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| Cost of Security in a Property Investment |
I live in South Africa, OK! I invest in property and I sometimes feel that my investments are under threat. Whilst I am very positive about the future, I am definitely not in denial.
In my previous post I wrote about how my levy dropped a whooping R130+. But today is another day and I am writing about how my net income went down due to high security costs. It’s like a rolling wheel. You get one step forward and two steps backwards. But the long term the graph is moving upwards.
A while back I decided to get rental property in the security/ residential/ gated estate. I still think it’s a wise move because many South Africans like the idea of living inside an estate. I never have vacancies in the unit but the returns on my investment are horrid. The truth is… I bought this property as my own home. It became a rental unit when I moved out. I doubt if I would buy it for rental purposes. I have owned this unit for 6 years now. In the 6 years I haven’t heard of an attempted break in into the said estate until May. After that I got an email on break ins in 2 houses in the estate. Scary right???
There are a number of factors that put us at risk at the moment...
There are a lot of commercial developments in the area, making the estate very vulnerable to opportunists. It’s easy for criminals to hide in empty buildings and construction sites, etc.
Being an estate proves to make it easier for criminals to do their business. They may have inside help or worse, buy property to be part of the community. That way they can learn the ins and outs. Actually, even before they learn ins and outs, it may be far easy for them to get assets without breaking in. My friend, for instance, has a tendency of sleeping with first floor doors open in summer. We’ve always believed that we are far safer than we actually are. And yes, criminals don’t struggle to break into estate houses because of this relaxed attitude to security by the residents. We put too much trust on the manmade systems.
Safety Doors
You would think that we are relaxed because we have trellis and security bars in our doors and windows…NOOOO we don’t. In my case, that’s about to change. I am going through my security door quotes for the ground floor. My tenants are very happy to pay more for extra security. But I must say, my income will be hammered by the +/-R15000 this will cost. Why does everything have to cost this much?
More Estate Costs
The estate is also taking this matter seriously, as it should. And their seriousness costs a lot. We had emergency levy of about R1000 when we had an attempted break in. When the actual break ins occurred, the paranoia grew stronger and fast. I’m scared of what will be required now. Worse, guests may be required to strip naked when they visit residents.
Alarm Systems
It looks like we are back where we started. When we lived in a stand-alone house we had burglar proofed our home to a point of feeling imprisoned. Burglar bars, alarm systems and locked doors 24/7. We paid premium with the hope of feeling a little free, and now, we are back where we started. We need alarm systems. How sweet. And we still pay premium for “safety”.
As if this is not enough, a couple of months ago we had a few break ins in the complex where I have duplex. Tenants and owners who live there were in such a panic that we had to get security guards immediately. We later had to formalize this and increase the levies by about R500. That’s a lot of money. It’s a low income area. I raised the rental by R300 for this unit, meaning that I have a R200 decline in net income, plus inflation. 2012/13 will be a lower income year in this unit in real terms.
Whats your experience on the cost of security in a Property Investment in South Africa? Is property investing still worth it?
photo by: Christopher Barnatt
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