Good time to get off the grid

RISING municipal costs and electricity blackouts are pushing homeowners to think outside of the box when meeting their commitments.

Propell operations manager Mandi Hanekom said Eskom’s warnings earlier this month that the power utility would be implementing rolling blackouts in light of the collapsed coal silos has prompted sectional title schemes to consider installing power-saving devices.

Also on the horizon was the widespread installation of prepaid electricity meters so that residents and homeowners could monitor and control their power usage more efficiently.

Adding to the melange was data released in the South African Property Owners Association (Sapoa) rates and taxes report indicating municipal rates and taxes had doubled in the past decade and represented an ever-increasing slice of operating costs.

While the research considered commercial property, there would have been a corresponding hike in residential property taxes.

Sapoa chief executive Neil Gopal said it was an issue fostering considerable concern as the growth in rates and taxes had tracked 2.5 times the inflation rate. Rising operational costs were thus threatening the sustainability of net returns across the commercial and industrial property investment spectrum.

Hanekom said installing equipment like solar panels or heat pumps to heat water in units, solarpowered outdoor lighting, movement-activated lighting in the common areas of sectional title developments and other energysaving devices would control the electricity consumption and boost property values in the scheme.

Solar panels and heat pumps saved around 40 percent on the electricity bill while reducing the scheme’s environmental impact.

“Everyone is feeling the need to save money, but if you live in a sectional title scheme, it relies on getting everyone to agree to it and the management of the scheme implementing the project,” he said.

Once the loan was repaid, the saving would assist the scheme’s cash flow, reducing the need for future levy increases or special levies for other projects by building up a reserve fund.

Gopal said putting the increases into perspective, the total operating costs for commercial properties this year averaged R47/m2 of which R11.60/m2 went to municipal rates and taxes. However, in 2 000 those taxes accounted for R4.93/m2 mean- ing they had doubled in real terms in the past 14 years.

These statistics could add another dimension to the property adage of location, location, location when considering where to acquire a home for the best prospects of long-term growth.

Re/Max southern Africa chief executive Adrian Goslett said location referred to numerous elements buyers should think about before making their purchasing decision as there were various factors vital to the property’s long-term growth.

“These aspects determine the price that can be achieved if the property is sold in the future along with the income the property could generate by being let,” he said.

The first element was the area in which the property was situated with buyers considering purchasing the worst house in the best area rather than the best house in a notso-good area. Buyers should investigate development plans, including new industrial sites, roads, railways or industrial activities that could change the price profile in the medium to long-term.

Another element was sound infrastructure reflecting service provision. Areas suffering from poor service delivery were not sound options.