Real Estate Investor Magazine South Africa June 2016 | Page 16

COVER STORY
Making Money in South African Property

Property has long been the cornerstone of wealth for
every investor, with around 50% of the world’s wealth
held in property. The wealthiest institutions own vast
property portfolios – from shopping centres to holiday
resorts to vacant land. Here is a list of the strongest
methods of building your wealth with property.

property, which can then be sold at a substantially
higher price. It is less risky than simply speculating
on short-term capital appreciation, because the capital
appreciation is not based on market factors, which is
beyond the investor’s control, but rather on adding
value through a calculated investment in upgrading
the property.

Direct Investment in Property

Buy-to-let

Owning property, whether in your own name or in
an investment vehicle, such as a trust or company,
is the most efficient way to create wealth. There are
various property investment strategies, which can be
implemented, each of which involves its own risks and
benefits.

Buy-to-hold

A buy-to-hold strategy involves investing in a property
with a long-term view of 10 or 20 years, in order to
benefit from the natural long-term capital appreciation
of property, which over the past 20 years has averaged
10.5% a year for residential property in South Africa.
An investor may also use this strategy to acquire
property that is likely to appreciate in value as a
result of developments in the area. As the value of the
property increases over time, the equity (the market