Many would-be property investors stumble into investment property without having a proper plan or structure in place. This usually results in the properties becoming a financial liability both in terms of tax consequences and excessive debt.
He also discovered that there were many expenses he could have claimed from the taxman that he had spent on the properties. Colen also reduced his property expenses by R7 000 by installing pre-paid electricity meters. A mistake so many entrepreneurs make it to treat their business funds as their personal money. If you treat yourself as an expense in the business and separate your personal finances from that of your business, you will have a better idea of whether the business is profitable.
Although she received large lump sum payments from projects, Bellah never seemed to have enough money to meet her living expenses. Within six months Bellah had separated her personal and business finances and paid herself a monthly salary. She created and stuck to a budget which included paying off her personal loans. On the business side, Bellah kept an income statement on each project to fully understand her expenses and profits. She now employs her own team rather than contracting out to sub-contractors. This improved her margins considerably.