Exploring Property with Focus and Determination
With an early interest in rental properties stemming from a need to overcome cash flow issues, Activate director Nhlamulo Ngobeni has his sights set on building up a profitable portfolio of quality, affordable rental units.
After graduating from the University of Johannesburg with an M.Arch in 2014, Nhlamulo reviewed his financial situation during his first job working for a large practice. He also sought the advice of senior architects within his sphere. He says, “I realised I was on the wrong bus and needed to catch a bus in a different direction if I wanted to succeed financially.
“I love architecture and never wanted to study anything else. I’m passionate about designing buildings and spaces. I took up reading around personal finance and came to the conclusion that property is a more secure and stable investment. The big drive initially was to solve my financial issues relating to cash flow from month to month, but I have since become interested in how to finance projects creatively, and in developing my own properties.”
Part of Nhlamulo’s research indicated that, out of 100 people, 90% are likely to live in a city at some point; and the majority will then remain in the city. “Sometimes it’s best to position yourself where there is more flow through, in areas where people arrive and need affordable housing like Braamfontein. It’s about understanding and mastering the game.”
His first property was bought in 2015 in Arcadia for R470,000. “I was familiar with the area and understood the prices well. I rented out to tenants and was making about R1500/month from the first month. I went into the market looking at student rentals, but to date have mostly young graduates on my books. For the time being, I let and manage the properties personally. It has been a very successful model and I have had very few vacancies. I take maintenance seriously, so I have happy tenants who feel comfortable to inform me of any issues immediately.”
Commenting on current trends, Nhlamulo observes that student accommodation is a very attractive market because more South Africans believe in formal education than ever before, so there is an influx into urban areas.
He adds that only UCT can service more than 60% of its students’ demand for accommodation, which opens up a big opportunity for private investors to assist in this space. He adds, “Activate has been tremendously supportive of my property investment activities, and I try to limit management of my properties to after hours and weekends. My growing experience in the affordable and student housing sector is something that I want to contribute to the practice. I have learnt a lot about property – for example, that people like their privacy and are often prepared to share a living space but not a bedroom. This knowledge also helps to inform my design decisions as an architect.”
For young people who have recently graduated, Nhlamulo has the following advice. “Firstly, if you decide to move into the property sector, I recommend living below your means. I bought my first property before I bought my first car because it’s easier to get financing for a car, so I decided to tackle the toughest objective first. Secondly, and very importantly, protect your credit record – if it gets dented, it can cost you dearly and be hard to repair. Thirdly, seek advice from people who have walked the journey and have succeeded to be where you want to be. “And finally, before you get into a deal, make sure you understand the pros and cons financially. Disconnect your emotions from the deal and you will be more likely to make a wise decision. Remember that your investment must perform immediately, to overcome your money challenges today, not tomorrow. Also, don’t judge a property by your own aspirations and tastes, but make sure that you respond to market demand.”
As Nhlamulo attests, in an evolving and dynamic market, it takes courage and commitment to reap the rewards of a focussed vision.
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