Living Zimbabwe

Tag: real estate

  • The importance of house or stand price, suburb density and other factors in fulfilling your real estate dream in Zimbabwe

    The importance of house or stand price, suburb density and other factors in fulfilling your real estate dream in Zimbabwe

    A miss is as good as a mile. A situation in which you manage to buy a house or stand for sale somewhere at the backyard of the property market when the initial dream was about one in Harare North’s affluent Borrowdale Brooke will never cover up for the fact that you failed to achieve what your heart fondly desired from the word go. The heart is very honest it will never take a consolation as the first prize or a second best as the best. Its therefore, wise to know about what critical factors that can be involved if one has plans for fulfilling long cherished dreams of owning property in a suburb of choice. Remember the tenets of success will never make special adjustments for you. Those who build aeroplanes had to make them round without sharp edges because they had to comply with already existing principles of aero dynamics. You too in like manner must acquaint yourself with important factors about real estate so that you comply and avoid living a life of regrets. Here are some few but important of these factors that are pillars for your quest to achieve your real estate dream .

    Suburb Density

    Suburb density is basically about the average size of stands in a particular suburb. Sizes less than 300sqm are considered to be high density, those between say 400sqm and around 700sqm are considered as medium and all sizes beyond 700sqm are low density. Its important to know about suburb density because there are some aspects of real estate in Zimbabwe that are density or area specific. A good example of these are title deeds and price per square meter. About title deeds you should know that the greater percentage of properties in low densities have title deeds as compared to high densities and I believe that the major reason why this is so is the issue of past policies of segregation that where calculated to ensure that those who stayed in high densities would never access economic empowerment available through the avenue of collateral security. In terms of prices you should know that low densities are cheaper in terms of price per square meter as compared to high densities simply because purchasing in low densities is more like wholesale buying whilst in high densities it is retail.

    House or Stand Price

    Guess what, the reason why knowing house prices is important, is something very simple yet the price issue can be a very complicated affair for many a property investor. You should know prices because you need to have a correct budget. But many aspiring investors are unaware of the fact that property prices are greatly influenced by the immediate location such that you can never determine a price for your budget by comparing a house in suburb A with a similar one in suburb B. You cannot compare an apple to a banana. Unfortunately, many using this flawed method end up with wrong perceptions of price and of course to the detriment of their budgets. If you want a house in Borrowdale your unmistakable price guide are the prices of similar houses that where recently sold in Borrowdale. Never compare Borrowdale with Mnt Pleasant, Borrowdale is Borrowdale and Mnt Pleasant is Mnt Pleasant.

    Supply and Demand

    Supply and demand is an economic principle well known by many yet many still need to be educated about it but with a special focus on its impact of the Zimbabwean property market. After economic challenges of the past fifteen years there are certain residential stand types that are now out of stock so buyers have to make do with what is there. Good examples are 1000sqm stands like those in Westgate Adylin in Harare West and vacant 300sqm stands within established high density suburbs like Glen View. Besides the economic subsidence another reason why some of these stands are out of stock are local government by-laws that prohibits the sell of undeveloped stands in municipality projects. So subsequently, these supply side shortages may cause the prices of the best alternatives to sour despite the expectation that they should drop because of liquidity challenges in the economy. The take home lesson for investors in light of these things is that the reality on the ground is dictating that they should accept new stands at the periphery of the capital city as long as they are serviced to an acceptable level and have legitimate papers .

    With the rise of the so called “land barons” who are property fraudsters an inability to verify the legitimacy of papers is blocking many property investors from achieving the long cherished real estate dream. The issue of buying property in special cases like deceased estates and when a seller is ill is also another aspect a serious property investor should be thoroughly aware of. Indeed these are very important topics however, one cannot cover everything in a single article the reader is therefore, at liberty to visit my blog propertymattersnews.blogspot.com for a more comprehensive experience involving a diversity of topics that are covered by over sixty articles.

    DISCLAIMER : THIS ARTICLE DOES NOT REPLACE THE ADVICE ONE SHOULD GET FROM HIS OR HER PROPERTY ADVISERS.

    This has been a submission by Cain Ndhlovu.
    You can connect with Cain Ndhlovu via the following: https://propertymattersnews.blogspot.com, https://twitter.com/cainndhlovu, https://www.facebook.com/propertymattersnews/.
    You too can become a Citizen Journalist by submitting your story here: Citizen Journalism by Living Zimbabwe
    The views expressed in the article are those of the author and not necessarily Living Zimbabwe.

  • Financial consequences of purchasing property from a seriously ill seller in Zimbabwe & other purchases to avoid

    Financial consequences of purchasing property from a seriously ill seller in Zimbabwe & other purchases to avoid

    Questionable contractual capacity of a seriously-ill seller

    In Zimbabwe purchasing property being sold by a seriously-ill seller can be dangerous so it must be approached with great caution. If the seller heals, armed with medical records he can rise from the death bed with a backlash and claim that when he sold, he did so with a state of mind that was not suitable for such a critical undertaking. This argument holds water and justice will demand that it should be taken seriously but for the purchaser it means another extra cost because of unexpected legal expenses.

    Bad debt

    Using a loan to purchase a property can later be regretted. When considering a mortgage its important to bear in mind the essence of this which is that the purchase should be able to service its loan obligations through rental proceeds from tenants. This allows the mortgagee to ease pressure on his or her income thereby enabling it to satisfy other financial demands like bills and tuition fees. But if a mortgagee moves into the new premises as owner-occupier this will in-turn put pressure on their income and tie them to their jobs. Such a situation will later haunt the purchaser as he will be unable to move on to other opportunities or go after other pursuits that need funding because job security will take priority ahead of anything else.

    Hidden defects

    Signing agreements of sale without first conducting a thorough inspection of the intended purchase can have adverse financial consequences tomorrow when you discover defects that where hidden from you. Serious defects that cost much are those that compromise the structural integrity of the property meaning to say depending with their state they can qualify the property as a demolition candidate. You will be forced to incur unexpected costs as you go through extensive renovations. The most unfortunate thing however, will be that your situation would lack legal merit in order to claim compensation since the signed agreement would carry a so called voetstoots clause that says,” The property is sold voetstoots (as it is) and the seller shall not be liable for any defects patent, latent or otherwise in the property nor for any damage occasioned to or suffered by reason of such defect.”

    Image from goafricahealth.com

    This has been a submission by Cain Ndhlovu.
    Has been blogging about property on Property Matters News for 5 years.
    You can connect with Cain Ndhlovu via the following: https://propertymattersnews.blogspot.com, https://twitter.com/cainndhlovu, https://www.facebook.com/propertymattersnews/.
    You too can become a Citizen Journalist by submitting your story here: Citizen Journalism by Living Zimbabwe
    The views expressed in the article are those of the author and not necessarily Living Zimbabwe.

  • Zimbabwe’s 2017 house prices a rags to riches story

    Zimbabwe’s 2017 house prices a rags to riches story

    The state of the property market is a reflection of the economic path the ambitious Zimbabwean take from being a peasant to a wealthy person. An analysis shows that we all belong to four market segments namely the high, medium, transitional low and affluent low densities. The high density ( house prices $20 000.00 [core house] – $50 000.00 e.g Warren Park, Highfield ) is home to low-income earners most of whom informal sector sole traders and vendors earning below the poverty datum line of $400.00. The medium density (house prices $55 000.00 – $100 000.00 e.g Mainway Meadows, Southerton ) is home to the middle class usually junior managers and small size business owners employing few people. Transitional low density (house prices $100 000.00 – $230 000.00 e.g Good Hope, Mandara, Prospect) is where individuals can transition from the medium density to the affluent low density. In the transitional low density, you are likely to come across newly promoted directors of larger enterprises and medium size business owners who would have managed to grow their enterprises from a smaller size operation. The last but not least is the affluent low density namely the Umwinsidale, Borrowdale and Glen Lorne of our days. Here you find the elite, the movers and shakers in politics, industry and commerce. The cheapest house here is around $240 000.00 whilst the most expensive can be almost a million dollars!

    Many of my clients who have transitioned from the high densities to the lower densities over the years found it best to take it one step at a time. This means that they moved from the high to the medium and then from the medium to the lower densities instead of jumping from the high densities and going straight to the affluent low densities. So one can ask “If I manage to get a lump sum of $240 000.00 why can’t I just go straight to the affluent low densities and buy a house in Borrowdale? ” Well with property its not only about the asking price which is the money required by the seller but it’s also about extra costs that come over and above the asking price. Extra costs are in two forms; there are those directly associated with the purchase of the property like name transfer fees and there are those more like running expenses that are incurred as you use the property like municipality rates. After acquiring the lump sum one should first remember that the stomach will always demand that you eat and the kids will need to go to school. Therefore, there should always be a good monthly income that is able to meet the basic needs of life together with the higher costs of being a resident in the affluent parts of the country. Let’s take a look at the extra costs.

    Name transfer costs

    In my nine-year real estate career I have observed that many aspiring property owners do not know that over and above the asking price on the property advert, there are additional name transfer costs that are determined as a percentage of the purchase price. This percentage can be approximately 7% which means over and above the cheapest price of $240 000.00 one will pay $16 800.00 in order to have the property’s ownership legally transferred to his or her name. This will bring the total of the money coming out of your pocket to $258 000.00 excluding bond registration and valuation fees if you are using a mortgage. A good monthly income can help you out so that your dream is not abandoned by facilitating payment terms with the legal practitioners responsible for the transfer.

    Municipality rates

    The municipality provides services like refuse collection, sewer and fresh water supply etc which must be paid for by residents irrespective of whether or not these services have been satisfactorily provided by the former. In affluent areas, municipality rates are the highest because the valuation method used to determine them is based on the reasoning that there is a correlation between rates and capital value of the property. Since property values in affluent areas are high the rates there are also high in line with the value of the area.

    This article was written by Cain Ndhlovu of https://propertymattersnews.blogspot.com. Visit this site to know more about property.

    This has been a submission by Cain Ndhlovu.
    My passion is writing about property.
    You can connect with Cain Ndhlovu via the following: https://propertymattersnews.blogspot.com, https://twitter.com/cainndhlovu, https://www.facebook.com/propertymattersnews/.
    You too can become a Citizen Journalist by submitting your story here: Citizen Journalism by Living Zimbabwe
    The views expressed in the article are those of the author and not necessarily Living Zimbabwe.

  • Rethinking The Title Of Your Property In Zimbabwe

    Back in the infamous Zim dollar days, everyone wanted to put their property into company names. This way, the buyers avoided transfer fees and the sellers avoided paying capital gains tax. There were other reasons too, but these are probably too shady for a reputable agent such as myself to know about…

    It now seems that there are more disadvantages to owning a property in a company name than the financial advantages of transfer fee avoidance for your future, potential buyers. I have listed some of the points below, but by no means is the list comprehensive:

    1. The myth of not having to pay capital gains tax on the sale of a property owned by a company needs to be debunked as soon as possible. The sale of shares of any description is liable for a 20% capital gains tax. You may be able to find a clever account to perform some creative accounting to avoid the tax, but somewhere down the line these loop holes will be closed and you will be liable for the tax.

    2. If you are over 55 years old and the property you are selling is your principal primary residence (your home, in layman’s terms!), then you may apply to ZIMRA for Capital Gains Tax exemption. If the property is in your name, then it is much easier to explain to ZIMRA that it is in deed your home and you are eligible for the exemption. If it is in a company name, then there will be all sorts of questions and at the end of the day, you may not get the exemption, as a company can’t have a home, because although a company may be a legal entity: it does not need to sleep somewhere!!!!

    3. If the owner of the house was to die, the family would not have to pay death duties on the principal primary residence (yes, the home), but only if the property is in the deceased person’s name. If it is in a company name, the Master of the High Court will demand his pound of flesh, at the most vulnerable time in the grieving family’s life. The last thing you need is trying to find money for the death duties on your home when you have lost a loved one.

    4. There is the ever present fear of the 51% indigenisation bill. Personally, I don’t see this reaching as far a shelf companies which own houses, but then I am the eternal optimist and this is Zimbabwe, so anything goes, and generally the more unexpected the more likely the event will occur. (What a conundrum that is!)

    5. The last point, which comes to mind is the fact that most banks will not loan you money to buy a house in a company name, and so as a buyer you will still have to pay transfer fees to put the property in your name. This whole process thus defeats the reason for the company name and the proposed transfer fee avoidance. Banks are also reluctant to lend you money against a property in a company name. This is because ownership of the company can be transferred without it affecting the change of ownership on the title deeds.

    My advice therefore, is to put your own home in your personal name. If you buy and sell properties as investments then I don’t think it matters which way you choose as you will be selling it on. But remember even if you put it in a company name, you will probably still have to pay tax on the shares. The very best way to avoid this is by putting the property into a trust…I’ll explain this in the next blog!

    For more advice contact me at nicky@pageproperties.co.zw

    This has been a submission by Nicky Versfeld. If you have something to share, you too can become a Citizen Journalist by submitting your story here: Citizen Journalism by Living Zimbabwe.

  • Our Fiduciary Duty to YOU The Public

    Our what? Exactly! Who even understands big words like that? Not many, but it is my job to understand, and explain it to you so that you know what is expected of someone who presents themselves to you as an Estate Agent.

    Estate Agents in Zimbabwe are controlled by a very strict set of conduct rules that most of the public are completely unaware of.

    When one becomes registered as an Estate Agent in Zimbabwe, they have had to have had at least 3 years practical experience in the industry and pass a rigorous set of exams. The most important of which is Estate Agency Practice. This covers all the legal aspects of property sales and rentals, as well as an Estate Agent’s Duty to the Public.

    I have listed below, in English, not legalese, what you not only can expect, but must demand from your Estate Agent:

    1. An agent must put the interests of his client above his own at all times, and must treat the business dealings of his clients as well as he would treat his own, if not better. This means that you can and should demand confidentiality at all times from your agent. He should never try to purchase or lease your property himself, without having first made it very clear to you of his personal interest.

    Any Estate Agent is obliged to offer you advice and professional knowledge about the industry, regardless of whether you employ his services. (Much like a doctor is obliged to save lives even if they are not his patients!)

    2. Agents should not defame other agents, or treat them in a manner that is inconsistent with fairness, courtesy and professionalism.

    3. Agents should not tout, i.e. should not try to canvass for business by door to door calling. They should not approach you if your house is on the market and ask to sell it. So many people don’t realize this and an agent will call them and say, “I have a buyer for your house, please can I bring them around?” If the property is with another agent then you should tell the caller, that they must go through your appointed agent. Sellers can get themselves into all sorts of trouble when allowing a non mandated agent to sell their property as they will be liable for the mandated agent’s commission, even if that agent did not sell the property.

    4. Agents should not pose as buyers to illicit information from sellers or other agents.

    5. Money held in an agent’s trust account does not belong to the agent, and under NO circumstances is that agent allowed to use the money for the running of his business or personal expenses, (not even bank charges!) The agent should not move any money in the trust account out of the account without the written permission of the owner of that money. The number of cases that exist of agents “borrowing” money from the trust account and never repaying it, is quite frightening.

    The deposit paid for a rental property belongs to the tenant until the end of the lease, and at such time the money will either be returned to the tenant or used to repair the property and pay outstanding bills.

    At any stage that you have money in an Estate Agent’s trust account, you can and probably should ask to see a statement. All rental properties should have a monthly statement of their account forwarded to the owner and tenant, if the tenant requests it.

    If at any stage, you feel an agent is not fulfilling these obligations, you can report them to the Estate Agents Council, and the matter will be taken up by them. If you have been unfortunate enough to lose money from an Estate Agent’s Trust Account, the Estate Agents Council has a Compensation Fund, which all agents have to pay money to each year, so that the public can be reimbursed for their losses. Bet you didn’t know that…I am letting out all the secrets today, aren’t I?

    But remember, you have the right to expect the best from the person you are entrusting with your most valuable possessions, so don’t settle for less…

    Visit my website for more on property www.pageproperties.co.zw

    To read more articles like this visit my blog http://www.pageproperties.blogspot.com

    This has been a submission by Nicky Versfeld. If you have something to share, you too can become a Citizen Journalist by submitting your story here: Citizen Journalism by Living Zimbabwe.