Call To Reduce Electricity Use

“Heavy rains have hampered the supply of coal to Eskom power stations and the utility has now put 500 of its largest customers on a mandatory energy conservation scheme in order to cut electricity consumption in the country.”

Call to reduce electricity use – Market News, News.

It is a Great Time to Buy, but don’t Overspend

Homebuyers should never jump into the market with their eyes shut, even at times like these, when the combination of low interest rates and still-low property prices is creating some wonderful purchase opportunities.

Berry Everitt, CEO of the Chas Everitt International property group, says potential buyers – and especially those entering the market for the first time – should never lose sight of their own personal and financial circumstances, or of the fact that interest rates can go up just as easily and quickly as they come down.

“The low interest rates at the moment obviously do make it much easier to qualify for a home loan, to afford the monthly bond repayments and municipal charges, and to have money left over to keep the home in good condition.

“And as I’ve said elsewhere recently, prices in many areas are still below their pre-recession levels, which at the moment means that the sooner you buy, the better deal you are likely to get for your money.”

But it is extremely important, he says, for homebuyers not to purchase more home than they actually need just because it is “going cheap”, and vital that they leave themselves lots of leeway when working out what monthly bond instalment they can afford.

“Indeed, I think that buyers should always squeeze the price and not their budgets. What I mean by that is that rather than first finding a home to buy and then stretching the household budget to the limit to get the loan and afford the repayments every month, potential buyers should first take a hard look at what instalment they would feel comfortable paying, subtract some of that amount to allow for contingencies like the interest rate going up, and only then go shopping for the best house available in their price range.”

Everitt says good rule of thumb is that a new home should not cost more than 2,5 to three times the annual income of the family.

“So if your combined annual salary is R300 000, you should be looking at homes priced at R900 000 at most in order to keep up comfortably with the bond repayments once you have paid a deposit of at least 10%.”

Potential buyers, he says, should also bear in mind that the banks do not look at home loan debt in isolation. “Since the introduction of the National Credit Act, they have also been obliged to look at your overall financial situation – including debts such as car and credit card repayments as well as your regular monthly expenses such as school fees, insurance, food and transport costs and water and electricity accounts – before granting a home loan.

“And before you rush out to buy a home, I suggest this is what you should do, too, to ensure that all your debt commitments together will be manageable, even if interest rates rise. For peace of mind in this case, I would suggest that your total monthly debt repayments, including your bond instalment, should not exceed 40 percent of your income – which means they should add up to R10 000/ month or less if your combined monthly income is R25 000.”

This article has been reprinted with the kind permission of Chas Everitt International.
Barry Davies
011 801 2500, or visit
www.chaseveritt.com
Page Link: http://www.chaseveritt.com/html/press.html

What You Must Know About Your Managing Agent

One of the biggest growth areas in the real estate industry at the moment is the management of rental property on behalf of landlords – despite the fact that buy-to-let investments now only account for about 7% of property purchases, compared with about 25% in 2004.

“The main reason is that owners as well as tenants have come under increasing financial pressure in the past two years, and simply cannot afford to risk rental defaults,” says Berry Everitt, CEO of the Chas Everitt International property group.

“Many people still own several rental properties that they bought during the boom years and are in a situation where one bad payer could jeopardise their whole portfolio.

“But the most vulnerable in this respect are homeowners who, having found themselves in financial distress but unable to sell their properties in a soft market, are renting them out to cover their bond repayments while living somewhere cheaper themselves.”

Writing in the Property Signposts newsletter, Everitt notes that while falling interest rates have steadily reduced the incidence of non-payment or part-payment among tenants since last year, this is still around 20% (one in five) in most areas and income brackets, according to the latest Rental Payment Monitor compiled by TPN.

“In addition, low inflation and rising municipal service charges are going to make it very difficult for landlords to raise rents by much next year, which means that they will have little or no cushion if a tenant does default.”

In short, he says, the need and demand for expert help in managing rental properties is set to grow even more. However, there are some important things for owners to check before entrusting the management of their properties to an agent. These include:

• Ensuring that the agent is registered with the Estate Agency Affairs Board and has a trust account for holding tenant deposits;
• Ensuring that the agent is at least working towards obtaining an NQF4 or NQF5 qualification by the end of 2011, when these will become essential for an agent to practice legally;
• Ensuring that the agent has proper systems in place to check on the creditworthiness and payment history of prospective tenants, and will also establish that they are not currently under debt review;
• Ensuring that the agent will not under any circumstances hand over keys to the property until the deposit and first month’s rent have been paid; and
• Ensuring that there is a clear, written contract detailing exactly what services the agent will provide in return for his or her management fee – and whether this is a set amount or a percentage of the rent.

This article has been reprinted with the kind permission of Chas Everitt International.
Barry Davies
011 801 2500, or visit
www.chaseveritt.com
Page Link: http://www.chaseveritt.com/html/press.html

It’s safer to sell before you buy a new home

Many homeowners are looking at the upgrading opportunities presented by the current market and making offers to purchase bigger and better properties before they have even listed their existing homes for sale.

And there are of course certain advantages to buying a new home before you sell the old one, says Berry Everitt, CEO of the Chas Everitt International property group. These include the fact that you know where you’ll be living next, when you can take occupancy and how much you’ll be paying.

“Buying first also usually means you won’t have to move twice. Many repeat home buyers have had to move to an interim rental property because they couldn’t find a replacement home by the time they had to turn their existing home over to the new buyers.”

However, he says, this really may not be the wisest approach. “For a start, there’s a good chance that it will take longer to sell your existing home than you anticipated it would, and that you could end up being liable for two home loan instalments a month.

“Such double payments can add up remarkably quickly, and then you would probably feel pressurised to lower the price of your old home just to achieve a sale.”

Writing in the Property Signposts newsletter, Everitt says it is best to do some homework before making any decision. “Find out the current market value of your home from reputable estate agents in your area and quiz them about market conditions. Is it a buyer’s or a seller’s market in your suburb? In a hot seller’s market, the chances of a quick sale are much higher than in a soft buyer’s market.

“You should also establish whether there any problems with your home that could make it difficult to sell. Is it located across the street from a noisy school? Is it next to a busy freeway? Does it lack a garage or a second bathroom? Is the floor plan awkward?”

Armed with this information, he says, you will be better able to assess the risk of buying first. If it’s likely that your home will sell quickly, it may be worth the risk of buying before selling. But if the marketability of your home is questionable, you should really consider taking the more conservative route of selling before buying.

This article has been reprinted with the kind permission of Chas Everitt International.
Berry Everitt
011 801 2500            
www.chaseveritt.com

Home Loan Help for the Self-Employed

Changing economic circumstances and new lifestyle expectations mean more and more people these days are self-employed, as business owners or as freelance specialists who work on contract for a series of clients.

But even though many of them are high earners, they often find it difficult to get home loans, thanks to the fact that most banks still regard them as higher risk borrowers than corporate or public sector employees.

However, if you are self-employed, you should not give up hope just yet, says Berry Everitt, CEO of the Chas Everitt International property group. “There are ways for entrepreneurs to improve their chances of being granted a loan, the first being to get advice from an experienced mortgage originator on what size loan to apply for and how to first resolve any credit record issues that could count against you.”

Secondly, he says, if you are self-employed you should not even think of applying for a home loan unless you have all your business and personal financial administration up to date. “Remember, applicants in ordinary employment can usually provide pay slips, and income can be further verified by contacting their employer. With self-employed applicants, there are no third parties to provide such verification so lenders have to fall back on other proofs of income – and indicators of the stability of that income.

“So before you get ready to fill out that bond application, you should assemble all the supporting documentation that is likely to be required, including your annual financial statements and tax assessments for the past three years, bank statements and a cash-flow summary for the past six months, the most recent three months’ management accounts and a copy of the lease if you rent your business premises.

“You will also need a certified copy of your ID, a letter from your accountant attesting to your monthly income and a statement of your domestic income and expenditure.”

Writing in the Property Signposts newsletter, Everitt also says you will greatly improve your chances of being granted a loan if you have cash available to pay a deposit of more than 10% of the purchase price of the property you would like to buy.

“Lenders are much more inclined to grant loans to those who demonstrate financial discipline by saving a deposit and come prepared to invest at least some money in their own properties.”

This article has been reprinted with the kind permission of Chas Everitt International.
Barry Davies
011 801 2500, or visit
www.chaseveritt.com
Page Link: http://www.chaseveritt.com/html/press.html

Buying Property Off-Plan in South Africa

Buying “off-plan” means you are purchasing your new home in a sectional title complex or cluster home scheme before it is built and will be depending on the developer and builder to complete your home properly and timeously.

Buying off-plan property has become a popular choice in South Africa. Property developers are keen to maximise on off-plan sales as an aid to financing a project. Buyers choose their properties from plans, elevations and computer graphics, and need to exercise their imaginations to envisage the end product.

When buying a property in South Africa off-plan, you need to do your homework and you need to be aware of potential pitfalls. There are many stories of buyers who bought property off-plan only to discover a variety of defects on the property once they had taken occupancy of the property.

Because most property you buy off-plan in South Africa will have appreciated in value by the time you take transfer, buying off-plan remains an attractive option. Buying property off-plan also saves the buyer on transfer duty and buyers are also given the freedom to choose their own fittings.

In most cases when you buy a property off-plan you will be shown an “artist’s impression” of what the property may look like. Always take into consideration that this is not a guarantee of what the property will look like, but is a visual possibility drawn up in the initial stages.

A reliable property developer will ask the buyer to draw up a list of defects on the property to be submitted within a certain time frame so that these may be attended to by the developer before occupation.

Some things to look for when drawing up a list of defects include:

• Straightness of the walls
• Light switches working
• Plugs in working order
• Scratches, cracks and marks
• Stove in working order
• Taps, shower, bath and plumbing are in working order

The first buyer of a new property is exempt from paying Transfer Duty which can offer savings on a property. Profits from off-plan properties can be free of capital gains tax if the property is sold before completion.

In order to maximise on profits through off-plan purchase it is essential to purchase early. The South African property market, as in many others, is experiencing a steady growth and prices never stay at the initial offer level for long.

There are plenty of ways to insure that you are protected under new housing laws. A few years ago the Housing Consumers Protection Measures Act was introduced. Under this law the National Home Builders Registration Council was established to protect your interests.

This article was originally printed by Agent, the Official Publication of the Estate Agency Affairs Board

Validity of Property Sale Agreements

Once a property sales agreement has been signed, it is not necessarily cast in stone and can, in fact, be altered. People often panic when if they need to alter something in a document after signing. It is so that once the sale agreement has been completed and signed it becomes a binding contract; changes may be made, providing that they are done in writing and are signed by all the parties in order to be a valid binding.

But very important, also take note that any informal variation, for example a verbal agreement between the parties, will be null and void and the signed sale agreement will be taken to be the final agreement, because the variation was not recorded in writing.

Reasons for a change in sales agreements vary. Such reasons include a common mistake or recertification. Common mistakes are sometimes made by the parties involved in, therefore leaving the parties unsatisfied and results in the terms of the agreement not reflecting the intentions of the parties. Other reasons could be as a result of the parties that wish to rectify some of the material terms after signing.

If the sales agreement is amended by only one of the parties, this amendment would be null and void. All parties must be confident and in agreement with the alteration of terms, and consensus must be given.   

Provided that all alternations are signed where they are made on the agreement, by the parties, the amended agreement will be valid.

Healthy Green Lawns

Have a green, lush lawn simply by putting a bit of planning before putting in a lawn and pay attention to a few details in order for the grass to grow well and stay healthy. Everyone can do this.

If the grass around your home isn’t meeting your desires, don’t worry, because there are numerous reasons for this. A few of them, for example, are:

• The needs of your lawn have changed. Perhaps you didn’t have kids and now you do, so you had a lawn that liked low traffic, but now it gets tons of traffic, and the grass is not able to cope with it
• You may be trying to grow the wrong type of grass for your area
• Trees and shrubs have grown up, and your yard is now shady, rather than sunny.

Repairing Your Current Lawn

There are two ways you can repair an existing lawn: Over-seeding or Patching

Over-seeding
This is a great solution if your current lawn is more than 50% good grass and you would like it to be thicker, greener, and more vigorous. Simply reseeding it with a variety that is new and improved will help immensely.

Determine the Trouble Spots:

Take a look at the trouble spots and determine what may have caused the deterioration in the first place. Was it too much foot traffic? Shade, drought, disease? Once you have thought about this, choose an appropriate new grass for over-seeding.

For example: Select a shade-tolerant seed blend for shady lawns, or a blend that takes more foot traffic.

1. Mow your existing lawn as short as you can, almost to the point of scalping it
2. If your mower doesn’t have a bag, rake up the clippings. This helps expose the soil
3. Use a metal garden rake and scratch the soil as hard as you can to rough it up and create a good seedbed
4. Sow the seed at 2 to 3 times the recommended amount on the seed bag
5. Cover the seed with 1/4 inch (.64 cm) of topsoil or finely ground compost
6. Water every day to keep the seeds moist until they germinate – letting seeds dry out only once can reduce your germination rate greatly
7. Allow the seedlings to grow to 3 to 4 inches (7.6-10 cm) and then mow
8. When mowing, remove only 1/3 of the height; don’t cut it too short

Patching

This is the best solution if most of your lawn is looking great, and you have only a few trouble spots, such as a weedy patch or a bare spot. You won’t need to go to all the trouble of installing a new lawn, or over-seeding; just patch the problem spot.

As with over-seeding, it is best to first diagnose the problem before taking the next step, to determine what may have caused the deterioration in the first place. Is it a chronic spot, or a one- time accident, like spilling gasoline or bleach on the grass? If it is a chronic spot, take a look at what may be causing it.

• For spills, you’ll want to flush the soil thoroughly in order to leach out all the chemicals
• For a shady area, consider patching with shade loving grass blend
• For a compact area, aerate the area, add in some compost, mix into the soil and put down some gypsite to help the drainage

 

What Does a Ring Around the Sun Mean?

“A diffraction disc or Airy disc has similar appearance, but is a disk, rather than a ring, and has a red border on the inside. Its size depends on the size of the ice or water particles that cause it. These are also known as coronas, but are not to be confused with the thin streaming luminous gas that makes up the sun’s own corona.

NOAA Photo Library

In folklore, a ring (often called a halo) seen around the sun or the moon means precipitation (usually rain) is coming.

Cause

The ring is caused by sunlight or moonlight being diffracted as it passes through cirrostratus clouds that are usually at altitudes above 20,000 feet. Cirrostratus clouds are composed mostly of small ice crystals that spread out into a thin layer. They are sheet-like, and the sun and moon can be seen through them easily.

Types

Halos are most commonly seen as a white ring around the sun or moon, but sometimes they can appear as a rainbow-colored ring with red on the inside and going to blue-white on the outside. This is seen more often around the sun than around the moon.

Sizes

Halos most commonly form at a 22-degree radius. A more rare halo is the great halo, which forms at a 46-degree radius.

Good for Predicting Weather?

A ring around the sun or moon in the warmer months is a good, but not guaranteed, indication there might be precipitation within 12 to 24 hours. Cirrostratus clouds usually come before a warm front, which often brings precipitation.”

This article was originally printed by eHow Blog.
http://www.ehow.com/facts_5232115_ring-around-sun-mean_.html#ixzz1411XElc3

National Health Insurance – “Wishful thinking”

“It is estimated that about R11bn is required to start implementation of the NHI by 2012. Government has indicated that it will roll out the NHI over 14 years, starting with rural areas in 2012. The scheme will be publicly funded and administered, providing high quality healthcare free of charge. Speculation, however, is rife that government is planning to increase tax in 2012 to support the NHI.

SA’s official population is 49.9m, of which 8m contribute to a medical aid scheme. The NHI will cost the government an initial R128bn in 2012, R267bn in 2020, and R367bn in 2025. The GDP spend by 2025 is estimated to be 7.8%.

Commentators indicate that South Africa cannot afford the NHI with the current taxpayers. It is “wishful thinking” and we need to think carefully about it. It is not possible with 5m taxpayers. If we increase tax on professionals they will leave the country. The country has about 5.5m registered individual taxpayers, of which about 4.8m actually earn enough to pay taxes. Of the 4.8m, about 25% earn 60% of the taxable income but pay 75% of all individual taxes.

With South Africa’s tax already around 30% of GDP, the cost of the NHI may increase the already heavy burden carried by taxpayers and will have a negative impact on the morale of taxpayers.”

Written by Stiaan Klue
This article was originally printed by The South African Institute of Tax Practitioners (SAIT)
PO Box 73, Featherbrooke, 1746
Tel: 011 662 2837
E-mail: info@thesait.org.za