Real Estate Investor Magazine South Africa June 2015 | Page 34

STRATEGIES

7

Ways To Become A Property

Multi-Millionaire

Become a Property
Multi-Millionaire … Part 2
BY JASON VORSTER

1 Do not turn your nose up at unfashionable suburbs
Look for tell tale signs that a rundown or
unfashionable area is changing, things like newly
renovated properties or trendy coffee shops opening.
You may be able to pick up a bargain that will grow
in value over the medium-term, and just because
you do not want to live there, someone else will.
2 Think Woolworths
Even if you prefer shopping in Checkers or
Pick n’ Pay, you must keep an eagle eye on what
Woolworths is doing. If there is a new Woolworths
scheduled to open in the back-of-beyond, then a
better class of resident in the area, and a subsequent
hike in house prices can be confidently predicted.
3 Look for young professionals as tenants
If you are pursuing a high-income investment
strategy as a means of building a multi-million
Rand portfolio, the best tactic is to invest in
premium-quality, low-cost shared accommodation
for working professionals.

With the right tenants, converting a singleoccupancy property into one in multiple occupation
will lead to significant capital gains, covering the
refurbishment costs with plenty to spare.
4 Do not trust estate agents’ estimates of rental yields
Novices buy-to-letters are at the mercy of agents
32

JUNE 2015 SA Real Estate Investor

“The best tactic is to
invest in premiumquality, low-cost shared
accommodation for
working professionals.”
promising unrealistic rental yields. Do not trust
agents, do your own research and get genuinely
independent advice.

Average rental yields in central Johannesburg
are between eight and 10%, and if you only
have around R500, 000 to invest in a buy-to-let
apartment, you may do better in ‘outer prime’ areas.
5 Identify infrastructure investment
When you analyse why house prices have grown
faster in some areas than others, you will often find
that the single most important factor is improved
transport links and municipality investment.

It is no good waiting until that new highway
has been built before sinking money in an area. You
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