Est. 2015 · Prosperity
Plain-English definitions of the terms serious South African property investors need to know, from access bonds to net yield and trust structuring.
An access bond lets you pay extra into your home loan and withdraw it later. It is a flexible buffer that reduces interest while keeping your cash available, and is a key portfolio-growth tool.
The process of applying for a home loan through an originator who submits to every bank at once and negotiates the best rate, at no cost to the borrower.
The legal transfer of property ownership and registration of the bond, handled by a conveyancing attorney at the Deeds Office.
A structure where a company holds the property and the company shares are held by a trust, combining limited liability with asset protection and estate-planning benefits.
The annual rental income from a property after costs (rates, maintenance, vacancy) divided by the purchase price. It is the number that tells you if a deal actually cash-flows.
The rate at which the South African Reserve Bank lends to commercial banks. It drives the prime lending rate and therefore your bond interest rate.
Setting up trusts and companies to separate ownership from control, protect assets from liability, distribute income tax-efficiently and plan your estate.
A variable rate moves with the repo rate; a fixed rate is locked for a period, usually starting higher. Many investors keep it variable and use an access bond for flexibility.
The number of vacant months your cash flow can absorb before a property costs you money. A core input into any buy decision.