Real Estate Investor Magazine South Africa June 2014 | Page 15

UPFRONT
“Personally, if I were looking to invest in South
Africa at this time, I would focus on key cities and
f inancial hubs such as Johannesburg and Cape
Tow n. Johannesburg is stil l the f inancia l and
economic centre of South Africa and there are some
good investment opportunities in the Northern
Suburbs, where you can achieve rental yields of
C.10% +. In Cape Town properties around the
Atlantic Seaboard and the City Bowl will typically
be the most desirable and stable investments, but
the yields in Cape Town are relatively low compared
to Johannesburg, in some cases up to 50% less for a
comparable sized apartment.”
“In summary though, the trend we are generally
finding from our African based clients both domestic
and expatriate, is a huge appetite to diversify their
investment portfolios and invest in more stable
and established offshore real estate markets such
as the UK, US and Australia. Acquiring assets in
these markets and getting exposure to the foreign
currencies is a lso a great hedging mechanism
for investors who have experience signif icant
devaluation of their onshore assets as a result of a
weakening rand.”

TOP 10 INVESTMENT TIPS
1

Look at the economic fundamentals for the
market first.

2

Make sure that the property you are buying
is af fordable for at least a reasonable
proportion of the local population.

3

Don’t take unnecessary currency risks.

4

Make sure the rental yield quoted to you
reflects a reasonable rental for the property.

5

Include up-to-date tax information in all your
calculation on investment returns.

6

Understand the ownership structure.

7

Look at the infrastructure in place to support
the development.

8

Don’t be emotional about investing.

9

Check out the track record of the developer.

10

Do your own homework.