Property Literacy Workshop

Once you start working, you start considering a lot around investing, additional income, owning property and all that kind of jazz. The information we have is often not from professionals but from what other people have experienced, which makes the information a little skewed/biased.

I often take time out to learn as much as I can from different platforms.

I am so excited to share about the Property Literacy Workshop I attended today. (10.08.2019- Hosted by Kagiso Sebetso). I learnt quite a bit and will try and summarise the pearls of wisdom from the workshop.

What drew me to this workshop, among other things were the tag lines they had on the digital “pamphlet” advertising the conference.

Do you want your own slice of the growing Botswana Property market?

Are you discouraged by the large sums of money required to start out as an investor or home owner?

CHEER UP! It’s not too late to make your mark in the property market.

This was such a great experience and I learnt A LOT. A few things stood out from the workshop that I knew I HAD TO SHARE with you. Kindly feel free to read this over a few days- it might be a bit too long.

CURRENT MARKET TRENDS

There are 4 key elements in the property market:

• Finance Market-Lending rates, cost of borrowing, cost of funding.
• User (Buyer/Seller)
• Developments– what is happening where? what is in the pipeline? How do I benefit
• Land

These 4 elements will play a great role in what is termed the current market trend at each point. If the lending rates go up you need to know how that affects you. If the cost of borrowing increases, you need to know what that means for you as a developer/investor in the property market.

BUYING vs BUILDING

The big question. The answer will always vary depending on what you want as an individual. Buying isn’t always a good/bad idea, similarly with building. So at all times you must consider the Pros and Cons for each and choose what best suits your need at that point.

Some things to consider:

Buying

• Check how much you qualify for at the bank (if you are buying through financing)
• Identify the property of choice
• Get a valuation
• Engage Legal Representation
• Submit documentation to financier

All these have associated costs.

Building

• Similarly, check how much you qualify for and the rules related to building loans (if you are buying through financing)
• Identify the land for development
• Engage an architect
• Engage a Quantity Surveyor
• Seek financing
• Engage a contractor – turn key/ self managed development

Again, these have costs associated to them.

Remember not to cut corners. Any overlooked items in property may come at a high cost to repair or address after the property has been handed over to you.

• When buying, the seller has more power (adding a personal touch after after buying comes at a cost), however when you build, you have control over the cost of building (owner based specification).
• Take into account all costs- legal fees and transfer related costs, connecting utilities, costs that come with the location of the property (Rates, council service fees etc).
• time taken to build (are you willing to wait?). It really is over to build over time

PROPERTY FINANCING OPTIONS AND PROCESSES

OPTIONS AVAILABLE:

• Development Mortgage
• Ordinary Mortgage Loan
• Building loan
• Bridging Finance

Things to consider outside the above;

• Investment/Equity Finance
• Debt to income ratio
• Costs of financing
• Processess
• Re-sale value of the property you are acquiring
• Syndicated purchases

There is so much to say but I think I will stop here for now. All in all, it is important to take into consideration all different factors that come into play when entering the property market.

Ask yourself- am I going in as a Developer? and Investor? or as an End-User. This will help you make suitable financial decisions.

Do not limit yourself to residential property. Not all areas are suitable for Multi-residential properties. We talked about sectional titles, commercial property, property in other markets/countries. This helped widen my view point on how to join into the property market.

Key areas you can look into:

• Types of land tenure
• Transfer Duty
• Attorney related fees
• Bank Charges
• Property Insurance

Take time to learn and invest in your areas of interest.

There will be more workshops so will definitely let you know when the next one comes up.

We were given a really cool workshop toolkit. (See below image)

I will be going through some of the self assessments it has and will share more information with you over time. These are meant to guide us in deciding who we want be in the market:

• Developer
• Investor
• End-User

Find your NICHÈ and maximise on it.