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Building Wealth Through Multiple Properties

Many individuals who already own more than one property mistakenly overlook key principles of wealth creation that could potentially unlock their ability to grow their property portfolios.

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Many individuals who already own more than one property mistakenly overlook key principles of wealth creation that could potentially unlock their ability to grow their property portfolios.

Praven Subbramoney, CEO of Private Bank Lending at FNB says the ability to build wealth through multiple properties should not be determined by how deep your pockets are, but rather identifying niches in the market and maximising assets and expertise that you already have at your disposal.

“Wealth creation is a process and cannot be achieved overnight. Therefore, the first step is having a clearly defined, long-term strategy and objectives that will underpin your venture,” says Subbramoney, as he unpacks some of the important factors to consider when building wealth through multiple properties:

Area of specialisation

Identifying the types of properties and market you want to target is vital. If you are in the business of leasing to students, it makes sense to acquire multi-tenant properties situated next to universities, whereas if you focus on renovating and reselling for a profit, finding distressed stand-alone properties which are sold below their market value may be ideal for you.

However, as you progress in growing your portfolio, you can then consider property diversification.

Related: What You Need To Know To Become the Next Property Entrepreneur

Market trends

Research underpins your success in this sector. Understanding where to buy, when to buy, how much to offer for a property and knowing the right time to sell an underperforming asset will determine your success.

Start small and work your way up

The biggest mistake that individuals make when starting out is overstretching themselves financially by going for properties that are beyond their reach. Start investing in more affordable property and build your way up. For example, if you are in the student accommodation market you can get flats in Braamfontein, Johannesburg next to major universities from as little as R350 000 for a one bedroom flat to R1.3 million for a three bedroom flat.

Depending on your strategy, it may be risky to go for the R1.3 million flat when you have limited cash flow.

Maximising assets

Leveraging the existing equity in the properties that you currently own can help you take advantage of viable opportunities. Lenders are also able to provide you with a range of solutions tailored for your needs, with a competitive mix of rates, flexibility around repayment options as well as capital access.

For example, you can always refinance your current property and use the equity to take advantage of new opportunities or use a combination of securities that you currently own to raise a loan.

Cash flow management

Like in any other businesses, cash flow is the lifeblood of your property portfolio. Not only is keeping track of money coming in and out of your portfolio essential for making strategic decisions, lenders may also require your cashflow statements to approve loans in the future.    

Monitoring your cashflow can also help you identify properties that are over and underperforming in your portfolio.

Related: Persistence Can Beat Any Odds Says The Founder Of Rebosis Property Fund

Take advantage of technology

Innovative digital tools can give you access to valuable information about a property, instantly at a click of a button.

For instance, with nav›› Home which can be accessed online and on the FNB Banking App, you have the opportunity to search for new homes, get free instant value estimates, pre-approvals, calculators and access to a database of home service providers.

Nav>> Home also offers free area and property reports that are pulled from a number of sources including the bank’s own valuation base built up over years and the Deeds Office to give a comprehensive overview of a suburb or particular house.

Using the right professionals

While this may not be essential when starting out, you should consider investing in a team of professionals as your portfolio grows. Depending on the type of portfolio you are pursuing, you need a list of qualified experts, such as tax practitioners’, estate and rental agents, attorneys, builders, renovation contractors, electricians, plumbers and valuators, amongst others.

Although, some of these experts may come at a premium, the investment will be worth it in the long-term.

“Lastly, developing a long-term relationship with a Private Banker who truly understands your financial needs and goals, and can deliver exclusive, carefully considered solutions to help you grow your bottom line, cannot be over emphasized,” concludes Subbramoney.

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Entrepreneur Today

SME Insurance Checklist For New Year

Malesela Maupa, Head of Product and Insurer Relationships at FNB Insurance Brokers, advises SMEs to consider the following factors when reviewing their policies.

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SME Insurance

Business owners who are planning for the year ahead should not overlook the importance of reviewing their insurance policies to ensure they are adequately covered against insurable risks.

Malesela Maupa, Head of Product and Insurer Relationships at FNB Insurance Brokers says, every year businesses face unique challenges ranging from credit and market risks, technological disruptions, compliance, operational and regulatory risks, amongst others. As a matter of precaution, insurance policies should at least be reviewed or updated once a year.

He advises SMEs to consider the following factors when reviewing their policies:

  • Employee movements – if there are any employees who have left or joined the company, ensure that your policy is updated accordingly.

This type of cover normally depends on the role and contribution of the employee to the business. For instance, directors may be covered for Key Person Insurance and Directors & Officers Liability insurance.

  • Protest Actions – this year is the national election year and leading up to elections we can expect to see an increase in the frequency and severity of protest actions, riots and strikes. Thus, it is essential to ensure that adequate special risks cover is in place from the South African Special Risks Insurance Association (SASRIA).

SASRIA provides cover to both individuals and businesses against special risks like civil commotion, public disorder, strikes, riots and terrorism at affordable premiums.

  • Cyber risks – it is essential to communicate with your insurer or broker and find out if there are any new risks that your business should be protected against. Cyber incidents continue to be a major risk for businesses especially in the SME sector. Over the last couple of years there has been a major increase in the number of reported cyber incidences.

Related: I would like to start an insurance business. What are the basic guidelines?

More businesses are now facing increased cyber threats due to their increased dependency on technology, relating to their internal and customer data being compromised by fraudsters. It is therefore essential to have some form of cyber risk insurance cover and/or enhancement of data security protocols.

  • Regulatory changes – every year there are a number of regulatory changes that impact businesses directly or indirectly, which may result in fines and penalties for non-compliance.
  • Natural catastrophes – the increase in the frequency and severity of extreme weather conditions, coupled with intensifying natural catastrophes will continue to have a significant impact on businesses.

Businesses should ensure they are adequately protected against these risks to avoid incurring sever financial losses.

  • Business changes – should a business consider moving to a new location, purchasing new premises or venture into new business activities, these types of changes could have a major impact on its risks profile. As a result, the policy needs to be updated accordingly.
  • New and Enhanced products – An innovative culture has taken over the insurance industry and ever so often we see the introduction of new products or the enhancement of existing products. Get in touch with you broker to advise you on any new products that might add value to your existing insurance portfolio.

“Reviewing your policy regularly gives you peace of mind knowing that you can focus on running your business effectively, without worrying about unforeseen risks,” concludes Maupa.

Related: Insurance For Small Businesses: What Should Be Covered?

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Seven Reasons Businesses Should Promote Flexible Working

By Paul Burrin, VP, Sage People

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What hours did you work yesterday? Chances are, it wasn’t 9-5.

The world of work as we know it is changing. With new technology making it easier to work anywhere, anytime, the traditional 9-5 is effectively dead.

Having flexibility in their working schedule is now a key priority for employees, helping them to successfully juggle work and personal responsibilities.

In fact, more than 80% of 3,500 employees Sage People polled globally placed importance and value on flexible and remote working.

Valuing a work life balance has become increasingly important – whether this is to meet family needs, personal obligations or just to avoid rush hour – it is clear that giving employees increased control over their work schedule is good for employees, making it good for business.

With that in mind, here are seven reasons business leaders should be embracing the benefits of flexible working.

1. The world of work has changed

The line between work life and home life is much more blurred than it was just a few years ago.

For example, it’s now common for people to demand virtual meetings, the ability to work from home, and even have ‘duvet days’ when required, rather than having to suffer through the dreaded commute for hours every day.

Furthermore, modern work responsibilities are often cross-functional, requiring staff to interact with more  people in different time zones.

As a result, constraints on how, where and when we work should be updated to reflect this cultural shift.

Businesses must be prepared to accept that the working world has changed if they want to truly motivate and engage employees.

2. There’s a war for talent

With top talent becoming more challenging to attract and retain, many industries are facing widespread skills shortages.

This means in-demand employees can be more selective – and the desire for flexibility is a key factor.

For example, a recent study found that 54% of people would be willing to move jobs to gain greater flexibility.

Employers who offer flexible working will attract the best talent and will also be more likely to retain these employees for longer.

Related: The Business Exchange Share Secrets To Creating A Flexible Office

3. Flexible working boosts productivity

Workforce productivity has become a global issue. Our research shows that employees are typically working only 30 hours a week, which means there’s a whole day when they’re in the office, but not actually working.

What’s more, most people who work a 40-hour week feel they are productive for only 3.75 days out of the 5-day working week.

Revolutionising productivity in new ways, such as giving employees the freedom to work in the way that best suits them, could go a long way towards narrowing the productivity gap and enabling businesses to get the most out of their staff.

4. Flexible working empowers employees, and shows you trust them

Our research also found that workers want to feel valued and recognised, with two-thirds (66%) of those surveyed seeing this as the most important aspect of their working life.

For many, this is more vital than office perks like games in the office or free food.

Giving employees the freedom to work in their own way shows they are a valued and trusted member of the team. It also empowers them to perform to a high standard and be as productive as possible.

5. It supports worker wellbeing

The health and wellbeing of staff has become more of a priority for businesses in recent years, while also being increasingly vital for employees themselves.

Over a third of employees polled (39%) believe HR and people teams could do more to improve wellness at work, with initiatives such as providing fresh fruit or offering a subsidised gym membership now proving popular.

Flexible working can help in this area by reducing stress (no more mad dashes in heavy traffic), making it something companies need to pay attention to.

6. Employees want flexible working

One of the most important reasons for businesses to embrace flexible working is simply because it’s what staff want.

According to Fuze, nearly 50% of workers across all generations want to be more mobile at work, rising to 70% for those aged 16-44.

Employees want to be able to pick up their kids from school, start and finish early if they have international calls first thing in the morning, or be able to head to a doctor’s appointment without fear they may be considered to be slacking.

Businesses would therefore be wise to listen to what their employees want and respond accordingly.

Related: Closing Deals In Africa – Keep It Flexible

7. Technology has changed

The most straightforward argument for remote working is that staff simply no longer need to be in the office to do their jobs effectively.

Most workers now have all the tools they need on their smartphones and tablets, which means they can comfortably work from anywhere –  a coffee shop between meetings, their home, or somewhere they can work undistracted.

For example, cloud technology gives employees secure access to documents externally, while collaboration and communication tools enable staff to work together from opposite sides of the globe.

Isn’t it time the way we work changed to reflect these capabilities?

Ultimately, enabling flexible working should be a focus for all businesses. From aiding talent retention, to creating positive workplace experiences – which is important to 92% of people – the long- and short-term benefits could prove invaluable.

Most importantly, giving employees flexibility will result in a happier, more engaged and more productive workforce.

In an age of continuing disruption and increasing competition, that’s not something businesses can afford to ignore.

Download Sage People’s research on what employees really want from their employers.

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Entrepreneur Today

Immersive Learning To Reshape How The World Learns Using Tech

To keep up, South Africa urged to embrace this tech-type of learning or risk being left behind.

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Immersive Learning

Immersive learning will fundamentally change the way young South Africans absorb information, and forms an integral part of the learning revolution the country needs to embark on to keep up with the demands of the future.

According to Marco Rosa, managing director at Formula D, immersive learning has been scientifically proven as one of the most effective ways to learn. Formula D is an interactive experience design firm that seeks to make learning effective, accessible and fun using interactive strategies, technologies and game design principles.

He explains that immersive learning using virtual and augmented reality (VR and AR) – an interactive computer generated experience that takes place within a stimulated 3D 360 degree environment, refers to a virtual or physical environment that completely immerses a child or an adult in content in a way that allows for no distractions. It’s tech-driven, interactive and engaging and encourages a different, contemporary way of learning.  Rosa recently returned to Cape Town after presenting a talk on immersive learning at a World Forum in the Middle East. His talk touched on the future VR tech developments, mixed reality and the current challenges of the tech.

“Immersive learning needs to play an even bigger role in the way we educate the youth. It’s a lot better if teachers can virtually take kids to the place they’re trying to teach them about, instead of simply showing it to them on a piece of paper or even a screen. The saying: Tell me and I forget. Show me and I may remember. Involve me and I learn really does ring true, and is especially important for millennials and generation Z,” he says.

Related: Embracing Technology For Business

Rosa says VR is on the brink of completely transforming the face of learning around the globe in unfathomable ways. Once it becomes more accessible, especially in developing nations like South Africa and other sub-Saharan African countries, it will have the power to do the same here.

“When we reach the point where VR is ubiquitous, hyper real, and the tools for creating the content widely available and easy to use, we’ll have so much immersive and interactive educational content at our fingertips that it will change the fabric of our society,” Rosa says.

However, it’s currently not easy to create immersive learning experiences, they’re tech intensive and often quite complex, but will become easier as the concept is more widely embraced and the tools and processes to create the content become more user friendly. He says South Africa is far behind when it comes to making use of immersive learning, and the only way to catch-up is if corporate SA comes on-board.

“We can fast-track this much-needed process if the private sector gets involved. Implementing CSI initiatives and other immersive learning programmes is needed in order to develop interventions that can scale and afford everyone an equal opportunity to access this type of learning with tech. Collectively we can get it right to fundamentally change the way everyone learns,” Rosa says.

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