Real Estate Investor Magazine South Africa September 2014 | Page 27

BY GAYE DE VILLIERS

ACQUIRING

Choosing The Right Property
Comparing apples with apples

W

hen comparing two residential properties,
it is important to try and compare apples
with apples, says Carol Reynolds, Pam
Golding Properties area principal for Durban, Durban
North and La Lucia. The first place to start is with the
area or suburb: get a comparative market analysis done
and ensure that both properties are situated in similar
areas that attract similar prices. If one property lies in
an area with a lower price ceiling than the other, then
accordingly, you can deduct a proportionate percentage
off the asking price.
She says the next thing to consider is size and
number of bedrooms. A two bedroom apartment will
always be worth more than a one bedroom apartment.
Similarly, a four bedroom home will be worth more
than a three bedroom home, even if the houses are of
similar size.
The third factor is the condition of the property and
finishes – the better the condition, the higher the price
tag. In this regard, bathrooms and kitchens always
carry the most weight. “The next factor to consider is
extras or special features like pools, sea views or garden
cottages. All of these will add value.
“Finally, and most importantly in this country,
security is a concern and hence the demand for secure
properties is high. To illustrate this: if you have two
identical homes and one is freestanding while the other
is in a security estate, you will be able to add around
15-20% in value to the property situated in the estate.”
Supply and demand
She says there is also a general rule of thumb when it
comes to supply and demand in the property market:
the cheaper the price tag, the greater the buyer pool
and the higher the demand. “Therefore, the value you
achieve per million rand after a certain point tends to
shift. For example, the difference between a R2 million
home and a R3 million home is vast – the R2 million
home will probably only have three bedrooms, it won’t
be in the best area and finishes will be simple. At R3
million the home will probably have four bedrooms, a
pool, be situated in a better area, have better finishes
www.reimag.co.za

and the difference between the two homes will be very
noticeable.
“Once you start reaching the higher price bands, the
differences between for example a R6 million home
and a R7 million home are not huge – often this is
where finishes, security and area or location carry the
most weight. Both of these homes will be comparable
in terms of size, number of bedrooms and finishes, but
the one with the higher price tag will be in a better area
with bet ѕȁ͕