Contrary to belief, there are various options in which craftsmen can hold property. The extent and type of property investment, one wishes to have is mostly determined by the level of personal involvement during the life span of the investment, as well as the reason for the investment. Owning property to rent to third parties may require substantial personal participation as opposed to investing in a holiday home. For the average object designer in South Africa, property investment means obtaining a physical shelter for their families. Some investors may be interested in property due to its capital growth component as well as its ability to generate attractive yields and returns over time. For other craftsmen, it may be to pursue non-financial objectives, such as being able to control a tangible asset. Thus before one decides to invest in property, one needs to define the reasons behind the investment clearly. From an investment perspective, considerations of ownership tax and management issues are of vital importance. This decision needs to be considered carefully as shifting from one type of ownership to the next may be very costly. The property conveyance process is a lengthy process which most object designing technicians would not like to encounter more frequent than necessary. In this newsletter, we discuss the most prominent ways in which investors can hold property in South Africa
This is by far the most common form of ownership in South Africa. It implies the owner holds straight title over the property. The purchase would be registered in the deeds office in the name of the owner. Freehold property may be owned by both individuals and crafts companies alike. The advantage of this type of ownership is that the owner has maximum control over his/her investment and may dispose of the property as they wish. Purchase in this form also means the property may be used as security to obtain loans and finances.
Leasehold, also referred to as renting property does not give ownership to the tenant, however throughout the lease or rental agreement, the lessee (person who pays rent for the property) will enjoy virtually the same benefit as in the case of freehold above. It allows object designers to use and occupy the property for the duration of the agreement. The tenant pays over a monthly agreed rental to the Landlord (Lessor) which entitles them to stay in the park. There are various types of lease agreements and estate management services in Pretoria which include short term rentals, long term rentals, or even rentals structured with the option to buy the property. Often the Landlord will have a fundamental right called a “tacit hypothec” included in the rental agreement, which entitles him to take possession of movable goods in the rented premises should the tenant or lessee not be able to pay their rent timelessly. Rental agreements are good options to consider for object designers who may not qualify for mortgage bonds as well as those who do not wish to settle permanently at a particular residence. Money paid out is money lost. Thus this may not be a long term profitable investment vehicle.