Real Estate Investor Magazine South Africa Real Estate Investor Magazine - February 2017 | Page 25

2Balancing income and capital growth Look for investments that provide an immediate and ongoing, inflation-linked income, as well as long-term capital growth. For example, investors in buy-to-let property enjoy solid long-term capital appreciation on the property, as the value of the property increases over time, while their buy-tolet property investment also produces an ongoing monthly income in the form of rental.

3Low risk All investments entail risk, but it is a fallacy that high risk equals high returns. Look for investments that provide more certainty and entail less risk. A pertinent example is buy-to-let property( a virtually risk-free investment if prudent risk management is applied) because the risks involved can be managed and mitigated- if not eliminated- through tried-and-tested risk management strategies the investor can implement easily and cost-effectively.

4High return investment Over the very long term- 100 years and more- the average real return on investments is barely 1 % per annum, making it almost impossible for investors to preserve capital, much less create wealth. Look for investments that offer returns well above inflation. Buy-to-let property investment yields investment returns that are far superior to any other asset class, because it generates multiple returns: solid long-term capital growth as well as a passive, ongoing inflation-linked annuity income.

5Hedge against inflation As the rate of inflation determines what your investment returns will be worth at retirement, it is crucial to ensure that an investment provides a hedge against the ravages of inflation.

One investment that has proven to outperform inflation is buy-to-let property investment. Firstly, property price growth continues to keep pace with inflation over the long term. In fact, it is widely recognised that inflation boosts physical asset prices like gold, silver, oil and property. Secondly, the monthly rental income generated by a buy-to-let property keeps pace with inflation year after year, as the rental increases each year.

6 Fees

Investment fees can decimate investment returns, costing investors millions of rands over the investment period. Buy-to-let property investment involves no advice and no fees, and – not surprisingly – the returns generated for the investor reflect the absence of both.
RESOURCES
P3 Investment Group

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