Thanks for dropping by Safe Investing South Africa. I am on a journey to build wealth my way. For any questions or comments, feel free to contact me.

25 Apr 2013


I don't make any money with this blog. Maybe not yet. What gives me joy is when someone says it has changed their lives and made them better at taking care of their finances. I got such an email this week. Such emails keep me going, honestly.

Hi there. Thank you for your blog - hubby and me have decided to start learning all there is to know on investing etc. We are not so young anymore (I'm 35,and hubby 40) and due to bad financial decisions in the past we need to start planning for the future ASAP. We have so much to learn as we never bought property before and investing in unit trusts, etc is very new to us! But I am on every site I can find on investing, wealth growing tips etc - one have to educate herself in order to make good (better!) financial decisions. I still want to read on some of your articles. Just wanted to thank you for putting it out there - so we newcomers can learn!
 I wish you all the best in what you are doing S. Its never too lat to start. The best part of this personal finance journey is the beginning and consistency. Never give up on your dream of financial independence. It DOES get easier with time.
And thank you for making my day.

You too can ask me questions or send comments by clicking here.


Before dwelling on a few of many landlord mistakes I made throughout my property investing journey, I want to apologise for the silence. I am so busy with the remodel/ renovations of a rental duplex. I am crazy excited about the whole renovation, like a kid in the candy store. We live on site, which MrSISA and son find to be inconvenient. Meanwhile, I feel like an adventurer in the bush. This is the closest I can get to camping. We have no kitchen and I cook with a hot plate just like I did at varsity. And we are not restaurant people because I am extremely particular with what I eat. The renovations are quite pricey but the returns are worth it in my opinion. We are re-doing both bathrooms, the kitchen, the patio and all floors. I am planning to give the staircase and all bedroom closets a facelift by a lick of paint and changing the handles.
Duplex Renovations

Back to bad landlord mistakes I made.

I am now busy undoing what I paid for only two years ago. I got a highly experienced guy to renovate this very duplex in my absence. I didn't know the guy but my friend did. So naturally I had my friend hire and manage the guy and the project. A lot of bad decisions were taken (not that I would have made better decisions). This guy knows how to do a great job but decided to do a VERY shady job in the place. The tiling was below mediocre. I had to chase him away with my money and a job half done. I couldn't risk having a lot more work to undo. For two years I had this duplex off the market and used it as a holiday home because we had no time to take care of it and needed the place where it is. So we decided to have a working holiday in it for two weeks to have it properly fixed. That's the reason we live with all this dust and clutter. Yes, we could have gone to live in the hotel, but I don't see any sense in that expense.

The landlord mistake I made is renovating from a distance without a proper brief, contract and plan. That cost me a lot of money and a friendship. No use crying over spilt milk, I have to fold my sleeves and work.

When getting a tenant for a smaller duplex, I went all emotional when a single mother was desperately in need of the place. She had a decent salary but I ignored her trail of problems. One landlord mentioned how single mothers are a huge pain. I disagreed with her and still do. I think, like the rest of us, single mothers are not the same. But unfortunately for me, this woman was in a serious financial situation. She started having excuses after excuses. Needless to say we agreed to part ways. She left with some of my money. But all I wanted at the time was my apartment back to collect rentals. This was the first ever time that I had someone miss a rental payment in my 11 or so years as a landlord.

The mistake I made was to do a rush job at screening the prospective tenants, after doing a great job of marketing the place. I sometimes forget that this is business and not an emotional venture. This tenant obviously had her priorities crooked. She had a great job and was by no means a charity case. I need to toughen up a bit.

My property manager has been with me from the beginning. He is OK for me. I have written about him here before. I tend to trust him to take the right decisions. My motto is that "if things break, please fix them immediately. I don't want the tenants to suffer. Don't try to get hold of me when a tenant has no stove." Indeed my property manager does just that, except, he fixed one stove 3 times. The cost of fixing this stove was close to the cost of a new one. Fortunately for me, I managed to find out that the stove broke again before he had a guy fix it. I called him and politely asked him to buy a new stove. Happy tenants stay longer.

The mistake was that I failed to micro manage my manager. It does sound odd but there is nothing passive about property investing. You will always be hands on. But my manager is great in many other ways.

Similar to the mistake above, I assumed that my manager understood the property laws. I am lucky in that, I decided to do a Masters in Real Estate and have a good understanding of South African property laws in general. This is definitely not necessary for one to be a property investor. I just have an interest in real estate. When stuff that belongs to the body corporate broke, my manager went ahead and fixed them. I have been pointing him to the Sectional Title Act and I must say its been a learning curve for both of us. I realise that most real estate practitioners know zilch about the SA real estate laws. Its horrifying. So a landlord has a responsibility to learn about the laws that govern his investments.

When I was on to buy property number 3, a charming real estate agent told me all there is to know about the property in question. It didn't hurt that she was a pretty French girl. She was climbing up and down the stairs in an impressive way. Except, most of the details were WRONG. She mentioned 160 square metres when the property was 126. She enticed me with the spot to put a swimming pool when its actually against the Sectional Title Act and the space in question has some servitude conditions. Off course I had an apartment already but knew nothing about the Act and servitude.

What gives me comfort is that I would have bought the place even if I was told the truth. Just DON'T take your estate agent's word. It may be very dangerous. Do your own research.

I can go on and on and on. These are only a few of the landlord mistakes that I made in my property investing journey. I have grown from each of them and forward I move.

24 Apr 2013

Monthly Spending and Budget Report-March 2013

To those new in this blog, This is my personal finance journal where I track my monthly spending. My goal for 2013 is to spend 60% and invest 40% of our income in order for me (and hubby) to retire comfortably in our early 40s.

I am very busy with the renovations of one rental unit, hence the silence. This is very costly but a story for the next post. How amazing is it that we lived on a mere 20% of our income in February. And yes we did double that to spending 40% of our income in March. But whats great is that we are still below our target budget of 60% spending and 40% investing. I am quite impressed with us, especially given the fact that we traveled a bit.

Our March 2013 monthly spending and budget report:

Real Estate 17%
This is nicely toned down. I love it. 25% wouldn't be bad.
Personal Income 82% 72% We are working on growing other income streams to bring this lower and thus diversify risk.
Interest/ Dividends 1% 1% Our emergency fund has been reduced. Interest will be low. But we expect dividends to fill the gap..
Online Income 0% 14% I received a small cheque and deposited it last week. It takes about 6 weeks to be cleared.
Other 0% 0%
One thing that makes me unhappy is that the interest on my Emergency Fund is 4.65%, which is below the inflation rate. I took some money to the stocks in January.

Real Estate 10% 7% Wish this would stay his low a contribution to total income.
Transportation 0% 1% We live closer to Mr's work and I hardly ever drive.
Online 2% 1% Laptop was fixed
Internet/ Phones 1% 1%
Consumer 10% 3% Mainly food
Credit Card, Cash & Fees 7% 4% We used the Mr's credit card and paid it off over 50 days spread.
Giving 3% 2% This should be at around 10-12%. It will even out during the scholarship payment months.
Life Insurance 1% 1% Fixed
Net Income (Left to Invest) 61% 80% We didn't pay most of it to our homeloan like we usually do. We are using it to revamp one rental unit to hopefully get a decent rental. Thats one month delay in our mortgage pay-up plan. I no longer top my Just Invest (Nedbank) interest up.
We lived on just below 40% of our income in March (comparing to 20% in February). Our Net Worth grew by a tiny margin. Thanks to the misbehaving JSE. Being a newbie in stocks doesn't help either.

  1. MAIN GOAL: net worth growth by at least 25%.-- 7.8% so far.
  2. BUDGETING: invest at least 40% of income.-- 75% so far.  
  3. EMERGENCY FUND: 3 months worth of living expenses.-- DONE.
  4. GIVING: give of more than 10% of income.--5% so far.
  5. REAL ESTATE: Construct at least 4 flats/ increase the rental income by 30% .-- not yet.
  6. MORTGAGE: Pay up our home .-- not yet.
  7. STOCKS AND DIVIDENDS: Get at least R12,000 in dividends.-- not yet.
  8. EXTRA INCOME: Online income to R8000 per month by December 2013.-- +/-R3500 January.