Flyt PropertyArticles by: Murray
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Eaton Square prepares units for COVID 19 quarantine stays

Flyt Property Investment’s recently launched Eaton Square in Diep River has made units available to those affected by COVID 19. These new, furnished apartments have been suitably sanitised and prepared for immediate occupation.

Preference will be given to those who qualify to be quarantined (returning from high risk countries), medical professionals or those who have been adversely affected by restricted travel plans, with units being available on a daily or weekly basis at significantly reduced rates.

Located in the heart of Constantia Valley, Eaton Square is close to top medical facilities (Constantia Medi Clinic and Tokai Melomed) and within 5 mins of Constantia Emporium and Contantia Village, should guests need any essentials or medical attention.

Eaton Square already has a meal delivery service available to tenants, fast and stable WiFi connectivity as well as a weekly cleaning service.

“As newcomers to the community we wish to help in any way we can during this crisis,” says Ryan Flowers, Sales and Development Manager at Flyt Property Investment.

Get in touch using one of the links below:
www.eatonsquare.co.za
ryan@flytproperty.co.za
http://airbnb.com/h/eatonsquare104
https://www.airbnb.com/rooms/41545988?s=13&shared_item_type=1&virality_entry_point=
Murray Media

WINK Aparthotel offers furnished apartments for COVID-19 quarantine stays

WINK, a self-catering aparthotel located in the heart of the Mother City in Cape Town, has opened up 30 fully furnished, sanitised studio apartments for immediate occupation, for short- and long-stay rentals at discounted rates, for those affected by Covid-19 and the subsequent lockdown restrictions.

Preference will be given to people who qualify to be quarantined, for example healthcare professionals, repatriated citizens returning from high-risk countries and domestic travellers restricted by travel bans.   WINK’s location on the Foreshore is within walking distance of Netcare Christiaan Barnard Memorial Hospital for guests who require medical treatment and is minutes away from various retail outlets such as V&A Waterfront for guests to stock up on essentials.

The entire hotel has been ULV-fogged in line with National Health and Safety requirements and the stay includes a weekly cleaning service overseen and conducted by an assigned COVID-19 Health and Safety Officer.   Each spacious apartment comes fully furnished and is equipped with a compact kitchenette – they are fitted as self-catering units, but there is, however, the freedom and flexibility of opting for 3 x packaged meals per day, prepared and delivered by an accredited Covid-19 service provider; or guests can order in.

Zane de Decker, MD of Flyt Property Investment, who own and manage WINK Aparthotel, says, “Corporate South Africa and her people need to be doing what they can, however they can, to support those in need during this time of crisis – we are happy to be able to provide a safe place to stay for those seeking quarantine premises.”

Get in touch using one of the links below:

Lauren Barnard
www.winkaparthotel.co.za
bookings@flytproperty.co.za

Ubuntu Beds
https://www.ubuntubeds.org

Airbnb
https://www.airbnb.co.za
Murray Newsletter, Uncategorized

South Africa is a legal Tax Haven

Zane De Decker, MD Flyt Property Investment

South Africa is currently enjoying the status of a Tax Haven – a bold statement, I admit, and one that some might think outrageous, but if you break down the monetary calculations of a Section 12J investment, you will realise the glaring opportunity too.

I’m still quite astounded at how many investors and financial advisors don’t fully understand the workings of SARS 12J tax incentive, which incidentally has a cut-off date of June 2021.

Think about this; 100 per cent of what you earn can be tax deductible via the 12J structure. Since the introduction of the limit to the total amount permitted to be invested annually (those in the know were taking advantage) an individual still has the opportunity to invest R5million (R2.5m this year and R2.5m in 2021) and a company is limited to R10million (R5m this year and R5m next year). So, essentially, if you are an entrepreneur who owns your own company, you can easily – and legally – enjoy a R15 million tax deduction.

Salary earners, too, need to be taking advantage of the structure. Let’s say you earn R1m per annum; you are permitted to invest the R2.5m per annum (so R5m). If you invest the R5million, you’ve created a tax loss that will shield the next R5million of your salary. In other words, you will pay no tax for the next 5 years! SARS will reimburse you your monthly tax deductions when you submit your tax return.

Beg, borrow or steal

When our clients do finally catch on to this Tax Haven window, they’re looking in all sorts of places for some money to invest. At Flyt, we have developed our Section12J product to such an extent that we offer our clients who don’t have the R2.5million (or any part thereof) available to invest, an option to borrow the funds. The tax deduction/reimbursement will take care of a large portion of the repayment after which income derived from the investment pays off the remainder of the loan.

Instead of conjuring up clever and expensive ideas of how to avoid paying tax, rather just find a decent Section 12J fund and shield it?

I find it strange that many high net-worth individuals send their money offshore to favoured tax havens such as Isle of Man or The Bahamas. Now that sounds wonderful to be sending your hard-earned cash on an island holiday, but what does it really mean? As a start, it means you’ve probably invested in a random company or fund, that you know very little about, which yields a low ROI and attracts very handsome set-up costs and ongoing management fees. This all somewhere exotic you’re hoping to go and visit one day.

BUT, more importantly, we must not forget the intention of Section 12J is to stimulate investment into certain sectors of our economy with the end goal of creating jobs. Any South African investor, especially in these trying times, who has the opportunity to invest would be missing a huge opportunity to boost the economy, be a part of the solution and take complete advantage of the short-lived tax haven status we are currently legally enjoying.
Murray Media, , , , , , ,

Eaton Square prepares units for COVID 19 quarantine stays

Flyt Property Investment’s recently launched Eaton Square in Diep River has made units available to those affected by COVID 19. These new, furnished apartments have been suitably sanitised and prepared for immediate occupation.

Preference will be given to those who qualify to be quarantined (returning from high risk countries), medical professionals or those who have been adversely affected by restricted travel plans, with units being available on a daily or weekly basis at significantly reduced rates.

Located in the heart of Constantia Valley, Eaton Square is close to top medical facilities (Constantia Medi Clinic and Tokai Melomed) and within 5 mins of Constantia Emporium and Contantia Village, should guests need any essentials or medical attention.

Eaton Square already has a meal delivery service available to tenants, fast and stable WiFi connectivity as well as a weekly cleaning service.

“As newcomers to the community we wish to help in any way we can during this crisis,” says Ryan Flowers, Sales and Development Manager at Flyt Property Investment.

Get in touch using one of the links below:
www.eatonsquare.co.za
ryan@flytproperty.co.za
http://airbnb.com/h/eatonsquare104
https://www.airbnb.com/rooms/41545988?s=13&shared_item_type=1&virality_entry_point=
Murray Blog, Media, , , , , , , ,

Investors make the most of Section 12J Tax Incentive

The close of the 2020 financial year this February brought a scramble of last-minute investors through the Section 12J gates, angling for that most welcomed tax rebate. Cape-based Flyt Property Investment saw their rate of capital raising double within the last week of February as investment into their Flyt Hospitality Fund caught the attention of property investment group FWJK. A total of R170million has been raised since the launch of the fund in November last year, with R80million subscribed within the last week.

Zane De Decker, managing director at Flyt Property Investment, says that his team was burning the midnight oil, processing a flurry of investors into their fund. “We finally see that investors are responding to this incredible incentive provided by SARS. 100% of your tax back should be a no-brainer and good quality hospitality property, as an underlying investment, is a winning combination,” he says. “We’ve taken our time in formulating an attractive investment and lowered our entry-level in order to cast our net wider, allowing more investors the option of jumping onto the bandwagon.”

Flyt Property Investment’s hospitality fund entry options have been particularly appealing to investors looking to cash in on the 12J incentive. The fund managers, together with 12J specialists Anuva Investments, introduced a loan option whereby the total investment amount can be subscribed via a structured bridging loan. Flyt provides qualifying investors with an interest-free loan with a fixed administration fee of 2,5%. Pretty competitive if one compares most bridging finance in South Africa, available at between 12% to as much as 20% interest on the loan amount.

Many of the last-minute contributions came by means of international property group FWJK who found the structure to be a worthwhile tax benefit for their investors and co-developers. FWJK has developed property assets to the value of R8 billion and is most noted for their residential, medical, commercial and industrial property developments and, more recently, the Zero to One development touted to be Cape Town’s tallest building. Of their 49 total developments, three are apartment hotel developments located in KZN’s Umhlanga and the Cape Town suburbs of Sea Point and Clifton, and available to investors via the Flyt Hospitality Fund. This recent move into the 12j space has resulted in these projects being close to 100% sold.

Commenting at a 12J closing event this week, Dave Williams Jones, CEO of FWJK, said, “We expect the number of investors into this fund to grow exponentially as the benefits of investing via Flyt’s Section 12J fund and specifically in FWJK products becomes more widely known.”

Section 12J of the Income Tax Act was introduced in 2009 by the South African Government to encourage South African taxpayers to invest in local companies and receive a 100% tax deduction of the value of their investment. Flyt Property Investment introduced its Section 12J hospitality offering to investors in November 2019.

Murray Blog, , , , , , , ,

Flyt Property Investment launches Africa’s first property-backed security token

Cape-based property investment specialist Flyt Property Investment have launched Africa’s first property-backed security token. The Flyt token (FLYT), which resides on the Ethereum blockchain, allows investors to subscribe for, redeem and transfer shares in the Flyt Hospitality Fund, a South African Section 12J fund investing in hospitality property and apart-hotels. One Flyt token is equivalent to one share (which is currently valued at R100) in the Flyt Hospitality Fund.

The breakthrough in fund technology has been developed in conjunction with Swiss-based financial technology supplier Bakari. “South Africa has a developed, forward-looking financial sector and it is not surprising to see it on a short list of countries embracing next-generation financial technology. We are proud to be working with the Flyt Hospitality Fund, which is leading in innovation by using technology to offer responsible investments directly to individuals,” says Ciaran MacDevette, Co-Founder of Bakari. This is the first example of a blockchain-based token servicing a fund operating within a regulated, legal and compliant environment in Africa. Investors who are familiar with Ethereum blockchain can manage their Flyt token via their digital wallet. FLYT is an ERC-20 compatible token on the Ethereum blockchain which can be self-custodied in existing Ethereum wallets.

Zane De Decker, MD of Flyt Property Investment says that the move to digital asset brings an exciting option for investors. “Our aim is to be ahead of the curve and with that in mind, we are thrilled to present our investors with varied options of entry. An investment into the Flyt Section 12J hospitality fund is available via old-school investment into the fund and now, for those who support the blockchain technology, via the Flyt token,” he explains. The token allows for easy, liquid infrastructure where investors can manage their asset through a trusted blockchain.

The Flyt Hospitality Fund is a property-backed section 12J fund, investing in strategically located hospitality properties with a focus on sectional-title serviced apartments and student accommodation. A minimum investment of R50 000 is required, via the token or share option, with a cut off imposed by SARS of R2.5million.

Section 12J of the Income Tax Act was introduced in 2009 by the South African Government to encourage South African taxpayers to invest in local companies and receive a 100% tax deduction of the value of their investment. To date, South Africans have invested over R6 billion into the 12J sector.

Flyt token digital subscriptions can be made via: flyt-token.bakari.ch

Eaton stakeholders
Murray Blog, Uncategorized, , , , , , , , , , ,

Flyt launches Eaton Square, Diep River

The long-awaited launch of Flyt Property Investment’s mixed-use development, Eaton Square in Diep River, Cape Town, was recently held on the first floor deck of the property. A celebration of the completion of the 2-year-long project was enjoyed by the building contractor GVK-Siya Zama as well as stakeholders, investors and buyers. Two of the completed furnished apartments were made available for viewing.

Over the last few years, Cape Town’s historic suburb of Diep River has been flagged by property experts as a promising urban renewal node. Its ideal location – proximity to schools, public transport (Metro Rail’s Southern Line as well as major bus routes), hospitals and shopping centres – makes it an ideal prospect for new families and up-and-coming professionals.

Eaton Square offers 66 sectional title 1- or 2-bedroom apartments, all with undercover parking. Architect Sebastian van Greunen has included beautiful communal areas, a first-floor rooftop entertainment deck, a co-working coffee shop/restaurant that will offer residents a meal service, and a private dining room that residents can book for entertaining guests.

All units have been designed with the ‘plug and play’ or co-living concept front of mind, as explained by Flyt’s managing director Zane De Decker. “Over the last two years we have researched worldwide trends, worked extensively with property professionals and consulted the best, most forward-thinking minds in the business to truly trailblaze a new take on the modern-living concept. We want our residents to have the option of arriving with a suitcase and literally plugging in.” With this in mind, Flyt are offering a fully managed solution to investors, which delivers efficiently designed ‘shareable’ apartments, tried and tested furniture packs, up-to-date technology, and rental management with flexible rental options (days, weeks, months) –  all suited for investors who would like to purchase with the intention of renting the unit out for optimal returns.

Units are also available to purchase in Flyt’s Section 12 J venture capital tax incentive fund that offers South African taxpayers a 100% tax deduction on the amount invested.
Murray Blog

Flying High

Following the launch of Flyt Property Investment earlier this year, this dynamic property development and investment company has already made great strides in the industry. September saw their newest development, Eaton Square presented to market whose co-living concept has been a big drawcard. MD, Zane de Decker, continues to spread his proverbial wings with the expansion of an already formidable team by taking on additional staff to assist with brand and business development, the unveiling of a second property, Wink Aparthotel, and the launch of an exciting investment vehicle called Flyt Hospitality Fund.

Ever a champion supporter of aspiring entrepreneurs, Zane’s first hire was young David Venter, who comes with a degree in Business and Economics, diplomas in Stock Trading RPEs and Property Management at UCT, who, in his 3rd year of accounting, brings a diverse set of skills to the Flyt deck where he will be assisting in streamlining business operations.

Hot on his heels, all the way from Germany, is Julia Hecht, an administrative guru. Armed with a certificate in Industrial and Organisational Psychology at UNISA, South Africa, a BA International Relations and Management at the University of Applied Sciences in Regensburg, Germany, and an MSc International Business and Management Degree at Liverpool John Moores University in the UK, along with a calm demeanour and phenomenal organisational skills, she will ensure that the office runs smoothly and efficiently.

Two no-brainers were retaining brothers Darryn and Justin van der Poel, whose vast experience in their family’s property business presented an opportunity for Flyt to secure these two successful industry experts. Darryn’s proficiency in real estate, together with his work on carbon credit and renewable energy consulting projects backed by a Bachelor of Commerce degree in Finance and Economics, set the tone for a career in the property space spanning some 15 years. He has been appointed as Investment Consultant at Flyt to build shareholder value for investors through his knowledge, expertise and global business network.

After completing his Bachelor of Commerce degree in Marketing Management in 2015, Justin assumed the role of portfolio manager, managing the residential portfolio in the family business and went on to found his own company with two partners – a boutique-style property and investment brokerage. His excellent people skills and an innate understanding of the property space have enabled him to build an impressive client base through securing attractive property opportunities for his clients. Justin has been tasked with overseeing sales and investments for Wink Aparthotel, launching Feb 2020.

Jerri Mperdempes, an experienced commercial property broker and business owner whose positive, tenacious and innovative approach and knowledge of the local property market have resulted in a successful career path, will be key to assisting Flyt with new business development. He will be working closely with Sebastian van Greunen, development manager, whose architectural and design flair, and ‘out of the box’ thinking has established himself as a sought after commodity in the Cape Town property arena.

Last but by no means lease(t) is Ryan Flowers, a former colleague of Zane’s who joined the company earlier this year as asset manager. His near decade of expertise and unique skillset can best realise Flyt’s vision of the creation, delivery and management of their high quality property assets.

What they all have in common is a shared vision for the company inspired by a brilliant portfolio and offering, and a genuine love for the industry.

Watch this space!

Murray Blog, , ,

Purchasing and managing an investment property – a few fundamentals

Granted, the property market, especially in Cape Town CBD, has been given a shot in the arm thanks to short and medium-term-type rentals and the success of student accommodation, Airbnb, Bookings.com and the likes, but believe me, managing and making a favourable ROI on a second or third property is not a walk in the park. Getting it right, though, can be one of the best investments you ever make.

The trouble is, many investors are left wondering if they’ve left it too late: is the sector saturated, is the season over? To be honest, those who got in early have certainly reaped rewards, but what we don’t hear about is that many a ‘school fee’ has been paid on route. The buy-to-let rental market is a whole new ball game, and investors should make sure their recipe for success is fool-proof.

Being in the property game, we’ve done our homework and researched this South African market extensively. In fact, our research got us so excited; we have actually set aside a number of our apartments at Eaton Square in Cape Town to service that market specifically. We’ve selected the most suitable units, carefully selected a suitable furniture pack and refined our offering, partnered with rental operators and developed an exceptional investment for those who are looking for a managed solution. Our property development team has brainstormed with some of the most experienced and best minds in conceptualising a turnkey solution for those hands-off investors who are looking to sit back and enjoy the fruits of this excellent investment option. However, for those who’d like to fly solo, I’d recommend you make sure of a few fundamentals:

Access

Although location is important, it’s evident that the rental market is also looking for great access – walking distance to transport, coffee shops, restaurants. Seems like a no-brainer but many investors make the mistake of selecting an address above access.

Easy-peasy does it

Tenants are looking for slick, easy access with the least amount of rules, regulations, paperwork and a hassle-free process. Swift check-ins, no running around, 10 thousand phone-calls later meeting the friend of a friend who has got the key.

Services

Make sure you’ve got great Wi-Fi, there’s enough connectivity for television and cable services and parking is available.

Furniture

Yip, be prepared that your furniture is going to have a shelf-life and that pretty is not going to cut it. We’ve included a furniture pack in our units at Eaton for this reason precisely. Although you might be tempted to splash out and decorate, we’ve seen plenty of cash go out the window with bad furniture purchases

Security

Visitors are always sceptical and cautious of the area they are staying in and whether it’s safe (and so they should be). A few security checks won’t do you any harm – find out if there’s a neighbourhood watch and what the crime rate is like. Also, make sure your tenants are aware of any security concerns.

The bottom line is, if you set yourself up properly and you don’t mind managing the process yourself (trust me, it’s time–invasive and time-consuming), there’s no reason not to go it alone. If, however, you’d prefer the ‘package deal’, find a reputable developer who has, like us, done their homework and ticked off all the boxes.
Murray Blog

Section 12J, are you really getting it?

We have recently taken our newly launched Section 12J property fund to the investment market. I’m a property specialist, with a bit of an asset management background, so the 12J structure really appealed to me when it first caught my interest. What I’m finding is that many people we are chatting to about the tax incentive really don’t fully understand its structure and workings. If it sounds too good to be true, it probably is, right? Wrong!

The glaring misconception is that 12J merely delays tax and investors get ‘nailed in the end’ with Capital Gains Tax (CGT), but this is not the case at all.

Based on an annual income of R2.5m, let’s break it down as an example.

Patricia earns R2.5 million per year and therefore falls in the 45% tax bracket; according to the tax table, R982 000 is the total tax due by her to SARS. Let’s say she invests R1million into Flyt Hospitality Section 12J fund. This R1m is treated as an ‘expense’ or tax-deduction, so her next tax return would look very different.

R2.5m income earned, less the R1million deduction, leaves Patricia with a balance of R1.5million taxable income, equating to a tax obligation of R532 000 and a tax saving of R450 000! Better yet, if she is a salary earner and pays PAYE, then her employer would have already paid the full R982 000 to SARS and in this case, she would be due a refund from SARS of R450 000, thanks to her investment in a Section 12J fund. For self-employed individuals or companies who are subject to provisional tax, the R1million invested means they avoid paying the R450 000 and only need to pay tax of R532 000, as opposed to R982 000.

 

 

Okay, so that’s all good and well and any smart investor would grab this incentive in a heartbeat, but the confusion comes about when an investor is looking to cash in.

An investment into The Flyt Hospitality fund is locked for 5 years, so let’s say (without considering any return on the invested amount) Patricia sells her shares in the fund after 5 years for the same value (R1million). Yes, that R1million is subject to Capital Gains Tax which is calculated at 40% of the gain. So 40% of R1million is R400 000 and Patricia would be required to pay her 45% tax due to SARS of R180 000.

The bottom line?

Of her R1million Patricia pays R180 000 tax five years down the line, rather than R450 000 upfront. The number cruncher in me calculates that as a R270 000 saving and a 60% reduction on her tax bill.

What is also important to remember is that not only have you reduced your tax burden, but you have delayed it too, by a minimum of five years. If you opt to stay in the investment fund after the five-year period (you don’t HAVE to sell), you have avoided paying that tax until such time as you do sell. In the meantime, you enjoy the full benefits (capital growth and dividends) of the full investment amount. If you don’t sell your shares in the fund, you never pay the tax. Investors in the Flyt Hospitality fund who opt to stay in the fund, retain their investments at full value and receive dividends for as long as they remain invested in the fund.

I would even go as far as to break the Section 12J investment into three major opportunities:

  1. 12J converts income tax into capital gains tax (resulting in a 60% reduction of tax)
  2. 12J delays this reduced tax obligation by at least 5 years (during which time you enjoy the benefits of having the full amount invested for your account)
  3. You can stay as long as you want! Remaining in the fund means you keep your investment, you don’t pay the CGT and you earn dividends based on the gross (pre-tax) amount

 

Need any more convincing?