Sectional Title Schemes

Sectional title homes are a great investment particularly when they afford one a more balanced lifestyle, as they allow buyers to enjoy shared use of some of the living spaces within an estate or complex.   From an investment perspective, the latest TNP-FNB Residential Yields Review shows that sectional title properties remain the most attractive proposition among tenants with gross yields varying between 8,8% for a one-bedroom property, 9,2% for a two bedroom and 9.01% for sectional title properties with more than two bedrooms.  Sectional title property will in most cases cost you less than a free-standing home in terms of levies and the day-to-day maintenance of your property and they’re usually safer than stand-alone houses. However, buyers need to be aware of the legal factors and rules, and what it means to be a sectional title owner.

Some of the benefits of living in a sectional title home is that it offers security.  There can be security facilities at the entrance to complexes and estates, or high walls or electric fencing around the complex.  Another benefit is that shared costs of maintaining everything outside the unit (communal swimming pool, garden service, tennis courts, and other amenities) are maintained by a managing agent and the owners pay for this service in monthly levies.  This will assist to ensure that the properties within the development appreciate over time. Additionally, there is a sense of community living in a sectional title scheme. 

Sectional title rules often leave owners struggling with understanding the rules of conduct and common property.   When the rules change, the owners don’t have the power to make changes that are suited to them. There is limited ‘freedom’ to what you can and can’t do to your property, and even more frustrating is that everything must be approved by the governing board.  Sectional title owners are restricted when it comes to improving or making changes to their home.  Ideally you should look at investing in complexes where there’s a higher proportion of owners compared to the number of people renting because homeowners generally tend to take better care of the property than renters do, and this will help maintain the value of the property.

Sectional title has become a preferred way of living and of investing.