In this week’s Property Magicians Podcast, we bring you a bonus episode from a class we had for our stokvel members where Leroy taught us about running the numbers and analyzing a deal so we could understand what makes a property profitable and if it's ever a good idea to make a loss in cash flow on an investment.
In this class, we learned that there are three stages when it comes to running the numbers:
Stage 1: Capital Cost
- Transfer Attorney fees
- Transfer Duty (if your property is over a million rand)
- Bond Attorney fee
- Deposit
- Auctioneer costs
Stage 2: Refurbishment/ Holding Cost
- Rate & Taxes
- Electricity/water
- Bond/interest
- Refurbishment
- Levies
- Insurance
Stage 3: Letting/Resell Cost
- Bond/Interest
-Insurance
- Rates & taxes
- Levies
- Maintenance
- Management fee
- SELL- EA Commission
Leroy also taught us some fundamental Calculations:
● How to calculate gross yield and why this figure is important
● How to calculate cash flow so we can know if a property is a good investment
● How to calculate capital cost so we could budget and know how much of our own
money we are investing in a deal
● How to calculate ROI (Return on Investment)
This is a very valuable episode, so we recommend you get your pen and paper out and take notes. And don’t forget to join the Property Magicians Stokvel because we’re building an incredible property portfolio and providing real estate education.
Episode 132: What happens when someone owes you money and won’t pay
Episode 131: Creating financial freedom with real estate in Botswana
Episode 130: Growing a coffee brand throughout South Africa
Episode 129: Building student accommodation in the township
Episode 128: A fintech company that helps you go from first time homebuyer to property investor
Bonus Episode: The most common property investing questions with PropDocMom
Episode 127: Building a real estate portfolio through intuition and ancestral wisdom
Episode 126: Understanding your why when investing in property
Episode 125: Talking to the author of “Stokvels - How they can make your money work for you”
Episode 124: From sourcing deals for investors to investing in multi-lets
Episode 123: How to earn passive income with short-term rentals as a full-time employee
Episode 122: How to make R27,000 (US$1,695) per month on your first property flip
Bonus Episode: Make 17% ROI per annum in your next property deal
Episode 120 (repost): From Being a Creative to making R100k (US$6500) in his first real estate deal
Episode 121: Buying your first property at 21
Episode 119: How to make a fortune developing low-income housing in South Africa
Episode 118: Making US$2,000 - US$4,000 a month with a guest house in Botswana
Episode 117: Using multiple strategies to build your real estate portfolio
Episode 116: How to own property in Rwanda
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