I attended Coert’s course on property investment and have benefitted significantly over the last 8 years. However, people cannot just go out and buy properties willy nilly where the rent to value ratios are so out of sync that you sit with massive shortfalls every month, while hoping for the capital growth to bail you out. I stopped buying in 2006 because the fundamentals just didn’t make sense and started buying again last year when everything collapsed. Advice from experts is important, but you the investor still sign the sureties, so use common sense and run the numbers.

Neale, great article! As we have seen all over the world, the best investors invest based on the numbers and the income of the properties. These investors are the ones who have been able to take real advantage of the current conditions and every other property drop in the past. In the UK all the most wealthy property investors I know made their money between 1991 and 1994 and in South Africa from 1998 to 2002. Those that focus on capital gains are more like gambling as they can’t control the variables and invariably their luck runs out!

Whether it is Robert Kiyosaki, Dr Hannes Dreyer or any other successful property investor who has made a fortune in property – there is one underlying principle “Focus on the cashflow” to be successful long term!

The onus remains on the individual to interpret the market information he has at his disposal, however there is a grey area when it come to the potential “exploitation of the uninformed”, when entities/individuals, under the guise of being property experts, entise individuals to purchase property investments. If TREOC’s business model was designed purely around a knowledge base from which individuals could gather information and then make an informed decision, then this debate would not be prevalent. The fact that, having used their position of being an “educated authority” to sell property,with the market conditions we are now experiencing, they must surely be prepared to take the heat from unhappy investors who bought into their formulae for success! My personal view… those who are able to focus on a category of property,in a particular region, and who then become experts in their own right, in that particular area, are the ones that end up making the real money in the long run. Not those who run like lemmings to the cliff face looking for the quick fix..

I agree fully with your article.
Treoc has a proven track record with suvccesfull investors.
One can not expect a investor club to make you a millionair! The responsibilty lies with you to take an interest in your protfolio!
If you want to apply for bonds and take on a short fall greater than your income then you must be ready for the consequences.

I also attended a Treoc seminar and established my Trusts recently. My first investment property is currently in the registration phase and very excited about that. I think Coert and his team is dedicated and are provides the best advice known to them to their members. Investors have to take their own decision and responsibility. Like any other business, Treoc has competitors and those will take whatever opportunity they can find to discredit the others.

Neale, good article to keep the focus on common sense. It is always the best to run the numbers and second to that to be prudent in the calculations.

I would like to ask anyone out there to comment if they know of a database of properties in SA which can be sorted by the region or neighborhood according to the rental income that that particular property may yield.

Any ideas?

Good article.

I attended Coerts presentation in 2005 and did not invest for 12 months (my mistake) as I thought then the market would turn. When the situation did not turn I made a decision to invest. I bought 7 properties over 2 years and when things started turning in 2008 quite rapidly I stopped as I could see that I needed to use reserves to get through what I could see would be a moderately difficult period. I currently have quite substantial shortfalls which I subsidies from reserves and current income. I do see that over time the property will pay off and that is why I have remained positive even though the current climate gives me great pain. I recently bought a new residential property for my family but did not sell my old residence rather converted it into two rental income properties that covers the bond (cash positive). If it was not for the education I had in 2005 I would have not made any bold steps to secure my longer term financial freedom through property investment.

All through this process I have tried to limit my exposure to whatever shortfall I felt comfortable to handle with rental and other income. Barring loosing my Job or having a serious financial setback I would manage at least a 2 year shortfall from my own sources without relying on capital growth (which will come eventually). I am possibly sorry now that I did not keep more reserves to invest in more property now that it is an investors market but that was of my mistake and who could have predicted the extent of the current recession. I am still positive about longer term benefits of property and believe that I have more control of my financial future compared to that experienced by someone who has an uncontrolled monthly pension investment.

I have made mistakes but they are my mistakes which comes down to the aspect of allocating blame, those that blame others for their current demise will never be able to learn from what happened to them. The net result will be that they would make the same mistake again in the future.

Good article and good web site I think an open forum like this is what the investment community needs, other web sites that have ulterior motives prevent open debate on topics.

I am a member of P# which was mentioned in the article. We receive free annual seminars/training and free financial consultations when needed. They help you to plan your property portfolio responsibly and give you sound advice. I have 4 properties (house and 3 flats) and 2 sales of flats pending). After a 35% salary decrease, my 2 paid off properties now augment my income to previous level. When the economy improves, the rentals of the loan free will pay of the 2 new properties. Investing in property is always good, but be very careful of large shortfalls. I have followed that rule and am picking the fruits. Thanks Neale! Good work to keep us thinking! Don’t stop.

Surely investors have to take responsibility and accountaility for their property acquisitions… Investors themselves sign the offer to puchse, complete the mortgage loan application, provide the supporting documentation, sign the security documents, instruct the conveyancers to proceed to registration of transfer… and of course, add the asset to the balance sheet. Many bona fide investors still enjoy the benefits of sound property investments – it remains an excellent asset class, and the way in which one structures one’s property portfolio remains one’s own prerogative… notwithstanding the advice of an intermediary.

We tend to blame the instrument rather than the operator! We need a licence to drive a car, but not for other important things. I also looked at Coert’s system and decided it was too high risk for me. But I still believe in property as a vehicle to financial freedom.

The old rule still remains: Invest in yourself before you invest your money. And caveat emptor, which I translate: beware of hype!

All the world’s most successful investors have one thing in common a powerful mindset with a clear vision of what they want to achieve and how they will achieve it. Real wealth through property is built by developing your systems and learning adopting various best of practice from people who serve you continously with integrity. They are part of your solution and even your team…