What is the biggest mistake Hans Jakobi made in property and what did he learn?

Hans Jakobi once bought a studio apartment in a high rise building with lifts, a gymnasium and a swimming pool. While the cash flow was good, the running costs were huge and the capital appreciation was not there.

He learnt to be more careful in the selection of my properties so that he could enjoy both a good positive cash flow and a strong appreciation in value over time.

When Hans Jakobi moved to the country, he learnt that some of the rules which apply in cities, don’t necessarily apply in country towns. For example, the price differential (both in purchase price and rental return) between units and houses is much greater in the city than in the country. Not only that, people in the country would rather rent a cheap house with land around it on the outskirts of town, than a unit in the centre of town. Because traffic congestion is not a major issue in country towns, lifestyle is more important in those markets than proximity to town and the cost of renting a house can be much the same as renting a unit.

At various times He also sold a number of properties. While he didn’t regret having done so because he had a good reason for selling them at the time, the value of those properties has increased substantially since Jakobi sold them. Wherever possible, you are better off holding your properties rather than selling them and borrowing against your equity in the properties to extract the funds you need. Be careful though, - if you use the money for private purposes, the interest on the increased borrowings is not tax deductible. The good news though is that the actual equity draw down is not taxable. The taxation laws are constantly changing and therefore it is best that you obtain qualified taxation advice from a professional tax adviser before considering any course of action.

One of Hans Jakobi’s mottos in life is: “never cry over spilt milk” therefore he didn’t agonise over what he could have done better in the past. Hans Jakobi aims to make the smartest decision at the time, taking into consideration the facts at the time. Once he’s made his decision, Jakobi moves on and does not look back.

Hans Jakobi’s belief is that the past is over and cannot be changed anyway. The future has not yet occurred, so the only thing that matters to him is the present moment.