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The thread on my investment property that turned into a bad financial investment.The year 2011, the intention was to invest in a property that would provide good rentals & over time form part of my pension plan for my parents. form of a pension fund for the parentals.
In looking for a property, I detailed the criteria for my search;
1. Investment purpose- rentals for parentals pension fund
2.Location-the property was in a great where house prices would appreciate over time
3.Valuation- the price I paid was in line with the average house price
1. Investment purpose- rentals for parentals pension fund
2.Location-the property was in a great where house prices would appreciate over time
3.Valuation- the price I paid was in line with the average house price
In the area,I loved the property so I paid R100k more than I should have
4.Expected cash flows- I was 25, working for the bank (staff rates, repo rate applies),armed with this knowledge, took out a 30 year bond,paid a 10% deposit and took maximum bond amount I qualified for
4.Expected cash flows- I was 25, working for the bank (staff rates, repo rate applies),armed with this knowledge, took out a 30 year bond,paid a 10% deposit and took maximum bond amount I qualified for
Armed with all this knowledge I bought my 4 bedroom, 3 bathroom property in a great area (my ego was also at play, parentals business had failed, by buying this property i could redeem my family from the shame of a failed business and family members talking about how financially
Ruined my family was, my parents where the bread winners and being the oldest child I felt the need to redeem our name
5. Got a reputable agent to manage the property and we were set to go
6.Year 1&2 of renting out the property went well, was feeling great about my investment
5. Got a reputable agent to manage the property and we were set to go
6.Year 1&2 of renting out the property went well, was feeling great about my investment
Year 3 and the issues started, the first tenant who had rented for 2 years moved out. Instructed agent to proceed with finding a new tenant. Within a a month a new tenant was found, background check everything, happy we proceeded. Fast forward a month into the new lease
My neighbours start smsing me about the new tenants and how shady they are, thinking nah people love to complain. Let me give the new tenants benefit of the doubt. A month later I get complaints from my other neighbours which coincides with a plumbing issue at the house.
Perfect time to get a person I trust out to the house to fix the issue and find out what is going on. Send the maintenance guy to the house and wait for a report. 1 hour after the maintenance guy visits the property and he is like he agrees with neighbours something shady
Is happening at the house, he estimates there are over 10 people staying in the house, they have partitioned the house including the living room. Now iam worried and start devising a plan to evict these tenants.The area has great security and my neighbours don't tolerate nonsense
Whilst iam devising a plan to evict, my neighborhood watch called the police and special investigation to my house, the house got raided and turns out the tenants where doing shady things in the house, selling all sorts of things from my house. Post the raiding told the Letting
Agents to get lost.Cleaned the property up, paid an arm and a leg to clean the property to the standard where I could Let it out to new tenants, lost rental income plus maintenance costs
. During all of this I leave the banking industry and the stagf repo rate I enjoyed means
. During all of this I leave the banking industry and the stagf repo rate I enjoyed means
My bond increased by a whole R4k
. Enlisted the service of my trusted maintenance guy to look after the property for me and to manage rentals because by this time, my life is hectic i have started a small family, work is crazy etc. Get a new tenant for 3 years
. Enlisted the service of my trusted maintenance guy to look after the property for me and to manage rentals because by this time, my life is hectic i have started a small family, work is crazy etc. Get a new tenant for 3 years
Great guy who takes care of the place, unfortunate circumstances guy moves out. Get a new tenant guy stays for 3 years, year 4 in 2018 guu gets retrenched, i understand iam very accommodating whilst he looks for something. 6 months later things stabilise and he is back to paying
Fast forward another 6 months guy starts with his shenanigans of not paying,start looking for ways to evict him legally.Finally in May last year he moved after giving me the run around. He owes me over R40k.I now revamp the house and spend a small fortune which takes me 6months
February this year put the house on sale after spending R146k in revamping costs,I am drained & can't wait to sale.March 2020 we go into lockdown
.Yho iam exhausted,if I was not financially astitute I would have been financially ruined by now. I have decided to auction
in revamping costs,I am drained & can't wait to sale.March 2020 we go into lockdown.Yho iam exhausted,if I was not financially astitute I would have been financially ruined by now. I have decided to auction
