44 REI MAGAZINE JULY
4 . Market Analysis and Rental Demand When I bought my first investment property there was very little in the way of market research . These days everything is available at the click of a button , particularly with the advent of artificial intelligence . Bottom line is that there is absolutely no excuse for not doing a thorough market analysis before making your investment .
Key research criteria are the following :
• Current and projected rental demand in the area
• Average rental rates for similar properties
• Vacancy rates in the neighborhood
• Potential for capital appreciation based on
5 . Property condition and type It goes without saying that the lower the cost of the property and the higher the rent then the better the return . For this reason , investors should be looking at apartments and or townhouses for rental returns as opposed to single family homes .
When I look at a property I walk away if there are negatives that are immediately noticeable . Bottom line is that these will be the same negatives that will impact your potential tenant and more importantly the future buyer of the property when you are looking to sell it for a huge profit .
This comes down to common sense , the property does not necessarily have to have sea and mountain views , but no one wants to look out at a graveyard or a garbage dump . The age and overall condition of the property will also impact your returns . If your aim is to buy , renovate , rent and sell then a fixer upper can be very profitable . If you don ’ t have the time or know how then you should focus on newer builds that will not require future renovation or ongoing maintenance costs . Whether it is new
South Africa is currently facing a sever housing shortage so if you do your homework and invest wisely your rental property will always be in demand .
Jason Lee is a property investor , developer , and author . He invests in multi-million rand deals in South Africa and abroad . He has authored 4 Best-selling books in South Africa .
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• Making money out of Property in South Africa
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