Investing in Property

Property has always been a solid investment. When purchasing a property there are numerous factors that should be considered.  Before you commit to buying property, it’s important to calculate the potential yield on the property.  There are a number of factors and considerations that need to be taken into account:

• Build up your property portfolio and don’t sell your investment property as you will have capital gains tax (CGT), conveyancer’s fees, and transfer fees to pay which could eat into your profit.
• Avoid buying multiple bonded properties.
• Diversify your property portfolio – invest in residential, small commercial, and industrial units.  Residential real estate remains sturdy in South Africa and if you are a less experienced property investor then this would be the better option for you.
• The buy-to-let strategy is one of the easiest ways to invest in property.  
• When buying property to rent out, one other key factor to consider is housing affordability.
• Avoid investing in one area as the markets fluctuate – research the area by chatting to various estate agents who can offer valuable insight about the area in which you want to invest.
• It’s vital to ensure the property you’re buying is in a desirable place to keep its resale value rising.
• If you have thoroughly researched the local market, you will know what constitutes a good deal.
• Focus on the cash flow as the income obtained monthly will then result in greater capital growth long term.
• Ascertain what type of tenant the property will attract.  Most serious investors don’t generally want to get too involved managing the property.  An option would be to consider signing a ‘managed lease’ agreement with a good rental agent who will then be responsible for sorting out maintenance and tenant issues on your behalf.