Successful property developer, Pieter Smith, bought his first property at 20. Pieter’s long-time agents, the van den Berg brothers of Just Property Prosper in Cape Town’s Northern Suburbs, asked him to share his thoughts about property investment.

After matriculating in 1997, Pieter was awarded an engineering bursary but didn’t take it up. His parents advised him that he needed to go into property if he wanted to do well financially. His mother was in property sales and his father was a contractor and developer, so Pieter had “a bit of a feeling for property”, so he started as a real estate agent at 18.   

“The agency threw me in at the deep end, and I am ever grateful to Lubba Allen, who gave me a chance.” He bought his first property in Oak Glen, Bellville, two years later. At just 20 years old, when he applied for the bond, he had to get permission from the Master of the High Court!

In 2003 - just five years after he left school - Pieter started his first development, the 106-unit Four Seasons, in Arnold Street, Strand. Since then, he has completed over 70 developments totaling around 8 500 units.

Q: How extensive is your portfolio?

A: Currently, through various entities, we own about 206 units in rental stock and an additional +/-  900 units, which are in various development stages, as well as some 11ha of industrial land.

Q: What are your thoughts on property for generating generational wealth? 

A: Over time, it is the best and easiest way to make money.  The key to success lies in timing – don’t rush things and accept that while some may get lucky, it’s best not to look for get-rich-quick schemes.

Q: What is your best advice to youngsters who dream of building a property portfolio? 

A: Work hard to put down that first deposit in your mid-20s. Then aim to add a property every 2nd year, giving you a sizable portfolio over time with limited risk.

Q: What do you think prevents people from owning their own property?

A: It’s a mindset. People think they can't afford to buy, but they can. The problem is they want more – so they rather rent a better property than what they could buy or afford for the same monthly payment. People are unwilling to sacrifice in the short term, whether on a monthly payment, luxury, or holiday.  Once they are in the rent trap, it becomes tough to own their home.  

Q: So, what sector or band should new investors look at?

A: There is never a single correct answer. In 2008 everyone thought retirement or storage was the way to go. In today's economy, in my view, the market above R3,5-million is more robust. Others would say student rentals.  There’s never a right or a wrong answer – sometimes you’re lucky, and other times you must sit out the bad times.

Q: Is gearing the magic wand some say it is? 

A: Gearing can be suitable while interest rates are low, but as we’ve seen, low rates can’t be guaranteed.  So yes, you can make money on the bank’s money, and all can be good while we are at 7 or 8% levels, but suddenly, prime is at 10.75 … I don’t think that’s favourable for gearing.

I view deals differently today compared to 20, 10, and even five years ago. I used to be very keen on taking a chance, but my children are 1, 9, and 12 this year … Everything in life comes with some risk. I prefer to have manageable risks should anything go wrong.   

Q: Where would you advise a first-time investor to look for property? 

A: The key is not to be emotional. If you buy with emotion, then you will lose out on good deals.   Keep an eye on areas close to public transport, in the low to medium price bracket, where properties attract a variety of tenants, from students to young professionals. Generally, yields are better there. 

Q: What is your advice to anyone trying to decide on a career? 

A: Ultimately, you must do what you enjoy and have fun. If your work is no longer fun, take a break and reconsider why you are doing it.

Q: Finally: what do you advise investors to look for in a property agent?

A: I enjoy working with Just Property Prosper because they know their product and the process and go the extra mile. I know I can rely on Johannes, Pieter, and Hendrik van den Berg – they have bought and sold properties themselves and are good at managing expectations. They’ve built a passionate team that gives excellent client service. I advise you to sit across from your agent’s desk and ask them what their values are or check out what they say on social media.

Take the van den Berg brothers at Just Property Prosper; you’ll find Johannes in a Facebook clip saying all sorts of things about enthusiasm and marketing experience, but what sticks out is his pride in his honesty, perseverance, and genuine care for his clients. Pieter’s service excellence and passion for creating wealth through property echo what my parents told me years ago.   Hendrik is a team player who sees himself as a “property surgeon” and a team player who takes a long-term view, like an endurance athlete (which resonates with me because I’ve just done my first Iron Man).

You also want to look at the team your property professional relies on. The van den Bergs have built a team that is completely dedicated to service excellence. Look for that.

I’m not surprised to hear that their team walked away with seven prizes at the recent Just Property national awards evening, including the Franchise Champions Award for Overall Performance. Congrats, guys!                                                                                                                   

For more information on Just Property please visit www.just.property or call (087) 004 0149

Follow Just Property on Facebook https://www.facebook.com/JustPropertySA/