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