?
Statistics show that 81% of people will value their home more than what it is worth, the other 19% are sure to be in the real estate field. It is a human trait to attach emotion to things. But this emotion could end up taking your home’s value down even lower than what it should be and here is why:
- Buyers discard the idea of making an offer.
- Overpriced properties stay on the market for far too long, changing a want to sell to a have to sell – causing a reduction in price and a panicked sale.
- Buyers are always looking and if your home was listed at Price A, and after 3 months they still see the same property now listed at much lower – would you not also be inclined to think that if you wait, you could snatch a bargain as they are sure to go even lower, or even attempt to put in a low offer in the hope that they are desperate?
- Where a normal property would sell after 3 months on the market at 98% of the market value, overpriced homes tend to sell after 6 months and at 75% of the market value.
Finding your buyer:
How long did an agent take to sell your last home? Many will say ‘1 day or 1 week or even 1 month’ homes “Easiest money they ever made” is often the words used. But this is never the case. Even though your property sold after a week, a lot happened behind the scenes.
The average time which a property is on the market for, is 3 months, thereafter is starts to appear as stale stock. If your property stays on the market for too long and the buyers monitor it, they might think there is something wrong and will not even bother to set up a viewing
Do you have access to ALL your potential buyers with their needs and to all possible options of properties? Real estate agents spend years building up an extensive database of all potential clients, so that by the time your property is on offer, they already know who is currently looking and are able to match buyers & sellers up quickly.
“Agents devote large amounts of their time to finding future clients and building a reputation. In fact, a large share of real estate sales are successful as the result of the agent contacts that have been built up over many years in the extensive database, all resulting from years spent on activities prior to your home being listed” Craig added.
Time = Money
Agent fees are made up out of time, including driving to appointments, time spent on the phone, meeting prospective buyers, promoting and showing the property and canvassing and distributing marketing material. Consider all the ‘to-do’ items which comes with selling a property, and then sit and do the calculations to determine which service is best for you:
A simplified, quick overview of the process is as follows:
- Research the home’s value & determine the price.
- Conduct an official ‘listing’ process as there are certain legalities you would need to take note of before you go to market.
- Think like a buyer – write the property’s description, take the photos as to make it most appealing, get all the figures together, including the property assessment disclosure.
- Start to plan the adverts & marketing avenues. Real estate does not sell from 1 advert – especially not if you do not have access to your buyers already. Activities include area distribution, word-of-mouth, property portals, social media, printed adverts, distribution material, e-mail marketing, sign boards, networking and more…
- You will need to keep the activities going in order to ensure that you reach all social groups and opportunities which come available.
- Allow time for various calls and answering the questions which a buyer might have before deciding if they wish to view.
- If you have a viewing interest, co-ordinate diaries in order to ensure a buyer can come to view. This will have to be done numerous times, and note that if no screening process is done, you might end up even entertaining the local neighbours who are just curious of what the property looks like.
- Once viewings has been conducted, it is time prepare the contract. Ensure that you have a legal binding agreement, ensuring that there are no loopholes for either parties as one incorrectly phrased clause could cost you hundreds of thousands.
- Even though a buyer might have indicated they wish to put in an offer, there are still negotiations which need to take place. These come in various forms, it can be in terms of value, extras, occupation, s, furniture or even conditions set.
- Once everyone is in agreement and the contract is signed, the buyer needs to obtain a bond with various institutions. If this is not done right, then it could cost the entire sale.
- All securities passed, legal council needs to be obtained to handle the transfer and transaction, documents need to be signed and deposits paid.
- If there are issues, it is back to the negotiation table and if not, it is time to start co-ordinating the occupation.
- After occupation, one needs to also allow for possible problems such as incorrect disclosure of property condition, which if it was not done correctly, will need to be resolved between all parties.
DIY: (Total number of hours spent on all the above) x (your hourly salary rate) + advertising fees
Agent: Based on the industry standard, 7.5% of property sales price
Package option: Flat Rate depending on services obtained + ((time spent conducting own viewings & negotiations) x (your hourly salary rate))
There are many negotiating factors for the agents to handle, aspects such as the listing price, financing, terms, date of occupation and the inclusion or exclusion of repairs, furnishing or equipment. Professionally trained agents are expert negotiators and will always attempt to negotiate the best deal. Negotiating without a professional agent could be costly and result in lost opportunities in a transaction.
In today’s market where qualifying for a bond is not possible for everyone, it is very important that your prospective buyer is pre-qualified. This ensures that each person who enters your home is a qualified buyer and that you are not wasting your time or exposing yourself to time wasted on clients who will not be able to purchase your home.
Buyers can also opt to take their time with obtaining a bond, or deciding not to if they do not get one from their personal bank, which would be their likely first application. This could cost you your sale. You need to ensure that a buyer is assisted and educated, and that this is done as soon as possible so that the sales can be concluded with a quick turn-around.
Do you know what you would need to disclose when clients come to view? It is imperative for sellers to disclose all known defects of their home to their agents before placing their properties on the market. The agents are then obliged to disclose these defects to their potential purchasers. You could run the risk of a law suit if you do not know or alternatively the sale could fall through.
Whether you are buying or selling, it requires disclosure forms, inspection reports, mortgage documents, cancellation instructions, insurance policies, deeds and settlement statements. Having an expert to deal with this, will help you work through these processes quickly and more efficiently. Agents do not only help and ease this process, but can also provide you with valuable information of the area such as schools, zoning and plenty more.
Education and experience
Years ago, selling property was considered a hobby or part-time job, anyone was able to register and start selling. In 2008 the industry underwent rapid change, and being an agent is now a fully-fledged profession. A Real Estate Qualification is required by anyone who sells property as a profession and you must be in possession of a valid FFC issued by the EAAB (Estates Agency Affairs Board) which takes between 2-3 years to complete, so you can be sure you are in good hands.
Agents have years of experience, knowledge and support behind them and without a doubt, know their areas and how to do their job very well. They have already identified any potential problems and solutions with the property in advance and understand the seller’s mind-set, they know the ins and outs and have the expertise, and negotiating skills needed to provide reassurance to the buyers, that they are making the right decision.
Kids need to be taught about the value and appreciation of money from an early age – how to do this and when to do this is often the question. Luckily children learn fast, as they are incredibly inquisitive and even more so when they start to see how to reap the benefits of their hard work and savings.
“Introducing kids to money and how it works should begin at home. We want to avoid sending our youth out into the world without a good working knowledge of how finances function. Preparing them fully for the rigors of investing, credit, mortgages and all the other facets of our day to day living” says Craig Hutchison, CEO Engel & Völkers Southern Africa.
Why kids should know about how to work with money
It’s never too early to help your kids develop good financial habits and teach them to practice smart money management. Teaching children the fundamentals about earning and saving, and how to deal with money from an early age, will be extremely beneficial to them in the long run and is essential for their future financial success in adulthood. Showing children the basics such as how to budget, spend and save will establish good habits for life, the best lessons your children will receive will be from observing you in your daily life.
How can you get your kids to start working towards owning a property from a young age? Bearing in mind that you have taught them how to work with their money and they have a good grasp of how money can work for them, they should already have the basics good financial framework laid down.
If you can manage to get your child to save a sum of money per month starting now, and increase it with a chosen percentage of your choice per year, by the time they reach 21 based on a normal interest rate on savings, they may possibly be able to start climbing the property ladder. This could give them an advantage, to use either as a bond deposit, bond and transfer costs or even their very first rental deposit. “Starting off with a property at such a young age, will mean that they could potentially buy their second home by 25 and grow their portfolio from there” Craig added.
Apart from saving you need to have a realistic talk with your kids, once they are old enough, and actually earning their own income, about the hidden costs of homeownership like taxes, home insurance, and interest on the mortgage, utility payments, maintenance and repairs. With young adults who are still living at home, it’s important to insist on contributions to the household if they haven’t stepped up yet. A good way to do this is ask them to chip in and pay rent and contribute to some of the house bills such as groceries and utilities, so that they can have a sense of what items cost and start working that into their budgets preparing them for homeownership later.
7 things kids really need to know about money
The concept of money: Parents should teach children that money is a helpful tool that makes it easier to get what we need and want, now and later. “Parents can start teaching children about money through play. Allowing children to role-play scenarios where they pretend to purchase something is a wonderful way of letting them learn about the value of money, how much things cost, how money works and the importance of counting. There are a number of toys on the market that help introduce small children to money, such as LeapFrog’s Count Along Register for ages two years and older. Kids learn quickly, so it’s never too early to introduce them to how money works,” says Chiquita Patrizi, spokesperson for Prima Toys.
The value of working for money: It is important that kids learn from a young age that money doesn’t magically appear it must be earned. Discuss the importance of working for money and then give kids appropriate paid jobs in addition to expected household duties. As they get a little older, encourage them to make money outside the home by caring for the neighbor’s pets or washing cars.
The importance of saving and sharing: If kids have money, they’re likely going to want to spend it; they need to be taught by the time they reach school that it’s not OK to spend all of their money at once. Since spending money comes naturally, they also need to learn about saving and sharing.
You can help them learn this by teaching them the 20-10-70 rule:
Save 20% – this will teach them to always pay themselves first.
Give 10% – this teaches them the value of sharing and giving to others who are less fortunate or to causes they care about.
Spend 70% – this teaches them to spend less than they earn, which is the cornerstone of personal finance.
The difference between needs and wants: Teens have a hard time distinguishing true needs from actual wants. For example, clothes are a need, but brand names are a want, food is a need, but fast food or pizza is a want. To help teens learn the difference between the two let them do their own clothes shopping. Determine a shopping budget and create of list of items they need to buy. Give them a gift card that can be used in any store at the mall and let them make the difficult decisions when it comes to limited resources and unlimited options.
How credit works: Just as your kids notice you’re using money to buy things, they’re also likely noticing that you’re paying with plastic. Parents can tell kids that whenever they use a credit card or get a loan, the bank is providing money for the purchase; the bank will send a bill showing how much you owe. If you don’t pay all of it, you will have to pay interest on the remaining balance. That interest can add up over time, so you end up paying more than the actual cost of the item you bought. They should also be taught to spend only what they can afford to pay off each month so they don’t end up in debt and don’t harm their credit score.
The benefits of investing: Between the ages of 8 and 12, parents can introduce the concept of investing to their children. It’s important to teach them the money you make can make even more money, if you invest it wisely. Parents should explain that it requires taking a risk, with the expectation of achieving a return. It’s important to discuss how much risk you should be willing to take when investing. Explain that money invested can grow over time thanks to compound interest, which means that interest is paid on the amount invested plus the interest that grows on that investment. The earlier you start investing, the more time you give your money to grow and the more you’ll have. Parents and children can open an investment account together using some of the kids’ money.
The concept of net worth: When your kids are teenagers, you can start to explain the notion of net worth. In a nutshell, it’s the difference between total assets – what is owned, and liabilities – what is owed. Kids need to understand net worth because it’s a truer measure of financial health. For example, you could earn a lot of money. But if you also owed a lot of money, you could have a negative net worth. In other words, you wouldn’t have financial freedom.
A money teaching guide
How to save (Age 3-6)
- Teach them not to spend money immediately and that it can be kept later for future purchases.
- Use different envelopes for long and short term goals let them draw a picture on the front of the envelopes of what they want. Help them calculate how much to save each week, keep a realistic time frame otherwise they might get frustrated or bored.
Earnings & Spending (Age 5 – 8)
- Have them do different chores in exchange for money.
- Add their earnings to a jar so they can see the money building up over time.
- When they shop let them pay for their item themselves.
Opportunity cost (Age 7 – 11)
- Teach them the benefit or value of something that must be given up to gain something else
- Allow your children to price and sell their own items. This will teach them about setting a value for their items, making decisions, and negotiating prices.
- Give them R50 and ask then to pick 3 R20 items, they would like to buy, ask them to choose 2 items because they can’t afford all 3, explain that sometimes we need to make financial decisions based on the money we have.
Budgeting & Investing (Age 13 – 16+)
- Give them a set amount of money to buy family presents, help them decide on how much to spend on each person, discuss how they can make decisions around choosing items within their budget
- Explain to them that paying for university now can earn them money in the future, show them that different university course have different costs, look at the different earning potentials of the professions to show them how an investment can pay off later.
- Assist your children in opening a cheque account and teach them how to manage/balance their accounts. This will teach your children how to keep an eye on the bigger financial picture.
- Spend time with your children learning how the stock market works, what it is and why people invest in it.
We all want our kids to be financially stable and have a genuine respect for the value of the money they will be earning. Once they understand and see the benefits and rewards it brings it will become part of their lives forever and they will then always respect money and know how to work with it which is the ultimate goal for every parent.
Whether you’re an experienced gardener or not, practical techniques can help to make it much easier than it might seem. Starting can be a daunting task, but the key is to start small in the first year and plant only a few of your favourite flowers/veggies. This will allow you more of a chance of success and a greater feeling of accomplishment. In the years to come, you can increase the size of your garden with each planting season.
A little planning can go a long way toward making a garden you’ll love working in as much as admiring. “Maintaining a care–free garden is a rewarding experience. Planting organic vegetables is becoming more and more popular, with everyone starting to enjoy healthy, fresh vegetables from their own gardens. It is always a good idea to plan according to season changes and adapting to your own climate. Ideal conditions result in healthier plants, fewer pest and disease problems” says Tihara Baker, Relationship Manager of Engel & Völkers Southern Africa. We take a look at some aspects to guide you from being a novice to becoming an expert gardener.
What to plant?
It is lovely to have an array of pretty flowers covering your landscape, however some people say a plant has to earn its place in the garden and be productive in some way. Starting to grow your own vegetables is more cost effective, convenient and most importantly, is of a higher nutrient value.
This doesn’t mean that your vegetable patch must be devoid of any flowers or vice versa. Inter-planting flowers and vegetables play an important role in any organic garden. Flowering plants will protect your vegetables from insects and make them more productive. We habitually grow flowers and vegetables in different beds – why not plant them together? As long as each plant’s individual requirements are met there should not be any problems with mixing them.
Many vegetables are beautiful in their own right and can be added to an established flower bed.
Peas and beans can easily scramble up a fence or wall and herbs can likewise grow amongst the flowers. The best flowers to choose to plant amongst your vegetables are those rich in high-protein pollen that provide sources of nectar throughout the year like Marigold, Daisy or Nasturtiums.
You can have a spirited mixture that is both attractive and functional in any setting. Be patient as you cultivate your relationship with your garden and the earth. Before long, you’ll reap the benefits.
8 Easy flowering plants for beginners
- Sunflowers – easy for kids to grow
- Sweet Peas – the more you pick the more flowers they produce!
- Californian Poppy – need next to no water at all
- Nasturtium -Quick growing and colourful!
- Marigold – These easy and fast growing
- Hardy Geranium – Reliable, low maintenance ground cover
- Fuchsias – Easy to grow patio plants best loved for adding colour to hanging baskets
- Pansy – with their cheery faces, they are easy plants to grow from seed
8 Easy flowering plants for beginners.jpg
Grow a Simple Salad
- Tomatoes – most popular vegetable for any size garden can grow in hanging baskets or containers
- Cucumbers – Cucumbers like sunlight and warm temperatures, as well as support for climbing
- Lettuce – sow additional seeds every two weeks for a continuous harvest
- Spring Onions- Even the tiniest plot or pot will accommodate them
- Radishes – take just 20 days to reach full size!
- Chives – the champions of the herb world. They can handle almost any type of soil
- Carrots – carrots are pretty easy to grow – grow in small gardens and even flower beds
Green Beans – beans prefer full sun and well-drained soil
- Zucchini – grown in containers or in soil. Grow easily from seeds.
- Snap Peas – These quick growers’ pretty much take care of themselves
Know when to plant what
As many gardeners know, understanding when to plant vegetables and what to plant with what, is very important to ensure that they thrive and are healthy. Vegetables differ not only in size, colour, shape, and taste, but in their preferred growing conditions, too. If you are unsure of what to plant when, or with what, take a look at our comprehensive vegetable planting guide.
Mulching improves the soil quality, helps retain moisture and gives your garden a neat appearance – with less weeds. Now’s the ideal time to mulch your beds! “Mulches are best applied from mid- to late spring and autumn, when the soil is moist and warm,” advises Mimi Rupp, a respected garden consultant and founder of Stone etc. in Port Elizabeth.
What to choose
When it comes to mulch you have two choices:
- Biodegradable mulches – leaf mold, garden compost, wood chippings, and well-rotted manure break down gradually to release nutrients and help to improve soil structure. The downside is that mulch will need replacing when the material has fully broken down.
- Non-biodegradable mulches – slate, shingle, pebbles, gravel, stone chipping do not boost soil quality, but they do suppress weeds, conserve moisture and look decorative.
According to Rupp, beds and borders can be mulched entirely, but you need to take care not to smother low growing plants or to pile mulches up against the stems of woody plants.
These are her top tips:
- To be effective, biodegradable mulches need to be between at least 5cm
and 7.5cm thick
- Lay mulches over moist soil, after removing weeds, including their roots
- Single trees and specimen shrubs are best mulched to the radius of the canopy
- There is no need to remove mulches to apply fertilizers. Spread fertilizers over mulches in late winter so they are washed down to roots when it rains
- A buildup of mulch can produce a hard layer, which is difficult for water to penetrate. Avoid this by only replacing the mulch when it has completely rotted away
In order to have healthy plants they need compost, which is decayed organic material.
Garden waste: Grass cuttings are high in nitrogen and leaves are a good source of carbon. You can also add twigs, dead flowers and those weeds that haven’t gone to seed.
Household waste: Egg boxes, egg shells, teabags, coffee grounds, veggie scraps, newspaper and firewood ash.
Don’t use: Cooked or raw meat, dairy products, citrus, animal faeces, diseased or insect-infested plants and plants that have been sprayed with chemicals.
How to compost
Compost bins: Position bins directly on soil/grass as this allows insects, worms and other micro-organisms to access the contents and assist in breaking down the waste. Give it a good mix once a week. After 3–6 months, the contents should start looking like a dark soil similar to garden soil.
Compost heaps: Once you’ve chosen a suitable spot, simply begin a heap, enclose it with bricks, plastic or wooden fencing. Start with small branches and twigs to create ventilation at the bottom of the pile, then add garden and household waste – alternate layers of green (grass clippings, household waste) with brown (dry leaves, twigs, newspaper). After about 6 months, your compost should be dark brown, crumbly and ready to use.
Compost worm farms: These are a great way to turn kitchen waste into organic garden food. Known as vermiculture, the process involves feeding kitchen waste to worms. The worms then reward you with nutrient-rich vermicompost and organic vermitea – by-products of worm castings – which can be used to feed soil and plants. Both are rich in microbes, good bacteria and enzymes.
Fertilisers are another quick, convenient and reliable way to add nutrients to your soil. They are usually in granulated form; liquid form is also available in organic types. Organic fertilisers are more beneficial to the soil as they encourage earthworms and good bacteria thus improving the soil’s structure.
Make your own fertiliser
- Used tea leaves and coffee grounds contain natural nitrogen which helps to promote growth
- Blend kitchen vegetable scraps and egg shells in blender with cup of water, mix into soil around the plant’s base
- Accumulate your banana peels, dry them out in the oven and place in a blender. Mix in 3 – 5 egg shells. Blend into a fine, yet still slightly coarse powder. Apply to the base of your plants like you would a granular fertiliser.
Make it a family event
- Children are natural little gardeners as they are very curious, like to learn by doing, and love to play in the dirt. Kids will experience the satisfaction that comes from caring for something over time, while observing the cycle of life first-hand.
- Having your kids help out with the gardening increases their self-esteem, helps develop a sense of ownership and most importantly helps foster relationships with family by spending fun quality time together. It is said that children who grow their own food are more likely to eat fresh, healthy fruits and vegetables.
- Choose plants which are relatively easy to grow, have short growing seasons and are fun to harvest. Give the kids their own garden beds and tools and engage them through the entire process, from seed to table. Finally remember to show off their work to friends and family this will make them beam with pride.
- Should you kids not be that keen on growing vegetables, give them a secluded corner of soil, perhaps outside a bedroom window. Allow children to let their imaginations flow and create a fairy garden. Screen the space with fragrant shrubs or creepers; bring in a selection of easy-going, pretty flowered plants and moss. Add a gnome or two with free-standing solar lights and watch the magic unfold.
Real estate agents are permanently on the run and we had the privilege to pin down one of the top agents in the Engel & Völkers group. Vere Killassy from Engel & Völkers Broadacres is one of the many top performing agents in the Fourways area of Johannesburg and we managed to get a behind the scenes look into who he really is.
Vere owned his own IT Finance company for 17 years and has been part of the real estate industry in Jukskei Park for almost 7 years now, of which the past 2 has been as part of the E&V family. His career path had to change when he was granted full custody of his 2 daughters, Teighan 19 and Natasha 15, and he knew he now needed to be there for his girls as both dad and mom. With him being office bound from 7am to 7pm, he decided he needed a new vocation that allowed him to be flexible and have more time at home. Vere sold his company lock stock and barrel and moved into the real estate industry, which gave him the same earning capacity but with more flexible hours. Vere initially joined another brand and although he was successful, the franchise was sold to another entity and this gave him the opportunity to assess the market to see if he could further his success. He decided to join the Engel & Völkers brand as they answered all his questions and ambitions.
“A great deal of a successful agent’s time, money and personal effort goes into marketing their expertise and qualities to the public to build a client base. Once they have done a great job for the clients, repeat business and referrals will follow. The real estate profession changes every day, but the qualities you find in your top-performing agents do not” says Craig Hutchison CEO of Engel & Völkers Southern Africa.
On a more personal note, Vere recently got married to a wonderful woman, Siobhan, this past December. She also has 2 kids, Doug aged 20 and Tabitha 19. They now have a full house and Vere says he would not have it any other way. He is passionate about his family and all his kids. The family does extend even further as they also share their home with 6 cats, 4 dogs and 54 tropical fish – we think we can safely say that you need to be able to be on top of your game in his house. When asked about his hobbies and what he does to relax Vere answers “Work, work and more work. Family and activities are also work that keeps you busy so the term relaxing …What is that?”
We got to do a quick Q&A to gain some more insight into Vere’s life:
Which areas do you work in?
Residential properties in both full and sectional titles within the Jukskei Park, Olivewood Estate and Waterford Estate areas of Fourways.
What are your top three secrets to success?
You need to do the basics, don’t give up and work hard.
What made you join the E&V group?
Upon meeting with the CEO of Engel & Völkers Southern Africa, I knew it would be the perfect fit. I felt at home from the moment I walked through the doors, and in the interview, they answered all my questions and I respected their openness and honesty. It truly is a great brand and a great group, almost like a true work-family. Which is why we always refer to the E&V family.
Can you remember how many properties you have sold? How many?
356 properties to date – One never forgets a sale or rather me personally – as I remember each of my clients and each of the properties I sold.
Please tell us about your accolades / achievements since joining the E&V group in 2015
I settled in with the brand quite quickly upon joining them. Only 2 months after starting, I was already ranking on their monthly, National top achievers programme, which I have managed to achieve 20 times since then, as well as platinum status for 2 quarters. Other accolades at our annual Rewards function includes:
- 2nd Place Agent of the Year – Bond Origination 2015
- 1st Place Agent of the Year – Gauteng 2016
- 1st Place Agent of the Year – Bond Origination 2016
- 2nd Place Agent of the Year – Top Preforming Agent of the Year 2016
- 3rd Place Agent of the Year – Most Exclusive Mandates 2016
- 2nd Place Agent of the Year – Most Units Sold 2016
- Brand Ambassador Nomination for the Year 2016
Which part of the property industry do you enjoy most?
I love people, I love interacting with them and love properties.
What is the most vital business tool that estate agents should have at their disposal in today’s market and why?
Knowledge, know what you are talking about, speak the truth and always give the full picture. Knowledge is POWER!
Do you remember the first property you sold? Please tell us about it.
My first deal was 19 Peridot Street, an abandoned home, I had to search for the owner in Germany and then through social media tracked him down and then sold his home. My first sale September 2010 for R1,2 million and I have sold the property again since then in 2015 for R2,8 million.
What do you find to be the most enjoyable and the most challenging aspects of the job?
The most enjoyable is definitely closing the deal and signing the offer – the rush is unexplainable. On the opposite end, the most challenging is definitely cold calling – it takes a lot of perseverance not to get despondent when clients are irritated with the caller.
What characteristics, in your opinion, make for a great estate agent/broker and why?
Agents need to be hard headed, tough skinned, tenacious, hard workers, and a people person and have the ability to talk.
Please tell us a bit about your best listing currently on your books.
Currently my best listing is ENV99529 if you wish to have a peek. A stunning home where you will want to invite your friends or family over to enjoy their company while sitting at the covered patio overlooking the pool and garden. Or those special moments with your loved one, sipping champagne and looking up at the stars above. It is 529m2 of living space, and 1250m2 of land for R2,4 million.
What is your personal goal to achieve in turnover for the financial year? / What are some of your career goals?
I would like to do 50 million in sales this year, finish 1st in the country overall and get my market share up from 28% to 35%.
What advice would you give to new kids on the block about making a success in their career in property?
Do the basics, work hard, put in the hours and don’t spend your money when you get a pay-out. Learn to manage your money, learn from a top achiever, follow them and learn from them.
On the lighter side:
You’ve been given an elephant. You can’t give it away or sell it. What would you do with the elephant?
Train the elephant to do party tricks and rent it out on a party basis.
How would you convince someone to do something they didn’t want to do?
Prove to them that they can’t live without it, show all the pros and cons of having it, make them want it and make them need it.
Describe the colour yellow to somebody who is blind.
Imagine the sun beating down on you; you are lying on the beach with the waves breaking over your feet. You look up at the sun, the heat burning through your eyelids, that warm glow that you feel burning into your brain – now that is YELLOW.
A penguin walks through that door right now wearing a sombrero. What does he say and why is he here?
Is this Mexico, someone told me you had Tequila.