INVESTING
Purchasing investment property that won ’ t cost you a cent
Now that we know the basics of finding a break-even investment , let ’ s consider a practical example of the steps involved : 1 . Property Purchase
You acquire a property for R720 000 that is worth R800 000 .
2 . Smart Financing You apply for 100 % financing on a 30-year bond to minimise the cash you have to pay out of your pocket .
3 . Bond Registration You register the bond for R850 000 or more . In a year , the property will be worth about R850 000 .
4 . Strategic Refinancing After a year , you apply to refinance your bond to R850 000 , making up to R130 000 available .
5 . Financial Flexibility You park the R130 000 in the bond ( access / flexi bond ), so you don ’ t pay interest on the amount you borrowed . ( Only when you take the money out of the bond do you start paying interest on the amount you took ).
6 . Sustainable Shortfall solution This money will be sufficient to pay the monthly shortfall for years to come .
43 OCT / NOV 2023 Real Estate Investor Magazine