Thuli and Nkosi thought their property portfolios would sustain their retirements. Instead they were debt traps. Here’s how CPMoneyMakeover turned their fortunes around. The new season kicks off on February 23. Follow CPMoneyMakeover for more.
Building a property portfolio for retirement was the goal for two of last year’s Absa/City Press Money Makeover candidates. Unfortunately, their dream of generating retirement income from property was fast becoming a debt nightmare.
Environmental affairs officer and single mom Nkosi became a property investor by chance rather than design. She bought her first home in a township in 2007. Five years later Nkosi decided to move closer to amenities and work, which would save her money. She bought a new home in town and decided to rent out her township property.
“To be honest I was bit shocked and scared about how I was going to cope. I thought it was too late to think about all those things or change anything,” says Nkosi who by now had five properties but was struggling with cashflow. Leola Jooste, Thuli’s adviser, and Funi Nemanashi, Nkosi’s adviser, created financial plans to ensure that Thuli and Nkosi met their goal of having the properties paid off by retirement.
Thuli separated rental income from her salary income, opening a second cheque account for her rental income. She decided to sell the one property and used the money that was going to fund the property to accelerate the repayment on the remaining properties.
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