Now is the time to acquire a second or even a third property

With residential property in many South African precincts at last showing signs of slow, but not insignificant, price rises, what advice does Bill Rawson, one of the old hands of the estate agency sector and a major property investor in his own right, have for property trend-watchers?

Asked this question recently, Rawson said that his often proclaimed philosophy of buying at least one home per annum to build up a property portfolio remains valid – for those who can get bonds. With interest rates at their current levels and prices still low, he said, it makes no sense to be ignoring the property market.

In addition, said Rawson, now is a good time to apply for a fixed interest rate to run for two, three or even four years.

“Even if the bank insists that it can only agree to such a bond if the rate is 1% or 1,5% higher than the current rate, I would still advise people to go for it,” he said.

Rawson added that even if it means stretching their finances, potential investors should now be considering the advantages of owning a few properties.

“There are always good investment opportunities, even when, as now, the market is improving – but it can take effort to find them,” said Rawson. “Our experience is that many investors do not take enough trouble and skimp on their research.”

Would he recommend using an estate agent to help in the search?
“Very definitely,” said Rawson “but it would be a mistake to only use one agent. Rather consult two or more agents so that you can select the best from what they have available.”
Does Rawson’s recommendation of a fixed interest rate indicate that he sees rates increasing substantially by 2014/2015?

“Not necessarily,” said Rawson “but the peace of mind that such an arrangement can give and the ability to budget for the foreseeable future would, in my view, make this a good move right now, especially as the South African economy, with a 2,5% growth rate and reasonably contained inflation, is performing better than at least one-third of those elsewhere in the world and this, coupled with the difficulty many people have in getting mortgage bonds, will inevitably boost house prices.”

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