Do your homework
It is important to identify the geographic areas
is normally sold ‘voetstoots’ (although the seller is
obliged to advise you of any patent defects about which
Experienced estate agents are an excellent source
of information and will gladly assist with your
research and help determine a reasonable value for
the property in which you are interested. There are
also several websites which you can access to find
historical information on registrations and pricing.
In the case of a sectional title property, examine
the latest audited financial statements carefully,
and study the accompanying budget for the ensuing
year. If in doubt, talk to the managing agents of
the body corporate about potential special levies
or other major costs to come. This is especially
important in old buildings where ‘big ticket’ repair
items are a reality.
which will maximise your capital growth and rental
yield. Obviously your budget will determine the
price you are able to pay and therefore the sectors in
which you will be looking.
Because of a shortage of rental stock in most
suburban areas excellent rental yields are being
achieved, in the range 5% to 9% (ungeared).
Your research should cover suburbs which are growth
areas for reasons of shifts in demography, eg Umhlanga
where there has been an injection of business from the
City Centre, or eMdloti, much sought after for holiday
homes, and because of its convenience to the new King
Shaka Internatinal airport.
Equally importantly, identify the LSM category
toward which your rental property is targeted; a
quality rental agent will be able to assist here.
Before presenting your offer, carefully inspect the
property for any defects. As immovable property
he is aware,) it is a good precaution to make your offer
subject to a qualified building inspector’s report.
Location, location, location
Conventional wisdom is that it makes better
investment sense to purchase a more modest home
in an excellent area than the best house in a lesser
area. This has proven to be true time and time again.
Examples in sought after areas such as uMhlanga/
eMdloti abound with excellent capital growth
having been measured over time.
Other factors to consider, all of them adding to
the potential value of the investment are closeness to
schools and other amenities, ease of access to major
freeways and airports, and security such as in a gated
estate or where an independent body such as uMhlanga
UIP (uMhlanga Improvement Precinct) operates
which augments municipal offerings by providing
services such as cleaning, greening and security.
Umhlanga, KZN
www.reimag.co.za
Residential Handbook 2014
11