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No Disposable Income

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cryptoandcoffee25.3 K3 months ago3 min read

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Yesterday whilst having a haircut at the local barbers of which there are now 5 all within sight of each other I bumped into an old business associate. He has done rather well for himself owning the largest real estate firm in the South of Johannesburg. I knew him from the take away he owned and managed which was my go to for fast food and I jokingly told him he ruined my life after that. His reasoning was it was too big an ask and the real estate business just took off and became the priority.

I thought this would be the ideal time to try and get some advice with a problem I have been asked to sort out. I have been asked to tackle the non payment of the security we have in our boomed off neighborhood. We have 72 properties in our secure enclosure and only 42 are currently paying. This means the 42 are paying for the entire cost and those 30 are benefitting at our expense. You can't force them to pay and why I said I would pay the 30 properties a visit starting at the end of this month. I am good with people and judging by what I see at the monthly residents meeting I have the best chance of getting those not no board to pay.

If anyone knows the residents this guy will as his firm is responsible for about 75% of all houses sold in the area. I needed to know if houses seriously could not afford the R800 ($45) monthly fee or not. The cost is actually less if everyone is paying and would be around R500 or $30 monthly.

What he said did not shock me because I kind of guessed this already and that was people have no disposable income anymore. The majority of houses are living beyond their means neck high in debt and are already maxed out on their credit cards and over drafts.

When people buy a property they max out their spend with the idea that through promotions and salary increases the property will become more affordable over time. I think this is how most of us have thought in the past and it generally does work if you control your expenses. This generation does not think like that and they are living on next months salary already and the slow down in the economy after covid has caught them all out. There are no salary increases like before along with regular bonuses that would bail you out of debt.

If what the people re saying is true that they cannot afford the $30 monthly costs then I am in for a tough time. I will try my angle though which is if we removed the security they would lose 30% property values instantly which is the truth. The $30 monthly fee protects the value of their investment which in our secure zone is roughly $400k. They are risking a drop of $120k by not paying the $30 monthly fee.

The removal of the security is not gong to happen and they do not need to know that because a few of us would cover this no matter what as we have too much to lose financially. I just find it hard to comprehend how some people live and it is all their own doing and guess it is a lack of financial education mixed with ignorance.

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