Provider Trust Type Properties

by Emile Grobbelaar

Trust Type Properties

The ultimate Wealth Masters Way is to have a double trust structure for property investments. The one being a Refinance trust and the other a Provider trust. The difference between the two is that the Refinance trust will always have debt/bonds with monthly shortfalls, while the Provider trust will have positive cashflow properties which are sometimes also paid up (i.e., no bond).

When purchasing a property, an investor considers economic- and market conditions, location of property, return on investment, capital growth of area, and many other factors. Provider type properties MUST be part of your portfolio.

These properties have limited capital growth but provide a positive monthly cash flow for the investor. Typically, these properties are priced below market value, as they are perceived to be in high-risk areas. They have a higher ROI, which enables the investor to pay the property off faster. It also provides a balance in your portfolio against refinance properties and can cover shortfalls in the Refinance trust. It will also enable an investor to supplement their income to create a nest egg for their retirement and / or supplement their retirement income.

 Typical characteristics of a Provider Type property:

  • 2-bedroom, 1- or 2-bathroom units located in secure estates;
  • High rental demand area for tenants working in close proximity. These properties are also close to hospitals, police stations, schools, shopping centers, airports and major transport nodes;
  • High Return on Investment (ROI) as properties are priced below market value;
  • The units are normally older and will require an initial outlay for maintenance.

It is also important that investors' properties are protected from structural deterioration and devaluation, and to this end, Destinata Properties has embarked on a process of attending the yearly AGM's on behalf of our clients, at no cost to the client, for the purpose of looking after the investment of our client. If the body corporate does not maintain the complex, the properties will lose value and vacancy will rise – tenants rent properties that look good and are maintained.

It is vital that investors revisit their investment strategy to see if there is a need for provider type properties to balance their portfolio. This will ensure that properties chosen are in line with your investment goals and that it will fulfill that need in the portfolio.

Please contact should you wish to be put in touch with Destinata Properties.