Unlocking Investment success : Navigating capital appreciation & cash flow
ASK THE EXPERTS
Send your questions to info @ rei . co . za or post on our FaceBook or LinkedIn pages and we will direct them to the necessary expert
Unlocking Investment success : Navigating capital appreciation & cash flow
JANINE BARRY Master Property Practitioner
What are the key factors you consider when identifying properties with strong potential for capital appreciation versus consistent and higher-than-average cash flow to make an informed investment decision ?
There is a saying , " You can ' t have your cake and eat it " Well , in real estate , you can . Knowing your " why buy " and what it is you ' re after is pivotal in achieving the type of returns you desire . Whether it is ultimately for capital gains , current and future income , or both , purchasing in line with your " why buy " will prevent you from making one of the worst decisions of your life or assist you in making one of your best and most definitely will guide you in determining where and what to buy .
Use the numbers to guide you . Calculating the rental yield ( annual rental income divided by the property ' s value ) helps determine the potential cash flow . Higher rental yields suggest better cash flow potential , while lower yields may indicate the property is geared more toward capital appreciation .
Location creates demand , and demand creates value . Choosing the right location is crucial for capital appreciation and more substantial cash flow . Properties in areas experiencing growth and development and in sought-after neighbourhoods will appreciate both in value and rental income faster and grow at a higher percentage than average .
Time is money . Consider whether it is a property you could engineer higher returns by immediately enhancing value quickly and easily , with a renovation to attract strong capital appreciation . Adding value
11 JULY / AUG 2023 SA Real Estate Investor Magazine