PROPERTY INTELLIGENCE
Property has the potential to provide a regular , escalating income as well as , over time , enjoying healthy capital growth . It is appealing as a solid investment class because , if it is correctly geared , investors can leverage their property portfolio and effectively use other people ’ s money to grow their asset base .
“ If you are looking to flip , then acquisition costs need to be factored into your sums , and capital gains tax also needs to be taken into account . Ideally , you want to buy for under R3 million , spend a maximum of R450 000 renovating and then achieve a gain on the resale of at least 10 percent of your total expenditure .”
The first priority is to decide what type of property investment you are looking for . For example , you may want to buy and then flip for profit , which is a shorter-term investment strategy and involves ensuring that you acquire a good purchase with potential to renovate and resell in a short space of time .
From a broader perspective , if you ’ re looking to invest in property generally , then you will need to consider both your potential returns as well as the potential capital growth on your asset . Your strategy may be to buy , renovate and flip , or it may be simply to buy and hold either to live in or rent out for additional income and as an investment property .
80 AUGUST 2022 SA Real Estate Investor Magazine