Real Estate Investor April 2021 April 2021 - Page 32

INVESTOR INTELLIGENCE

The right investment for you

Sustainable growth in property prices
CARLO MARIANI
For years , The Property Coach has been working on crafting a reliable methodology to beat the averages when it comes to return on property investing . How do we spot the difference between sustainable and unsustainable growth in property prices ? Does it pay to follow the trend or should you rather be a contrarian ? Western Cape or Gauteng ?

It is fascinating ( and somewhat concerning ) that many local property investors tend to buy where they grew up or where they work or where they live , simply because such approach is perceived by them to be less risky . Such approach could easily lead you to invest in a sub-standard area when it comes to future growth opportunities . Here are a few of my favourite building blocks of the Area Assessment Scorecard

Block 1 : Invest like Warren Buffet Warren Buffet ’ s first rule : Don ' t lose money and his second rule : Don ' t forget Rule # 1 . What does this mean for you ?
I advise that you avoid areas where you are exposed to the single point of failure and to focus on widely diversified local and regional economies . Do you want to be exposed to the risk of platinum price driving the economy of Rustenburg ? It can be risky . Do you want to be exposed to the risks of the Coal Basin being replaced by green renewable energy at a time when banks do not even fund new coal projects ? I ' d be very cautious with places like Emalahleni . The large , well-diversified economies where both private and public money is active will de-risk your Property Investments and serve you well in the long run .
30 APRIL 2021 SA Real Estate Investor Magazine