More and more South Africans are evaluating the feasibility and advantages of investing in residential communities. Large mixed-use developments are sprouting up all over the country, and buyers are opting to invest in a secure lifestyle estate, where a return on capital is highly probable.
But you should not disregard the importance of in-depth research on the estate you are planning to invest in, as this will be one of the most important investments you will ever make, and you want to be secure and content with it. Also, homes within lifestyle estates usually come at prices that average 30% more compared to homes outside residential estates. Mistakes can therefore be more costly if you fail to do essential research on the estate itself before making a decision.
This checklist for investing in an estate community begins with the Homeowners’ Association (HOA):
- Evaluate the financials of the HOA. Ensure that it is financially sound, holds adequate reserves and is compliant with its fiduciary responsibilities and memorandum of incorporation.
- Establish what levy increases there have been over the past three years, and what the policy is going forward.
- Be aware of the estate’s rules, regulations and architectural guidelines.
- Verify that the HOA is effectively running and managing the estate using best practice. Membership of ARC (Association of Residential Communities) will automatically tick this box.
- Confirm that the HOA constantly updates and improves implementation models in line with the estate’s strategic plan.
- Make sure that the important social aspects of living on an estate form part of the HOA agenda. These include use of the clubhouse, walking trails, play parks and sports facilities.
- Once the checklist is done, take a walk or drive around the estate and ensure that it is in good condition.
- Start at the main gatehouse, which should be well organised and run by helpful professional guards.
- Examine the green areas and parks. Is there a feeling of consistency? Are they proportionally developed across the entire estate? This will indicate a well-implemented master plan or a haphazard approach.
- Well-maintained roads, walkways and pavements will confirm an efficient maintenance plan.
- There should be consistency in architecture and design across the estate. Homes half-built or inconsistent with guidelines should be a warning.
- Above all, evaluate the security system closely. Include the electrical fence, surveillance cameras, presence of security vehicles, roving patrols and proactive policing. A recent countrywide ARC survey evaluated security as the largest factor motivating investment in residential estates and developments.
ARC assists HOAs to manage estates more efficiently to protect and grow the value of residents’ homes.