Real Estate Investor Magazine South Africa October 2018 | Page 23

ADVERTORIAL
BUY-TO-LET AND RECOVERY COMPARISON AND BENEFITS
CURRENT MARKET BUY-TO-LET RECOVERY
Net residential rental yields Fluctuating subject to market forces. Contractually predetermined at
prime plus 1.5%
Average house price growth Fluctuating subject to market forces.
2017 4,2% p.a.
2018 3,5% p.a.
(FNB HPI September 2018) Contractually predetermined at no
less than 6% p.a.
Net residential rental yields Average of 5-7% p.a.
National rental growth rate 6,7% (2017)
dropped to 3,27% 2018 (Latest Payprop
Report 2018) Contractually predetermined at
prime plus 1.5% (Expected rise in
prime rate in 2019 by.25 to.5%)
Average house price growth Fluctuating subject to market forces.
3 – 4% p.a.
(FNB HPI September 2018) Contractually predetermined at no
less than 6% p.a. Forecast drop in
rate due to Institutional investors
entering the market.
Forecast 3 to 5 years
Below Inflation rate
(E. RODE REIM Seminar September
2018)
NEW ABSA OFFER to 3rd
property purchasers
Higher income = access to more gearing
RECOVERY BUY-TO-LET
Owner occupation Tenant Occupation
Fixed contractually secured returns (prime plus 1.5%) Fluctuating returns and increases based on current rental
market trends
Increases payable by tenant
o
Increase in Interest rate
o
Rates and taxes
o
Maintenance expenses Increases payable by investor
o
Increase in Interest rate
o
Rates and taxes
o
Maintenance expenses
Contractual and secured predetermined ROI Capital growth subject to market swings
No continual turnover of tenants Turnover of tenants = cost
Penalty profits, legal cost and rental recoverable with the
on sale of the property Your cost if tenant refuses to move and has no motivation to
move
Greater security in purchase value @ maximum 75% of
market value all cost inclusive Potentially buy @ 90% to 105% of market value transfer cost
inclusive
Originated Opportunities - Co- due diligence & decision
makers with skill and experience at no additional cost Own time-consuming due diligence or expensive fees to utilize
experienced professionals.
visit www.propertyassist.co.za for more info
SA Real Estate Investor Magazine OCTOBER/NOVEMBER 2018
21