With the year quickly coming to an end and the December holidays looming around the corner, most of us have probably already planned or at least thought about your well-deserved break. Unfortunately, before you can start packing those bags, there are a number of important things to consider and plenty of planning to be done, such as who will take care of your home, water the plants and most importantly take care of your pets.
Hiring a house sitter when there are no family or friends around to take care of your property and pets, has become a very popular and sought-after option, not only is it is cost-effective, but it gives you peace of mind that your home, garden and cherished pets are well looked after in your absence.
Most home owners make use of house sitters for 2 main reasons. Firstly, to put the comfort of their pets first and in so doing help avoid the stress and expense of kennels and catteries, and secondly for security purposes, to help ensure that their property is safe, making sure that everything runs smoothly just as if they were at home. “Security is a top priority, leaving your property unoccupied for any length of time is risky as your home is far more likely to be burgled” cautioned Craig Hutchison, Engel & Völkers Southern Africa.
“It is advisable to contact your insurance service provider and your security company, to review your cover before you leave on holiday, to guarantee you are covered while away and to let them know you have a house sitter staying on the premises for that period of time. Some insurers require that the policy holder notify them if they going to leave their house unoccupied for 60 days or more. This is viewed as a change in risk and insurers may apply an additional premium for the period that the home is unoccupied” Craig continued.
Pets: Leaving your pet in a kennel/cattery can become quite costly and may expose them to unwanted ailments such as kennel cough. The stress-free environment house sitters provide to your pets – is by far the biggest bonus of having a pet sitter. Animals thrive on routine and get disruptive when their daily pattern of walks, playtime, and treats get thrown out of the window. A sitter will provide the same quantity of love and affection your pet is used to at a fraction of the cost. They are much happier in the familiarity of their own home and respond much better to a new carer than a new environment. You can enjoy your holiday with peace of mind that your pets are in good hands and can return home to calm and contented animals.
Security: A house sitter will there to provide the daily routines of the house namely, taking out the garbage, collecting post, turning lights on and being there to supervise and pay the gardener. Numerous home owners occasionally depend on neighbours, friends or relatives to keep an eye on their uninhabited property while they are away, however at times home security can still be compromised if a house is left empty. House sitters provide a visible presence and act as a 24-hour deterrent against burglars who watch and prey on activity-free homes. An un-mown lawn and a pile of rain-soaked newspapers, is only going to encourage the wrong kind of visitor to your home.
Maintenance: Depending on the duration of your holiday, this is not something that can be put on hold when you are away. Without regular maintenance your lawn and plants can die or suffer severe damage, so much so that reviving them could also come at a high cost. The largest cost saving may be related to emergency maintenance. House sitters are there to see the breakages before they become total failures, this may be spotting a leak or a burst pipe, broken fridge/freezer or geyser problems. They will be on hand to organise repairs in the event of a minor or major emergency, possibly saving you a lot of money.
Choosing the right person for the job
When recruiting a house sitter make sure that it’s through recommendations from friends or from a reputable company offering professional services which will include in-depth screening and verification. Some companies who offer these services include The Pet Sitters and Hire a House Sitter. Take your time and ensure you have investigated all options and do your research about the person and organization. It is extremely important to end up choosing the right person for what you require as you need to completely trust this person and be happy with your choice, else you will not enjoy your holiday.
Most will assume the responsibilities such as performing general maintenance and making sure that everything runs smoothly, but you might have some special requirements such as ensuring the person is ‘pet friendly’ and even more importantly that your pets feel comfortable with the specific individual.
What services will they offer me?
It is always good to ensure give them a checklist of what you require your sitter to do. This will ensure they are informed beforehand and can ensure they cater to your specific requirements. Here are some suggestions of items to include:
In & around the home:
- Perimeter checks
- Arming of alarm
- Electricity checks, fridge, freezer, geyser, pool etc.
- Collecting of post and papers
- Opening closing curtains, blinds etc.
- Putting lights on and off
- Watering of plants, in and outdoors
- Back wash pool and add chemicals
- Putting trash bin in and out
- Send daily SMS feedback
For your pet:
- Provide fresh food, water and treats daily
- Administer medicines, vitamins, or any other special needs
- Head to tail health check
- General petting, playing or letting out pets
- Indoor and outdoor clean-up of pet accidents
- Daily SMS feedback with photo
What are the costs involved?
There are various options available, either overnight services or daily visits depending on your needs. Overnight services include actually living in your home whereas daily visits either once or twice a day just to stop by and check that everything is order. If you have pets, you might prefer them checking in twice a day or even staying overnight in order to give some extra TLC. Though there are many private individuals and many other companies, we have a look at the two mentioned above to gain some more insight into the options available:
- Hire a House Sitter offers overnight services ranging between R210 to R290 per night off season and R270 – R360 per night peak season. The more days you book, the lower the cost per night.
- Pet Sitter offers daily visits from about R89 (1 visit per day) to R150 per day (2 visits per day) and offers you the choice between House Sitting or Pet Sitting.
Whether you prefer to stay informed of any issues that may affect your animals or property, or opt for a complete shutdown of information, you will be able to go on holiday knowing that someone is there keeping an eye on things, and to send you the occasional picture of Max or Sokkies for additional peace of mind. House sitters should definitely be a consideration for your next holiday.
Many people grow up having conflicting values around money and wealth and misunderstanding how they work together. Often a person may say they want to be wealthy, but what they really want is financial freedom. It is of crucial importance to manage your money effectively, master it, and instruct it to do what you want it to do for you. You’ll start seeing how your money can work for you when your future needs become more important than your current wants.
Money is what makes the world go round. Just like you have a job, your money has a job too, and it should work just as hard for you, as you have worked to earn it. Whether you’re a stay at home parent taking care of your home and family or a professional working crazy hours, having money in the bank is essential.
All is possible through either investing or saving part of your hard earned cash every month. There is a clear difference between investing and saving. Saving is storing your money, while investing is growing your money. One of the significant differences between the wealthy and not so wealthy is that wealthy individuals earn interest while everyone else pays interest.
“The way that the prosperous continue to build their wealth isn’t really a secret; they spend less than they earn, save the difference, and let the potential of compound interest make their riches grow. Financial wellbeing is a long-term commitment, but with the right guidance, discipline and savvy decision-making, you may achieve your goal sooner than you think. It is never too late to start investing in your financial well-being.” states Craig Hutchison, CEO Engel & Völkers Southern Africa.
Here are some pointers on getting your money to start working for you:
Get Out of Debt
Your money doesn’t really belong to you until you’ve paid off your debt. This includes all debt, even if it is good debt. Your extra cash is better spent towards growing your net worth before anything else.
It may seem like a problem that is too big to tackle. The trick is to start by just clearing up your smaller debts and then work towards tackling the larger debt with the extra money that you have available.
Take a moment and just do a quick calculation on the interest you pay monthly just on interest – imagine having those additional funds each month. As you pay off more debt, and then apply that money to the next debt, you begin to build momentum and you will be surprised how quickly you be debt-free.
Have a budget
Your budget is the best tool you have to give you control over your finances, this will allow you to make financial decisions at the beginning of the each month by telling your money where to go instead of later wondering where it went. Always pay yourself first – make sure putting a little away for the future is your number one objective.
Once you have mastered budgeting, you will be able to reach your financial goals more quickly and avoid debt. Now that you have a flowing stream of savings coming your way, you are ready to put it to work. The next step would be to choose a vehicle for growth that suits your lifestyle and your long- and short-term goals. Consulting a financial planner can help you find the right fit.
Grow your wealth
You don’t have to be extremely wealthy to take advantage of investing over time, you might not be able to stop working and just live off your dividends any time soon, but the rewards will pay off in the future. It is important to remember to diversify your portfolio; you should never want to have all of your money invested in a single spot, venture or business.
“Be careful who you trust with your money, make sure you invest your money with a reliable and established company with a solid history and reputation, do your research and do not be afraid to ask questions” Craig advised.
Popular investment options:
The key to retirement is to start investing as soon as you can. Your retirement savings are dependent as much on your ability to be patient and to leave your nest egg alone, as it is on the contributions you make every month. Make sure you have a good financial planner to help you invest your money.
- Income tax benefits
- Possible employer matching your monthly contribution
- Loans in the event of an emergency or financial crisis
- Most plans have limited flexibility as it relates to quality investment options
- Fees can be high
- There can be early withdrawal penalties
A unit trust pools money from many investors, to invest in assets namely shares, bonds or property. Instead of having to select individual investments yourself in hard to reach markets, a unit trust offers you exposure to a range of assets, which are selected and managed by investment professionals. Unit Trust is a smart way to save and beat inflation. As the cost of living increases, you need your money to increase with inflation, investing in a unit trust allows your money to do just that.
- Funds are managed by experts
- Stockbroker fees may be negotiated at a lower rate
- Easy diversification – investing in a variety of securities
- There are costs over and above those you’d pay if you were investing directly
- Unit trusts may not be as liquid as some other investments
- Reliance on managers to select the best appropriate funds
The first step is to gain a good understanding of what the Johannesburg Stock Exchange (JSE) is all about. Speak to a stockbroker about your investment goals. The JSE has a variety of products which can help you reach your desired goals. One of these is a tax-free savings account (TFSA). A TFSA is an account that provides tax benefits for investing, and the JSE TFSA provides investors with a way to invest in Exchange Traded Funds (ETFs). ETFs are ideal for first-time investors exploring the stock market.
- Highest returns
- Income from dividends
- Stocks are highly liquid
- Volatile in the short term
- If you pick the wrong stock, you risk losing the value of your investment
- It takes knowledge and time to analyse a stock
This is a book-based savings account made up of a group of individuals with similar goals, which allow them to save for a common purpose. Members contribute fixed sums of money to a central fund on a weekly, fortnightly or monthly basis with a better return on savings and interest rates. The group then decides on how that money is shared, whether it is a monthly pay-out, or invested and then shared at the end of the year. Originally these were informal savings agreements, but it has evolved and banks are now offering savings products specifically designed for Stokvels.
- Can be set up informally as they are not legal entities
- The costs of running a stokvel are quite low
- Individuals who are part of a stokvel can perform its activities outside of interference from the government
- Enterprises obtain a lack of cost advantages due to the size of operation
- The prospect for growth is limited
- High Risk – The scheme is based on trust
A share is one of the equal parts into which a company’s capital is divided, entitling the holder to a proportion of the profits, if any are declared, in the form of dividends. You don’t need thousands of Rands to start investing in shares. Imagine you want to invest in a company worth a R100 000, but you don’t have R100 000 to buy it, or the owners don’t want to sell all of the company. Buying shares is exactly what it says, you buy a share of the company.
- Potential capital gains from owning an asset that can grow in value over time
- Potential income from dividends on share holdings
- Lower tax rates on long-term capital gains
- Share prices for a company can fall dramatically
- If the company goes broke, you are the last in line to be paid, so you may not get your money back
- The value of your shares will go up and down from month to month and the dividend may vary
Kruger Rands or Gold
Another option to diversify your portfolio is to invest in something even more solid such as Kruger Rands. These gold coins tend to perform well in highly uncertain circumstances, and can provide protection against extreme market turmoil.
Bitcoin is an online payment system. This system is peer-to-peer, and users can transact directly with each other all over the world almost instantly, without needing an intermediary such as a bank, Western Union, Moneygram, Paypal or any other company. The Bitcoin system works without a central repository or single administrator, so is the world’s first decentralized digital currency, and it is the largest of its kind in terms of total market value.
Bitcoin cash was created to give people a way to send and receive real money anytime, anywhere, without the intervention of banks and governments. Bitcoin cash has value because the holders of the Bitcoin core collectively agree that it has value. Such mutual agreement between thousands of buyers and sellers around the world enable Bitcoin cash to be used as medium of exchange in online transactions.
- Not tied to any traditional financial institution or government
- Traders can remain anonymous
- Access to historically inaccessible markets
- Inherently volatile
- Subject to fluctuations in value that can be more sudden than government-backed currency
- Not backed by legal protections
Investing in property is often seen as the safer and less volatile choice as it requires a long-term approach. Although with any investment, you do run a risk such as a market or area dip or interest rate hike, this remains one of the best investment options as people will always need to have a home and no matter how big the dip – you won’t lose everything completely – the home is still there and it’s yours.
There are various options to consider, namely buying a single home to live in as your investment, or investing beyond your home, in land to sell, commercial property or homes to rent out. Real estate is a favourable investment option because it does not only give you long term growth, but it can be paid up completely and become your sole property whilst still generating an ongoing income if you choose to rent it out.
“Having personally invested in a number of the above options, I can with confidence say that property has been a solid investment. You only need to think about what you paid for your first home if you have been in the property market over an extended period of time or alternatively ask your parents what they paid for their first home. I always say that you should get your home valued at least every 5 years so that you know what your investment is doing for you. Property truly gives you the best of all worlds as you get to enjoy it while living there, enjoy rental income if you choose to let, the satisfaction knowing it’s yours, and only yours once paid off, and of course the reward of knowing you have something to leave behind for your children someday” Craig added.
- You could earn monthly rental income if the property is rented out
- If your property increases in value, you will benefit from a capital gain when you sell
- Property is less volatile than shares or other investments
- There may be times when you have to cover the costs yourself if you do not have a tenant or for repairs
- A rise in interest rates will mean higher repayments and lower disposable income
It is crucial to realise that money is a tool that can help you achieve your ultimate goals in order for you to reach true financial independence.
Living in the Southern Hemisphere goes hand in hand with hot summer temperatures. Air conditioners in all homes will be cranked up to maximum speed to keep families cool, providing welcome relief from the sweltering heat. Not too long ago, having an air conditioner in your home was a luxury only accessed by the elite; nowadays almost all households have a system.
The cost of air conditioning units have come down considerably, making the technology accessible to the average Joe, and it comes with some great benefits. The air being pushed through the ducts is filtered therefore improving the air quality of your home, which means fewer allergy-causing bacteria, and the added security which comes with not having to leave windows and doors open to cool a room.
“It is very easy to jump and quickly have an aircon installed when we are boiling hot in the summer months – we have all made expensive mistakes in times of un-comfort. I do believe that knowledge is power, so ensure that you stay updated with everything property. The market, home finishes and technology available, even décor trends. This will guarantee that you can make an informed, educated decisions in the spur of the moment, and not sit with a very expensive, unattractive wall decorations” Craig added.
Buying an air conditioning unit should be researched carefully. Start with your own requirements such as the space to be cooled, where the unit will be located, and then pair this up with the models available taking into consideration budget, installation, maintenance costs, and most of all increased energy bills ” says Craig Hutchison, CEO Engel & Völkers Southern Africa.
If you are in the market for an air conditioner or simply wish to gain some ‘power’ for future reference, then this is where to start…
Measure & determine your size:
You will need to measure the space that needs to be cooled. If you have a large home with many rooms, it’s possible more than one air conditioning system will need to be used to sufficiently cool every room effectively. While split air conditioner units could be cheaper alternative compared to a central air system, they also have limits on how far the air will reach.
- If your unit is too large for the area that you need cooled, it will turn on quickly, cool the room rapidly and then shut off. Heat will soon sneak in to your house and it will have to turn on again to re-start the cooling process.
- The constant on-off cycle will defeat the purpose of its energy efficient design.
- A too big unit will also not run long enough to dehumidify the air, resulting in a “clammy” feeling.
- Oversize can also reduce air quality and aggravate allergies.
- You will end up spending more on electricity without much benefit as your level of comfort will not be optimal.
- If your unit is too small, it will run constantly and spend most of the day trying to cool your home. Without the power to cool it rapidly; it will run constantly and increase your electric bill.
A basic rule of thumb is 220BTU (British Thermal Units) per square meter of the room. Other factors such as ceiling height, size and location of windows and doors may cause a need for more cooling power. If we keep to optimal conditions, then an 8000BTU can cool up to 36m2 , 9000BTU = 54m2 etc.
Decide on the position & select a type:
- Central air or ducted systems are the most energy efficient type of air conditioners; they maintain a consistently cool temperature throughout the home, are silent, and offer the best smart home cooling automation solution. As the aesthetics of the system is important – the best solutions are always ducted as all units can be hidden and noise levels are lower than decorative or exposed units.
- A split air conditioning system perfect for cooling just a room. This system is unobtrusive and silent as the unit sits in your room and the compressor that makes the noise is installed on the outside wall near the room. No major installation or ductwork is required.
- Portable aircon units are mobile and can be moved around to any room in the home. These units are becoming increasingly popular especially among individuals who live in rented flats and apartments. Portable aircon units are comparatively cheaper and easy to maintain.
- Ductless air conditioner is a great option for enclosed spaces as there is no need for pipes connecting to a box outside the window. The ductless mini split air-cons also have the same components as the split air conditioning systems. The installation of these units is easy and they also have a near-silent operation with high reliability, demanding less maintenance and replacement of components over its operating lifespan.
Turn to the calculator & think of cost
Byron Baty from SA Heating & Cooling advises clients to look for the energy ratings to assess what system is best for them. “Selecting on brand is often a common mistake. Don’t assume that because you are buying a consumer brand that you are purchasing a good, efficient, air conditioning system, good quality units use less electricity” he added.
- Be aware when choosing a portable air conditioner which is less expensive due to its smaller nature and cooling abilities that it might not always be what you need for the space you’re trying to cool.
- Large homes will benefit more from having either a central air conditioning unit installed or alternatively a unit in each room, although the initial upfront cost can be expensive, you’ll save on cooling costs down the road.
- You should not only look at the unit cost, but also the electricity consumption, as in the long run you might end up spending more in a few months on electricity, than you would have simply buying a better unit upfront.
- Energy consumption and running costs must be assessed; vast differences exist between a systems electrical usage – as much as 40% in many cases.
- Purchase only class B or above preferably class A+ or A++ rated units.
- Buy units with real clock timers
- Insulate your house if you are undertaking a new build to avoid energy losses.
Read up about the technology:
The Inverter technology (DC) is the latest evolution of technology concerning the electro motors of the compressors. An Inverter is used to control the speed of the compressor motor, so as to continuously regulate the temperature. The DC Inverter units have a variable-frequency drive that comprises an adjustable electrical inverter to control the speed of the electromotor, which means the compressor and the cooling / heating output. The drive converts the incoming AC current to DC and then through a modulation in an electrical inverter produces current of desired frequency. A microcontroller can sample each ambient air temperature and adjust accordingly the speed of the compressor.
The inverter air conditioning units have increased efficiency in comparison to traditional air conditioners, extended life of their parts and the sharp fluctuations in the load are eliminated. This makes the inverter AC units quieter, with lower operating cost and with less break downs. The inverter AC units might be more expensive than the constant speed air conditioners, but this is balanced by lower energy bills. The payback time is approximately two years depending on the usage.
Choose your functions:
Now you should have an idea of the type of aircon you require and you can start comparing the ‘feel-good’ aspects between the brands to pinpoint the winner. Air-conditioners can vary greatly when it comes to additional functionality. Here are some options to look out for:
- Energy – saver switch: Normally, an air conditioner’s fan runs constantly, even when the compressor is turned off. But with an energy-saving switch, the fans turn off when the thermostat turns off the compressor, saving you money.
- Humidity: most systems come with the ability to keep rooms ‘dry’ so that humidity can be reduced without a room becoming over-cool. Lowering the humidity level will decrease the growth of dust mites and mould.
- Fan only function: The fan mode is more economical, since the unit does not run with the compressor on. Without the compressor you only get the same cooling effect delivered by a regular electric fan.
- Heat: many modern AC systems not only provide the ability to cool but to heat too, ideal for winter months.
- “Check filter” light: A visual reminder to clean or change the filter.
- Oscillating vents: An internal motor that automatically sweeps the unit’s air flow from side to side, cooling the room more evenly.
- Remote control: This handy option lets you adjust the temp from anywhere in the room. Great for increasing the temperature/thermostat in the middle of the night when your body temperature drops.
- Sleep mode: Slightly raises the room’s temperature setting at night to avoid night time chills.
- Timer: Automatically turns the unit on or off at a predetermined time when you’re not there, letting a room cool down or heat up before you enter.
- Ventilation/exhaust: Lets fresh air from outside circulate into the room.
- Manufacturer’s warranty: Generally ranges from one to two years for parts and labour.
This should equip you with the basic knowledge to know what type of Aircon you would require – so bring on Summer…
Engel & Völkers prides itself in producing some of the best agents the industry has to offer. Their In-House Training Academy offers various courses for agents, management and support staff and is bench-marked on international standards. “Our goal is for our agents to become successful through our training programmes. New agents opt in favour of joining Engel & Völkers due to our intensive training and then ultimately remaining with Engel & Völkers as a result of the standard of our training” states Craig Hutchison, CEO of Engel & Völkers Southern Africa.
We had the opportunity to take a look behind the scenes and meet the head of the training academy and qualified trainer, Lara Machado-Spronk to find out a bit more about who sits at the helm of the In-House Training Academy.
Lara was born in Mpumalanga, and then relocated to Bethlehem where she spent most of her childhood. She is the youngest of 3 girls, with Bianca being the middle child and Tania who is the oldest. In 1996 her journey began when they moved to Johannesburg, she matriculated in 2002 from Sunward Park High School and if asked, Lara will passionately express her love for the big city and given the chance, she would love to one day own a loft apartment in New York. With school out of the way, she decided to jump straight into her studies by studying a diploma in Press and Broadcast Journalism which included PR, Radio, TV Presentation and Media Law from Damelin and graduated in 2004.
Throughout her schooling career and her studies, Lara also focused on her dancing, which has been a passion of hers since she was 5 years old. She was a dance teacher for over 5 years. “I was very fortunate to have the opportunity to pursue my passion in life, but I have always wanted a corporate career and after graduating in 2004 this was my target” Lara shared. Being the dynamic person she is, she picked up the yellow pages and called various events & exhibition companies in search of a job – and of course, she succeeded, although it did take admirable determination as she only landed her first interview on her 73rd call. “What can I say, I was born for the career I have today as I have always been a big fan of cold calling”.
The interview was a roaring success and she joined an exhibitions and events company which then took a turn to construction with her completing her qualifications in Project Management & HR. She ended up living in the Middle East for just over a year where she learned a lot about culture, business, and also managed to fit in a bit of travelling in between. Upon her return to SA and catching up with some friends on Facebook, she came across an advertisement for a career in real estate and so her journey with Engel & Völkers began.
We sit down with Lara and delve a bit deeper:
Who is Lara when she is not training or travelling around the country?
Lara is a very happily married woman with her husband Ryan always by her side, encouraging or motivating her after those tough days. They live in the Beverley area of Johannesburg and are the proud parents of two 4 legged children, Soup and Pooky – who Lara says definitely run the house.
Given the chance, she enjoys hiking and some arts and crafts to give her mind some much needed rest. “Nothing better than getting out in nature and taking walks exploring rivers and mountains. I am currently training to do the Otter Trail next year, and hopefully soon get to do a few overseas hikes. If I can’t get out into nature, you will find me on my patio with a good book and a cup of coffee enjoying my weekend. My life is filled with 7 nephews and nieces, so any time I get to spend with them is treasured”.
Tell us about your experience
My first professional job was working for a company that specialised in events and exhibitions. We ran events for South African government officials as well as sold expo stands to our target market of ambassadorial teams from the United Arab Emirates including Saudi Arabia, Kuwait and Dubai to showcase what their country could offer South Africa and vice versa. The company then progressed to project management where we headed up projects on construction sites including ambassadorial homes in Waterkloof, mosques in Killarney and various other projects in the Middle East.
I then took a leap of faith and responded to a Facebook advert for a Team Assistant position at the Broadacres office, where I was later promoted to Office Manager and Team Leader for both the Broadacres and Bryanston shops. I assisted agents and the shops to sell properties for just over 2 years. I was approached by MLP SA to move over as the Team Assistant and Systems Trainer, I did this for just over 2 years and then started heading up the SA Training Academy where I was privileged enough to be trained by one of the top trainers in Hamburg, to be recognised as an International Sales and Operational Trainer for Engel & Völkers. My focus is to provide hands-on training and support for LIPA’s, managers and agents on the day to day functions in a sales environment.
What is your ultimate goal in life?
Professionally, I would like to own an E&V franchise and personally, to own a few loft apartments in New York City and build a property portfolio there. I would also like to once a year, explore a city or country that I have yet to see.
What do you think makes a successful agent?
Understanding that this career is not an 8 – 5 job. This job requires you to become the job. You need to live, breathe; sleep real estate and you need to enjoy the process. It has serious ups and downs and you need to roll with the punches. You need a strong sense of integrity, drive, passion and be able to work well with the most difficult of clients. It is not rocket science, it just takes a personality that enjoys consistency, reliability and an urge to learn that make the most successful agents.
What is your most memorable training session?
As a trainer, it is very difficult for me to choose one session that I hosted as my most memorable, as each session brings out various moments of connection between individuals that are either complete opposites or like-minded. However, my most memorable training session was the one where I was trained, by E&V and Pawlik consultants in Hamburg. They taught me that to train is not to teach, but to give the tools to the delegates to teach themselves.
What do you love most about training?
The fact that I get to motivate people that have taken a leap of faith by leaving a permanent job with a salary, to become commission earners and giving them the tools to assist them in becoming successful. The most rewarding part of training is after training when the agents contact me about their first mandate, showday, listing, and enquiry and offer to purchase. That is why I do this – to see other people succeed at something that they were nervous about.
Tell us a bit about the In-House Training Academy / what your training comprises of?
The In-House Training Academy is divided into 3 sections:
- LIPA and management training
2. RtS! for Agents
- RtA! for Team Assistants
I am very fortunate to have Elfie van der Westhuizen focusing on and managing the RtA! (Ready to Assist) training for all the Team Assistants around the country. Her dedication, attention to detail and focus really has made a serious improvement in the skills of the Team Assistants across the country. The RtA! content focuses on the on-boarding plans of Agents joining our brand, HR, marketing of properties for agents, agent management and support roles as well as the day to day functioning of an E&V office.
The RtS! (Ready to Sell) is run by myself for all the agents across the country and the main focus of this 4 day course is to introduce the agents to E&V, the tools they have, to create business plans and marketing plans, the sales process, customer relationship and management as well as creating a long-lasting career. We also spend a lot of time on self-development with relation to sales competencies as well as developing personal plans to strengthen any areas that may need it.
We run workshops countrywide covering topics from OTP to mandates to after sales to marketing and tools. The LIPA and management training workshop is focused on running your shop and agents according to the E&V systems and procedures. These hands on workshops guide and educate the LIPA’s and managers on what is available, how to use it and how to execute it in their shops. Our Sales Director, Wendy Williams and I work on the content together so that we ensure we cover all topics that the shops may need.
Why do you think training is important for agents?
It is important that the agents have a foundation upon which to build a successful career. Whether they are completely new to the industry, or experienced agents, training allows the groups to learn from each other, build networking relationships among themselves from across the provinces, as well as give them a clear guide on what is expected from them and this career and the potential that they can achieve. The E&V training for agents allows the agent hands-on experiences in a practical manner that gives them the tools they need to either go out for the first time agents or enhance and refine their skills for the experienced agents.
Tips for people who are not yet in the industry, and want to make a career move to becoming an agent?
Firstly, ensure that you have financial backing or savings to carry you through to your first sale registering. Sales can take anywhere between 2 – 4 months to register and in the beginning the agent needs to have financial peace of mind. Secondly, understand that this is not a part-time job. This job requires you to become the job. You need to eat, breathe and sleep real estate in order to become top of mind. Lastly, what better job to have, than one where you write your own pay check? Consistent hard work will provide the agent with financial freedom.
Be sure to join a real estate company that provides you as a new agent the right tools, be it marketing, support or management tools in order to succeed. The E&V way is designed that if our agents follow the system they will be successful.
What qualities and attributes do you think makes for a successful agent?
Local knowledge, or the willingness to gain local knowledge; if an agent works an area that is manageable in terms of size and transfers happening, their knowledge will increase and become a great asset for future sales. Having a tendency to pay attention to details; in this industry, the smallest of details could make or break a deal. Tenacious – clients want to work with an individual that never gives up and always has the energy to carry on. Honesty and reliability – you are dealing with probably the most expensive asset a client owns. Having traits such as honesty and reliability as an agent is what generates positive word of mouth advertising to future clients. Lastly hardworking – what you put in is what you get out. It is that simple.
Give us some insights on the property market at the moment from the agents’ perspectives that you’ve trained recently
We are still very much in a buyers’ market with sellers holding their ground in terms of prices that they want to achieve. Unfortunately this makes the seller overprice their properties and in turn makes the buyers offer an amount that is way below the value. Agents are currently emphasizing information and market reports to both buyers and sellers so that they can meet in the middle. The market at the moment is all about being top of mind so maintaining the activities of agents is very important. If an agent is managing their farming area correctly and consistently, they become top of mind to current sellers as well as future sellers that will be going on the market.
Do you have any buyer/seller advice?
Always work with a reputable agency and agent. I encourage sellers to sign exclusive mandates with one agency, so that they are not seen as desperate sellers. The agency will spend money on marketing their property exclusively to the market. Agents are achieving closer to asking price on exclusive mandates versus open as they push the buyers to put in higher offers, as well as negotiate with the seller’s interests in mind. From a security point of view, you deal with one agency that has access to your property and brings qualified clients through to your home. More agents do not equal more buyers. When buyers are shopping and they see a property listed by more than one agency, they immediately think it is a desperate sale. To add insult to injury, some open mandated listings are priced differently by all the various agents and this creates an even poorer image in the buyers mind. For buyers my advice is always become qualified before you go shopping. Our E&V Finance department will assist all our clients with per-qualifications to see what you can afford and once an offer is signed, they approach all the banks to get the client the best offer.
Not only does the In-House Training Academy provide the various courses and workshops to assist new or experienced agents, we also do many shop visits across the country throughout the year to motivate and coach all agents in anything that they need. We also encourage agents to do refresher courses with the academy so that they keep up to date with any changes that they need to be aware of. The In-House Training Academy is not just a training facility it is a hands-on coaching department too.
You might have heard about ‘qualified real estate agent’ or perhaps even considered a career in the property industry, chances are that you started and then discarded your search due to all the jargon used or the various resources you needed to work through in order to get the full picture. We take an in-depth look at the process and what a real estate specialist has to do in order to earn their commission.
Getting qualified as an estate agent today is not as easy as it was in the past. “It is imperative for an aspiring estate agent to be provided with the correct training opportunities so that they are well equipped to earn a decent income working in an industry that is extremely competitive” warns Lara Machado, Sales Trainer at Engel & Völkers Southern Africa.
This Guide covers the following:
- Definitions of terms used
- Who needs to have a real estate qualification
- The costs involved
- The basic requirements
- Get going – the 5 step process
Need to know before you get started:
- Education Regulations means The Standard of Training of Estate Agents Regulations
- EAAB means the Estate Agency Affairs Board
- NQF Level 4 means the Further Education and Training Certificate required by non-principal estate agents
- NQF Level 5 means the National Certificate: required by principal estate agents
- PDE means the Professional Designation Examination conducted by the EAAB
- PDE 4 means the Professional Designation Examination for non-principal estate agents.
- PDE 5 means the Professional Designation Examination for principal estate agents
- FFC: means Fidelity Fund Certificate issued by the EAAB validating legal trade in property
Who needs to have a real estate qualification?
- A real estate qualification is required by anyone who buys or sells property as a profession,
- Negotiates to buy or sell property;
- Canvasses or undertakes or offer to canvass for a lessee or lessor for rental of property;
- Publicly exhibits a for sale or to let of property;
- Collects or receives any money payable on account of a lease of immovable property or business undertaking; or
- Renders any other service which the Minister of Human Settlements may specify by means of a notice in the government gazette.
What costs are involved?
As with any professional qualifications, there are fees applicable. The costs are not payable all at once, but rather at the various stages of the process. The total fees for the 2 year period is approx. R25 000.
What are the basic requirements?
The intern estate agent needs to complete the 12 month internship of being mentored by a professional and experienced estate agent. This requirement will ensure that the intern is provided with a personal record of all practical tasks completed and experience gained at the workplace.
- The intern is expected to complete and maintain a logbook in which accomplished activities are recorded and signed-off by the principal/mentor/coach/supervisor assigned to assist and provide the intern estate agent with logistical support during the internship period.
- There will be no exemptions granted for completing the internship or the logbook.
The intern estate agent must complete their FETC (the Further Education and Training Certificate) in Real Estate at level NQF 4 through with an accredited provider and receive a certificate of competence from Services SETA (the Services Sector Education and Training Authority)
- This qualification has 150 credits, which equates to 1 500 notional hours (study hours needed to complete the course).
- It is possible to combine the FETC NQF 4 qualification and the internship so that the intern estate agent can work on these two aspects of the qualification at the same time, as long as they have completed at least 8 months of their internship.
- If the intern holds any degrees or diplomas in certain areas, it is possible to apply for and be exempt from completing the FETC.
Lastly an intern must also write and pass the Professional Designate Exam (PDE) after they have been found competent by Services SETA in their NQF Level 4 portfolio of evidence.
- The PDE 4 must be passed within 2 years from the date of the first issue to the intern estate agent of an intern fidelity fund certificate, it grants the intern estate agent a status upgrade to full-status non- principal estate agent.
- No exceptions will be granted from writing the PDE exam.
If an agent wants to further extend their education in order to become a principal and run their own business they must be found competent in NQF level 5 and PDE level 5.
It will take between 2-3 years for an intern estate agent to complete the whole process and 3-4 years for a principal. An intern agent may sell property in the meantime, but no legal documentation – mandates or contracts – may be signed off without the presence of the principal or full-status agent. Professional, registered designations are as follows – PPRE – Professional Practitioner in Real Estate (PDE 4) and MPRE – Master Practitioner in Real Estate (PDE 5).
The 5 step process
Step 1: Apply for a position at a registered estate agency as an intern
All persons seeking to enter the real estate agency profession are required to serve as intern estate agents, acting under the supervision of a principal estate agent or of a full status estate agent who has continuously held a valid fidelity fund certificate issued by the EAAB for a period not less than 3 years, thereby creating a mentor-protégé relationship, regardless of any academic, professional or other qualifications which they may hold.
Once the potential intern estate agent has decided on an employer of choice, they will still need to apply for the position, and go through the interview process. “We at Engel & Völkers have set a procedure of interviews which are completed before we select our agents, as we only take on individuals who will live up to the company values. The first interview after receiving a CV will be a telephonic one, if you meet the basic criteria, you will be invited for an official interview. Should a candidate pass the second phase, they are given an online test to complete which aids us in ensuring that the candidate will be successful” says Craig Hutchison, CEO of Engel & Völkers Southern Africa. This is quite an important step, as the choice of employer could determine the success or failure of the potential intern estate agent.
Step 2: Register with the Estate Agency Affairs Board (EAAB)
Once the intern estate agent has successfully been employed, they need to register as an intern agent with the Estate Agency Affairs Board (EAAB) to receive their “intern” Fidelity Fund Certificate (FFC).
In order to register, a candidate needs to lodge a completed application comprising of:
- Application form
- Certified copy of a valid I.D book;
- Certified copy of a valid passport if not a South African;
- A valid work permit if not a South African;
- Required payment or proof of payment for registration;
- Letter of employment (on an official letterhead) signed by the Principal of the firm.
Step 3: Complete your 12 month internship
All new entrants to the estate agency profession are obliged to serve as intern estate agents for a continuous period of 12 months from the date of the first issue of their FFC. The aim of the compulsory internship period is to equip the intern estate agent with the relevant practical and theoretical workplace knowledge required to operate successfully in the sector. Each intern has to undergo training and practical knowledge of all of the following: Industry, Law, Finance, Marketing, Management, Administration, and Paralegal.
The intern estate agent is expected to complete and maintain a logbook in which accomplished activities are recorded and signed-off by the principal/mentor/coach/supervisor assigned to assist and provide the intern with logistical support during the internship period.
Tasks recorded in the logbook include:
- Listings completed
- Inspections done
- Show houses arranged with registers
- Mandates negotiated
- Sales/lease contracts concluded
- Property values established
- Agendas for and meetings/training attended
- Proof of time management and time/log sheets
Step 4: Complete NQF 4 through an accredited provider (150 points / 1500 hours)
It is expected that, after having served as an intern estate agent for a continuous period of 12 months and having been certificated against the FETC: Real Estate, the newcomer to the sector will have attained a similar degree of knowledge, skills and expertise as a practitioner who has already been active in the estate agency profession for quite some time.
What topics are covered in the NQF4?
- Estate Agency Affairs Act and Code of Conduct
- Real estate product and services
- Legal environment – acts
- Legal environment – contracts
- Financial process FICA/tax/accounting
- Marketing and selling/leasing – immovable property
- Estate agency management
- Agency administration and systems
- Paralegal environment
The criteria for NQF4 qualification
The entrant must complete their internship training (NQF4 Qualification) with an accredited provider and receive a certificate of competence from Services SETA (the Services Sector Education and Training Authority)
- Services SETA (SSETA) governs, controls and monitors education standards. The real estate industry falls under SSETA Trade and Industry. It is legislated that in order to be a full status real estate agent, the candidate must be found competent in the outcomes based NQF Level 4 Real Estate.
- This qualification has 150 credits, which equates to 1 500 notional hours (study hours needed to complete the course). SSETA require 30% of the time spent studying to be in the classroom and the rest open book, on their own. It is designed so that the intern estate agent can easily complete the qualification at their own pace within the allocated time.
- The ideal scenario is to complete the academic qualification simultaneously with the practical logbook in the workplace. The time frame for completion is 1 year for the logbook and 2 years for the academic qualification.
The intern estate agent must maintain a Portfolio of Evidence (PoE) reflecting the various estate agency functions and activities that have been undertaken and performed during the course of the internship period. The PoE & Intern logbook is submitted to the EAAB for assessment and granting of NQF 4 status:
- Intern estate agents holding relevant (certain subjects and experience) tertiary qualification, can uponapplication totheEAABandhavingpaidtherequiredassessmentfee,begranted anequivalencyexemptionagainsttheNQFLevel4and/or5realestate qualifications.
- If the intern estate agent has exemptions for NQF4, they must submit their logbook for assessment together with the required documentation for exemption.
The Portfolio of Evidence (“PoE”)
- The portfolio of evidence will be a separate file, carefully created and maintained by the intern estate agent and should align with the prescribed logbook activities.
- All naturally occurring workplace evidence generated over the 12 month internship period, and reflecting the workplace learning experience of the intern estate agent, should be inserted.
- The intern estate agent will be required to download and print the Portfolio Guides (questions) as they form the Portfolio of Evidence (PoE).
Please refer to the exemption matrix for details on who could qualify for exemption. Should the intern estate agent apply for exemption, their application will also be included in their PoE. The following documentation should be added:
- a letter from the applicant indicating the NQF real estate qualification(s) against which the applicant seeks an equivalency exemption as well as whether or not the applicant currently holds a valid fidelity fund certificate issued by the EAAB and, if so, the status of that fidelity fund certificate (whether an ‘intern’, ‘non-principal’ or ‘principal’ fidelity fund certificate);
- a copy of the candidate’s identity document;
- the candidate’s full curriculum vitae;
- original(s), or certified copy(ies), of qualifications either awarded to the candidate or in respect of which the candidate relies for the assessment of the equivalency exemption application;
- original(s), or certified copy(ies), of the statement(s) of courses passed towards the attainment of the relevant qualification(s);
- original(s), or certified copy(ies), of any other professional qualifications and/or designations that may have been awarded to the candidate; and such further information as the applicant wishes to disclose to the EAAB for the purpose of properly assessing the applicant’s equivalency qualifications.
Some approved Institutions:
National Diploma: Real Estate
|University of Johannesburg
National Diploma: Real Estate
|University of Cape Town
Bachelor of Science: Property Studies
|Institute of Estate Agents of South Africa
|ACEA (Assessment and Training Centre)
|Estate Agent Training Academy
NQF 4: National Certificate: Real Estate; NQF 5: National Certificate: Real Estate
Step 5: Write and pass your PDE4 (Professional Designate Exam)
The Professional Designation Examination (PDE) is an integrated test of knowledge and case study for estate agents. After the internship or after the 8th month the intern estate agent may apply to take their PDE4 exam with the EAAB. After successfully submission of the logbook and PoE, the intern will be allowed to enrol and undertake the Professional Designation Examination for non-principal estate agents (PDE4). The Education Regulations provide that no person may be registered as a full status estate agent unless that person has successfully completed the PDE 4 conducted by the EAAB.
The criteria for PDE qualification
- Only estate agents that have already qualified or been exempted for the NQF 4 (Non-Principals) and NQF 5 (Principals) should apply to write the PDE;
- Interns need to achieve 65% or higher in order to pass and be certified.
- Upon passing PDE 4, the intern’s status will be automatically upgraded to a full status as well as the designation, Professional Practitioner in Real Estate (PPRE).
- Once the intern estate agent is upgraded to a Full Status Property Sales Advisor, they can operate independently within the company they are employed by.
Earning CPD points
Continuing Professional Development (CPD) is the future in real estate, as it is in most other professional industries. This happens via road shows and seminars presented by the EAAB across South Africa on relevant topics including new legislation, changes, updates and amendments. It helps all agents and principals to stay abreast of ever-changing industry regulations relating to real estate, as well as new laws and acts. In order to maintain status and professional designation, every registered agent/principal is required to accumulate and maintain 60 CPD points in a rolling 3 year cycle (equivalent to 60 hours of training).
The process of becoming a Professional Practitioner in Real Estate may seem to be a long, tedious and intimidating one. Engel & Völkers understands that it is crucial for an intern estate agent to be provided with all the necessary tools, guidence and on-going training to assist them every step of the way.
Scott Pharoah made his debut to the property industry in 2015, by acquiring the Hyde Park Licence for Engel & Völkers in South Africa; he then expanded his portfolio to Houghton, Bedfordview and Midrand. This was just the start of more exciting things to come, as Scott just recently acquired the Sandton licence area. His network of property shops now covers a vast area in Johannesburg. Chantalle Bell, Feature Writer for Engel & Völkers Southern Africa, sat down with Scott to find out who he is when not investing in the real estate sector, what makes him tick and where he plans on heading from here on out…
The personal side of Scott:
Those of you who have met Scott will agree that you can’t help but notice his passion and love for all that he does. The exuberant, enthusiastic, positive energy he has for being part of an International Real Estate brand, and the Johannesburg city life is definitely infectious. He noted that he has seen the ins and outs of Johannesburg, and is yet to come across an area that he doesn’t like. “I can truly say that I love Johannesburg – every single corner”.
We started at the beginning and gained a peek into his younger years. Scott grew up in Limpopo in the small town called Duiwelskloof, at that time it only had a population of 2 000 people. He then moved to the big city, Johannesburg, to pursue his studies where he also managed to land his first job in sales, which he did whilst completing his studies. The vibe of the city became part of his blood, and he has now been living here for the past 27 years.
Scott says his passion lies in his family and his faith. He is very blessed to be able to have grown up with rock solid role models in both his parents and grandparents, and this played a big role in the success he has today. He now lives in Atholl, Sandton with his stunning wife of 14 years, and their 4 children aged 2, 5, 6 and 7, equally divided between 2 boys and 2 girls which keeps them quite busy most of the time, not leaving much time for ‘hobbies’. “I do believe that a hobby is just something which you enjoy, and I love any time which I can spend with my family. We have a rule of taking 2 dedicated holidays a year, where we completely go off-grid and quality family time is the agenda of the day. In today’s busy life, I think we tend to allow technology and work to distract us without us even noticing, and we sometimes just need to take a step back and focus on what is most important.
“I recently returned from our 2 week break at our holiday home in Mpumalanga and it has re-energized me completely, ready to get all the new ventures going – so even if one does not always have the time, I do believe you need to make time”. You also need something to take your mind off work when you cannot be on holiday, and during weekends they spend their time relaxing and unwinding at various restaurants in Johannesburg where they love the energy of the city. Scott highly recommends taking a family trip to 44 Stanley, Salvation Café, The Parks, Vovo Tello and New Town JHB to name a few. It is clear that his childhood dream of becoming a restaurateur is not completely dead – the passion is still alive and being lived.
Scott and property:
When asked whether he thinks that property is a good investment – Scott simply smiled with a bit of a frown, almost as to politely say, ‘I own 5 real estate licences – of course it’s a fantastic idea’. He says that in his opinion, next to gold, property is the investment that appreciates the most. After moving out of his parents’ home to Johannesburg, the first property he lived in was a room he rented above a double garage from an elderly couple. After he had a bit of capital built up, he proceeded to obtain his first property in 1997, which was a 2 bedroomed apartment for just R350 000 and it all just grew from there.
Scott noted that he can’t tell us where his dream home would be, as he is already living in it – in the heart of Atholl, although his ideal holiday home would be on the West Coast in Church Haven, Langebaan. He did however quickly answer our question with regards to his favourite room in the house without any hesitation or thinking – “It is definitely the playroom – it is our family’s heart. In this room anything goes. Although I do believe in discipline, I also believe that we all need a space to let our hair down – and this is what our kid’s playroom represents. It is a room where there are no rules – toys and crayons lying around… fabulous, organised chaos.
The Red & White side of Scott
The biggest risk which Scott ever took was leaving formal employment and taking the risk of opening his own business in 2004, this risk has turned out to be the biggest reward! He has since then only continued to expand his business portfolio with the addition of his first E&V shop in 2015.
Scott was introduced to the Engel & Völkers brand by way of visibility in his area, which led him to approach the Engel & Völkers Bryanston shop to assist with the marketing and selling of his property. Needless to say, this resulted in a successful sale and he was very happy with the service received.
The brand stuck with him, and when it came to the decision to expand his business interests to the real estate industry, Engel & Völkers was his next logical step as he loved the brand awareness, the shop concept and the exclusivity. He joined Engel & Völkers as the brand epitomises luxury, professionalism which translates into success. The brand also offers phenomenal systems, classic corporate governance and is truly an international brand.
He believes that the secret to owning a successful business is running a sales team, in a service industry that needs to revolve around good, solid and honest leadership of your staff. Promoting staff and being empathetic to both the buyer and sellers is the philosophy. At the coal face, agents need to be sensitive and understanding to the needs and wants of their clients. “In business, I view staff and clients equally as my responsibility to nurture”.
Any industry has its rewards and challenges, and we wanted to know what his experience has been on this front. Scott says the most gratifying side of real estate is the thrill of fulfilling people’s dreams and ambitions of being property owners. “You get to re-live the excitement of becoming a property owner. Think back on the day when you bought your first or last home, and that moment when you were handed the keys – it is hard to explain the feeling, but I am sure that all property owners will be able to relate”. On the opposite side he also shared his most challenging aspect, which he noted to be maintaining motivation levels of staff in incredibly tough economic times. He added a bit of advice to newcomers to the industry and that is to never let up on their dreams despite the adversities.
The future according to Scott
We all have goals and targets of what we would like to achieve, and Scott is no different. In fact he has already marked out the timeline and is on track to achieve all of his set goals.
Scott is busy getting his Johannesburg office set up as a MMC (Metropolitan Market Centre) in order to get it recognised as an official MMC by Germany. “The ultimate goal is to be Africa’s ‘Manhattan office’, the first of its kind on the continent. It is not a matter of if it will happen; it’s simply a matter of when”.
As we mentioned earlier, they are indeed on track with their plans and we wanted to know what exactly has been happening and what they have been busy with. Between his 5 shops, he will have a team leader for each area, which is assisted by admin staff to support the team in reaching their success. They are currently looking for managers to head up these positions as Scott is looking for exceptional individuals who will share his dream of where the company needs to be. “I believe one needs to utilise any opportunity to its max, so I am embracing this feature, by inviting anyone who reads this article, and feels as passionate about the industry and growth as I do, to contact me about filling one of these positions”.
We almost need an organigram to keep track of the empire which Scott is busy setting up, but we have tried to keep up. Starting at the top, Scott is hands-on involved in the business, but believes in having a strong team who can run with things. For this specific task, he has appointed Debbie Robertson as Operations Manager of the entire group. Debbie is more than qualified for the position. Her career in E&V has grown immensely over the years, starting off as an intern agent; she used the expertise she had acquired over the years to grow into the Team Leader position at the Engel & Völkers Midrand office. In just a short time another opportunity came across her path, and she is now the Operations Manager for all 5 of the shops.
Debbie will be overseeing all 5 team leaders mentioned above, as well as the sub-divisions which are already in place. These include dedicated teams to service all areas of the industry and company. “We have a legal division headed up by Kiki Smith, our in-house attorney who will oversee all the contracts, together with her legal apprentices. Next will be our HR Manager to look after our staff and their needs (we are currently also looking for the right candidate – applications are welcome). Our finance department is overseen by Brendan Pharoah and our in-house marketing by Robert Ogall who looks after the social media, branding and events side.
Scott’s vision is to gain a sizeable and dominant market share in all of their areas in the next year, and whilst he understand this will take time, their teams are driven and pushing towards exclusive listings and gaining market share on a daily basis. With their support staff structure they have in place, there is no doubt that anyone will be able to make a success of their career in real estate, and Scott & Debbie invite candidates for a cup of coffee to see their offering in real time.
If you share Scott’s passion and vision, feel free to make contact and meet him yourself and chat about the opportunities available – or even if you simply feel you would like to meet this ball of energy in person – life is full of possibilities…
At first glance, Capital Gains Tax (CGT) may seem like yet another thing to worry about when completing a tax return, but it needn’t cause confusion. CGT is not a separate tax but forms part of income tax, which is taxed at a lower effective tax rate than ordinary income. Capital Gains Tax is basically a tax on the resale of assets. Anyone that disposes or sells their fixed assets or following the death of the asset owner, is liable for CGT.
When submitting your annual income tax return, any gains or losses based on a transaction during that period must be declared and submitted. “This is where the confusion can occur and it is up to the taxpayer to prove that certain sums were capital, and not revenue. For instance if a property was intentionally purchased with the idea of generating a profit, it would be considered as revenue. But if the intention was as a financial investment, this would be capital” explains Craig Hutchison, CEO Engel & Völkers Southern Africa.
Investors need to ensure they keep proof of their objective of purchasing the asset to avoid the normal revenue tax. SARS is at liberty to question the objectives of the investor if there are frequent property transactions, and might very well consider this as a revenue tax. If the homeowner keeps the property for personal long-term capital growth, SARS will see any profit on this as a capital gain.
There are a many tax tests implemented by SARS to determine whether to implement a capital or revenue tax. For instance, if the buyer purchased a home for personal use (primary residence) this will be exempt from CGT, with certain limitations. SARS considers the first R2 million gain on the sale of a primary home as CGT exempt. Homeowners who use part of the home for business may be liable for different tax structures.
If homeowners understand the basic difference between capital and revenue gain then at least half the battle is won, as everyone always strives to keep their payable tax to a minimum. If you are selling property or intending to, its best you read up on whether or not you need to pay CGT on the profits you make. Here are some pointers to give you a heads up.
When did CGT come into play?
Instituted in South Africa on 1 October 2001, this date is considered the “valuation date”, and only gains made on a property from this date is liable for CGT. This means that while any individual selling a property is liable for CGT, the value on which CGT will be calculated will be based on the value of the property as at 1 October 2001, and the gain made from this date, up to the date of sale. Any profits accrued from this date onwards on the sale of specific capital assets will be taxed with CGT.
Who is liable to pay CGT?
Taxpayers, including individuals, trusts, companies and close corporations, will be taxed on the profit they make when they sell an asset or property. A resident, as defined in the Income Tax Act 58 of 1962, is liable for CGT on assets located both in and outside South Africa. A non-resident is liable to CGT only on immovable property in South Africa or assets of a “permanent establishment” (branch) in South Africa. Certain indirect interests in immovable property such as shares in a property company are deemed to be immovable property.
Some persons such as retirement funds are fully exempt from CGT. Public benefit organisations may be fully or partially exempt. Normal rental income from a property is revenue which is declared on your annual income statement and therefore not subject to CGT.
When should it be paid?
CGT becomes payable when you receive your income tax assessment (IT34). As a registered taxpayer you will simply declare your capital gains and losses in your return of income covering the relevant year of assessment. Keep the records necessary to determine a capital gain or loss in a safe place as many years may elapse, between the time you acquire an asset and dispose of it.
If you are buying South African immovable property from a non-resident seller you must complete form NR02 and an IRP6(3) using the sellers income tax reference number and withhold the tax at the rate prescribed in section 35A(1). You may withhold at a lower rate of tax if the seller supplies you with a tax directive from SARS authorising you to withhold at a lower rate. You must then submit the NR02 and IRP6 (3) together with your payment to SARS. If the seller is not registered for income tax, the NR02 and offer to purchase must be forwarded to email@example.com so that the seller can be given an income tax reference number before payment is due.
A non-resident seller of immovable property may be entitled to request that tax be withheld at a lower or even zero rate under section 35A(2). The reasons why a sale would attract a lower rate of CGT will depend on the facts of the particular case, for example, the person may be fully exempt from CGT, such as a foreign state, or in the case of an individual, having a lower level of taxable income or have disposed of the property at a loss. To request a tax directive you must complete form NR03 and submit it together with the offer to purchase, tax calculation and supporting documentation to firstname.lastname@example.org or use one of the other submission methods described on the form.
For the purposes of provisional tax a taxable capital gain is excluded from the basic amount. If you are not permitted to use the basic amount for the purposes of your second provisional tax payment you will have to take into account any taxable capital gain that arose or will arise during the year of assessment in estimating your taxable income. Likewise, a taxable capital gain must be taken into account when making any third topping up provisional tax payment.
The withholding tax must be paid to SARS:
- within 14 days of the date on which the amount was withheld by a resident buyer;
- within 28 days of the date on which the amount was withheld by a non-resident buyer.
The above will all be managed by the conveyancing attorney managing the transfer of the property.
While this is a very broad overview of what to expect when it comes to CGT, it is always advisable to seek professional assistance to ensure all regulations are complied with and calculations are done accurately.
Your garage must keep up with your needs and lifestyle. Aside from housing your car, it is one of the most useful parts of the home; it is used for a variety of things, such as storage, a DIY workshop or maybe even a man cave.
“When choosing a home, the garage is often overlooked as we get so caught up in the beauty of the home, but it is something which is worth spending a bit more time on, and to consider what you would want to use it for ” notes Craig Hutchison, CEO Engel & Völkers Southern Africa.
Craig continued with some suggested questions one should ask yourself: With today’s fixation on security – Does the garage lock? Does it have automated doors for the added security of not having to get out of your car giving possible prowlers time to stop you before you are safely in your home? If you drive a big car, will it fit into the length and height? Do you need direct access into the house or prefer a separate space away from the main building?
If you have however already settled on your dream home and overlooked the space you require, it is not too late. The reality of having a functional work space in your garage, while still being able to store the necessities and park a car, need not feel like an impossible dream – there are a few things you could do to fix your current situation.
Spring is here and you’ve no doubt got to sprucing up your home for the season, now it is the garages’ turn.
Start off with upgrading your garage doors. It is after all what we see first and can be seen as the eyes of the house. Replacing old doors or alternatively just adding a new coat of varnish or paint could make a huge difference “Well maintained garage doors are the key to enhancing curb appeal and can have a major impact on your home’s appearance and value” Craig advised.
Common Garage Door Materials
Wood doors range from inexpensive, to very expensive.
- The costs are mostly related to the material the door is made of. A lightweight wooden frame, filled with foam insulation and wrapped in plywood is more affordable, whilst true frame-and-panel doors made of durable mahogany, redwood or cedar will cost a bit more.
- Wooden doors are the visually attractive option.
- However take note that they could carry a short warranty and require frequent repainting or refinishing, especially if you live in a damp climate.
Steel leads the pack because it is relatively inexpensive yet tough with low maintenance.
- Bare steel rusts, so you need to touch up scratches promptly.
- High-quality steel doors may have lifetime warranties on the hardware, laminations between the steel and any insulation, and factory-applied paint.
- Budget doors tend to have shorter warranties on some components, such as paint and springs.
Aluminium doors are inexpensive, sturdy, and rust-proof with heavy-duty extruded frames and dent-resistant laminated panels.
- These doors have aluminium frames and panels made of other materials, such as high-density polyethylene.
- Because of its light weight, aluminium is a good choice if you have an extra-wide double door; it won’t put as much strain on the operating mechanism.
Next we look at the floor. You want the most durable, good looking, and longest lasting floors. Standard concrete floors are functional, but, with a little extra effort, they can also be attractive. Give the floors a makeover with splash of paint, new tiles or rubber mats.
Garage flooring is to divide into two primary categories:
Floor coatings – If your garage floor is stained with oil, grease or even paint, you can easily give it new life with some epoxy floor paint. This will also increase the perceived worth of your home. Floors made from cements or concrete can actually deteriorate pretty quickly.
- Pro: Epoxy floor paint resists solvents and chemicals, as well as being water resistant and easy to clean. You also have a non-skid option.
- Con: Though durable and resistant, you will have to replace it eventually. Once the epoxy is applied, changing colors or designs can be a labour-intensive and costly endeavour. In those situations where the floor has to be repaired, removing the coating is quite extensive and difficult.
Floor coverings – These are products that are set on top of the garage floor and can be removed at any time. There are three basic types of garage floor coverings– porcelain garage tiles, 100% PVC interlocking floor tiles and rubber mats. These are hardwearing, remarkably durable, and resistant to most corrosive chemicals whilst also aesthetically pleasing.
- 100% PVC interlocking floor tiles – The ease and simplicity of installing these inexpensive interlocking tiles has made this flooring option increasingly popular. However inexpensive tiles can look cheap if they are not professionally installed. Tiles may come apart at the seams, creating tripping hazards.
- Porcelain garage tiles – These tiles are hardy and tough, they can be slippery when wet so maybe not a good idea in a damp garage, depending on which tile you choose this option could get quite costly.
- Alternatively you can roll out a mat – Garage floor mats come in a variety of styles and colors. It’s the least expensive option and may be a temporary quick fix; however its lifetime is a lot shorter and will have to be replaced often.
The Walls & Space
Once your garage doors & floors are form you can now de-clutter the area, throw out anything that you have not needed to use in a year and sort out all your tools and equipment. Most people use their garage as general storage point and it can quickly turn in to a cluttered mess. No matter how large your garage is, you could always use a little more room.
Here are 9 tips to help you create the right storage options, maximize your space and make your garage feel bigger than it ever has before.
10 tips to maximize space
- Build garage cabinets: Having a formal storage cabinet will help keep your garage organized. This clears up space and prevents items from lying around and getting lost, it also aids in keeping harmful materials/substances safe.
- Install wall organizers: Garages have plenty of wall space and you should definitely use it to your advantage! Install wall organizer units for tools and auto care products, while hanging larger items namely garden tools, even bicycles on hooks. Wall bins are perfect for sporting goods, kid’s toys or small garden equipment.
- Add overhead or ceiling storage: Use ceiling-mounted racks for additional overhead storage or lay down boards across the ceiling beams, this will double your storage potential. Ceiling storage is great for boxes, luggage, and less frequently used items.
- Get magnetic wall boards: Ideal for any steel or metal items lying around. Having small steel and metal parts magnetized to the board will keep them organized and prevent them from getting lost. Baby food jars are just as great for storing small parts in because they are clear, stackable and you can attach their metal lids to the underside of a shelf with hanging jars for easy access – just twist on and twist off.
- Go mobile with work areas: If your family uses the garage for crafting or as a workshop, then replacing the bulky old workshop table will definitely save space. Opt for those that are wall-mounted and can be folded after every use, or alternatively build a work area with wheels. Put wheels on as many stationary items as you can such as floor cabinets, tool chests and work benches. Items on wheels can be moved away from the walls to create temporary work areas, or even rolled outside for an afternoon and then easily rolled back into place when you’re done.
- Upgrade to adjustable shelving: Adjustable shelving lets you move your seasonal items namely clothes or decorations around in your storage boxes as needed. You can add on in the future and customize the configuration as your needs change. It is the simplest, least expensive garage storage solution. Install open wall shelves, place items inside large plastic containers that you can move around and put small shelving units in unused corners of your garage to make the most of your space.
- Install pegboards and hooks: Having a pegboard installed not only lets you hang and organize smaller tools that normally get consigned to a drawer or cupboard, but also allows you to keep larger items namely rakes, spades and other tools in place. You can go large or keep it small depending on your needs.
- Tie and keep wires in one place: If you have a ton of wires lying around this can add to a cluttered look. Tie up extension cords and wires lying around with cable ties; keep everything together in one drawer so you only have to search for a specific wire at a certain place.
- Lock down power tools: Power tools that are rarely used can be kept in your most inaccessible storage. Since these also tend to take the largest space in your garage, pack them away.
Don’t be afraid to use your creativity when thinking about your storage solutions and maximizing your garage space. Think of other ways or things that you can do to save up space and that fits with your style and preferences. Find what works for you and you will be happy with your newly decorated and clean garage.
If you are thinking of selling your home, then one of your biggest concerns will undoubtedly be to find out how much your property is worth. It is very important that sellers set the correct asking price when placing their home on the market as buyers, who are looking at properties to purchase are educated and know what they can buy within their price range.
“The price of your home will get influenced by what is happening on the political and economic stage of the country, the area as well as the surrounding suburbs. The condition and upkeep of your property, is one of the biggest factors which result in home owners losing money, when the opportunity for sale presents itself” informed Craig Hutchison, CEO of Engel & Völkers Southern Africa. Many sellers have inflated beliefs that their house is worth more than what they paid for the property, especially if they have had additional cost on improvements. It is essential that sellers view their home as objectively as possible.
It’s always best to consult a professional estate agent, who will be able to provide sellers with an estimated market value of their home by conducting a Comparative Market Analysis (CMA). They will base their evaluation on statistics and facts and remain objective. This analysis will incorporate the strength of the local market, demand and supply forces, and the sale of other similar properties in the local area. Agents have access to advanced industry developed tools to assist them with this process. The CMA will help to determine how much people are willing to pay for a particular type of property, and this will assist the seller in making an educated decision when it comes to their asking price.
Determining your property sales price in 4 simple steps
Step 1: Get informed
Understand what determines the market value of a home
Your property value will be determined on several different factors. While location is undoubtedly the most important, house prices will also depend on layout, condition, size, future developments, and desirable features. Details like a newly renovated kitchen or manicured lawn will add to your property’s value. Yet house prices are constantly shifting, which means that the property could be valued at a very different price today than what you originally paid for it, or even what it was worth one month ago. It’s essential to understand your property’s current market value in order to present buyers with a focused marketing strategy; otherwise you may run the risk of selling below value.
Step 2: Asks the experts
Obtain an expert valuation
While you can glean data from comparable recent property sales in your area, it’s highly recommended to obtain a professional valuation. The housing market changes daily, so it’s advisable to gain access to the latest sales trends in order to achieve a desirable house price. “At Engel & Völkers, our expert real estate agents have the most current, targeted sales data in each location at their fingertips. Our comprehensive, widespread sales network is able to provide local knowledge, ensuring that you’ll receive a realistic, accurate property value to work with” noted Craig.
Step 3: Do the math & plan
Use your valuation to set a realistic sales price
Your property value report is more than just a number. You can use this figure as a starting point for potential remodelling before putting the house on the market. There are a number of ways to boost your home’s market value, chief among them being a loft conversion which can add an average 12.5% to your selling price. In many cases, simple home repairs and a fresh, neutral slick of paint will create a small increase in value. Your agent can best advise you regarding how to proceed. Refer to the ROI on renovations guide for more in-depth information on which renovations are best to consider.
Step 4: Go to Market
Market your property with value in mind
Qualified real estate agents can optimise the marketing and sales process by using market value as a guide. When consulting our agents, you can choose from a classic sale with public marketing efforts used to secure maximum coverage, or a discrete sale where we market directly to prestige buyers. In either case, we use the market value of a home to craft premium printed materials as well as online advertisements, and reach out to the target buyer demographic at the ideal price point.
Are you ready to sell your property? Get in touch with a team of real estate experts and obtain a professional valuation for your home.
In the month of August we paid homage to the women of our nation and we celebrated the women in our communities. “We have celebrated all types of women this month and have acknowledged and still applaud the women of South Africa who take a stand, and who continue the fight against all the issues which seek to bring women down” says Tihara Baker, Relationship Manager of Engel & Völkers Southern Africa.
As our Women’s month draws to an end we have the privileged of speaking with Dane Van Niekerk, the right hand batter and Captain of the Momentum Proteas Women’s National Cricket team and gain some insight into her sporting career.
Dane’s journey started when she was just 4 year’s old playing cricket with her dad and brother in their backyard. She then started playing cricket as a sport and went through all the ranks in woman’s cricket: U/9, U/12, U/13 and U/15. She was spotted at the U/19 woman’s cricket where she then went to trials for the South African side and was later picked for the 2009 ODI Women’s World Cup in Australia and since she has not looked back and is living her dream.
What advice would you give to other women who wish to have a successful sporting career?
If you fall in love with any type of sport you must follow your dreams. Talent only takes you so far. You have to work hard. You don’t jump into any professional environment. You really have to work hard and train, but if you follow your dreams and if it’s something you really want to do then the opportunity in South Africa is there to pursue it, more so in cricket to be professional and do it as a job.
Do you have a role model? Who and why?
That’s difficult; if I have to look in cricket probably AB de Villiers at the moment. It was Shane Warne, but AB de Villiers is the best batter in the world and, you know, critics are getting him, but he just shows his class every time he goes onto the field and he never backs down from a challenge and he leads his team really well and that’s something I wish to do. He [AB de Villiers] has never been anything less than respectful to anyone that\s ever said anything to him so I think any person would strive to be, first of all, a person like that and a cricketer.
What is your motto in life? / What is your favourite famous quote?
“For with God, nothing shall be impossible”, we have a few players in the team that pray before a game and I believe in that and I guess I go about that before every game.
How do you conquer fears?
What is your outlook on investing in property?
Yeah, look, I think it’s important to invest. People like different things. I like property, because I like houses – it’s there and I can live in it. We’re actually in the market for a new house at the moment so I’m all for investing [in property].
Do you own any property?
Yes I do. A townhouse.
Where would your dream home be located?
Probably a beach house down the Garden Route. I would love anything by the beach so Knysna and those places.
Which room in your home is most important and why?
My room, because there’s a nice TV in there and it’s my bed. We don’t get to sleep there often so when we are there it’s probably the best room. And then the braai area (laughs).