INVESTING
Understanding your property investments ’ total returns has many benefits , including accurate evaluations of the financial viability of your investments and assessing risk and potential rewards .
But to truly understand the ROI of your property investments , it is crucial to consider the following two fundamental factors :
1 . Your Property Price Growth ( Capital Appreciation Rate ), and 2 . The Net Rental Yield ( Capitalisation Rate for Commercial Property ).
1 . Property Price Growth or Capital Appreciation Rate The Property Price Growth , also known as Capital Appreciation Rate , is the percentage with which the market value of a property grows annually . It is a crucial concept for you as a property investor to understand , and you should be able to use it to assess the potential profitability of investments . By understanding and analysing Property Price Growth , investors can make informed decisions and strategise for long-term financial success .
45 JUNE / JULY 2023 SA Real Estate Investor Magazine