Property investment is still the simplest and, in most instances, the securest form of investment available to the man-in-the-street.

So says Jason Lee, the author of Making Money Out of Property in South Africa, who adds that bricks and mortar will always retain a certain value but this cannot be said of the paper shares of the Securities Exchange (as recent events have shown only too clearly).

Lee emphasised that:

1. There are no barriers to entering the property market and no special qualifications or pre-entry papers are required. You do not have to be a rocket scientist to understand property. However, it is essential always to do your homework thoroughly before making decisions.

2. You do not need large sums of cash - provided you are earning a salary that enables you to qualify for a second bond and, if this is not available, it is often possible to obtain the necessary funds from the private equity world, which in good times and bad, maintain its faith in property. Most, said Lee, will usually be helpful if you start small with a not-too-ambitious investment and present a well-considered business plan.

3. It is important to study the market and catch the "waves" at the outset, whether they be in residential, commercial or industrial property. To do this it is necessary, once again, to watch the market closely, ask the relevant questions and study the property cycle statistics.

4. It is possible to work on and build up a property portfolio while holding a job because your property work can usually be done in the evenings and in your spare time.

5. Expert advice is available from accountants, lawyers, bankers, tax consultants, agents and others to help you avoid mistakes and make rational decisions.

Lee said that he himself had kicked off with a R400k bonded investment on a small home which, after an elementary, inexpensive upgrade, he was able to resell at double its purchase price. From then on he just kept going.

"If one studies the wealth creators of this world, you will note that they all have property portfolios – which should make you think," said Lee.

Lee, a lawyer by training, is about to publish a second book, this time setting out how to retire early as a result of sensible property investment.

www.property24.co.za

06/01/2009