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8 Mar 2013

MY LEVY INCREASES

Before I dwell on my increasing levies and property cost inflation, let me be a bit personal. My decision to keep track of both my and Mr’s financial comings and goings is proving to be a pain. That’s the reason my reports are almost always late. We have a very different way of handling administrative stuff. We never do the joint accounts and things like that that other couples do. But we know exactly where each other’s income goes, and it works like a dream. Except for when I have to track his transactions, like I do mine. In time I will get an easier way to do all this.

I’ve also been a bit scarce because of the plans I am working on for the medium term. An expansion of my tiny online business is in the cards. So is student or young professional accommodation. I just don’t have much to say about the latter, as it’s still early days. I will draft a separate blog post later today on these.

Today is a small rant day. Prices of everything are just climbing up high all of a sudden. I am in shock at how property costs are climbing up. And, especially because I can’t inflate the rental at the same pace percentage-wise. I take pride in charging slightly below going rates in rentals to retain my great tenants. So these hikes in property costs are pinching a bit deeper than the surface for me. But I’m not complaining, I have it far easier than most people. And I am grateful and try to pay it forward in many ways by making someone’s life easier through setting my tiny scholarship programme and charity work.

February seemed to be the month full of such bad news. This is one of the letters I received:
LEVIES
The Directors discussed the budget of the HOA in detail and presented it to the Annual General Meeting on 14 November 2012. The budget was approved by the meeting.
The levies as from 1 March 2013 will increase from R650.00 per month to R765.00 per month”
Did you notice that the levies increased by 18%. I just stopped myself from making a big fool of myself by complaining because in July last year we had the most exciting letter that:
“During the recent meeting of the Trustees, the budget of the HOA was discussed in detail. It gives great pleasure to announce that the Trustees resolved to decrease the levies from 1 July 2012 as follows… “ 

I went ahead and wrote about my shock here... Its true that what goes down will eventually go up. In real terms we had a reduction in levies as the current increase is a mere R115 in comparison to the R136 drop we enjoyed in the large part of the past financial year. Sometimes I feel these decisions are taken by people looking at their personal pockets…JOKING.

My point with all this yada-yada is that, when your property costs go down, don’t be short sighted about rental rates. Continue to evaluate the market to see the reasonable rental rates and increase (reduce) rentals accordingly. Don’t be like me and be merry, and think you will just look at it the following year. Then you get slapped by 18% increase in costs, which you can’t share with your tenant. In my defense though, my tenant agreed to pay a little more with the costly security measures I put in place last year. I wouldn’t increase again, even though my neighbours’ tenants pay a lot more. I like to retain a happy tenant and avoid a costly high tenant turnover.

Hope your passive income from investments is going great, or your debts are dying a fast death.

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