INVESTMENT
Advice for Long Term
Property Investment
Tips for buying Investment Properties
BY JASON VORSTER
B
uy-to-let is an attractive income
investment in a time of low rates and
stock market volatility and has seen a
strong resurgence in recent times. But beware
the low interest rates. One day they must rise
and you need to know your investment can
stand that test.
Nevertheless, despite the potential for interest
rates to rise, the current lower house prices,
rising rents and improving bond deals are
tempting investors once more.
If you are considering investing in property
in 2014, or improving your returns on a buyto-let you already own, it’s important to do
things right. Like any investment, buy-to-let
comes with no guarantees, but for those who
have more faith in bricks and mortar than
stocks and shares, below is some advice to get
you on your way.
Location, location, location
It doesn’t matter how many times you have
heard it before - location remains the most
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Residential E-Book 2016
important factor when buying property. When
you are buying for investment, in other words
buy-to-let, you have to look out for locations
that have high rental demand. Look out for
major facilities in close proximity, such as
schools and shopping malls. Notice if there are
any infrastructure developments taking place
in the areas, which would be more profitable
and attract rentals.
Don’t be over-ambitious
We have all read the stories about buy-to-let
millionaires and their portfolios. But the days
of double-digit house price rises are gone.
To compare different property values,
calculate their yield: the annual net income
(gross income received less expenses) divided
by the purchase price, and multiplied by 100 to
get a percentage. For example, a property with
a R650,000 purchase price, delivering R60 000
in rent annually after expenses, will deliver a
9.23% net yield in the first year.
If you can acquire a rental return substantially
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