Troll
Because the property market is struggling and you get higher returns through other investments AT the moment.
They also recently showed that the average ROI on renting is about 3%
For Hannes.... I am MJH
Hamstertjie.....
I have not attended 1 course from Hannes. So I have no vested interest.
Now.....
Who are "they.....showed..."
Then...It does not matter in wich cycle you find yourself, if you are a property professional you know what to do. This is 2 odd years later from your post, but still relevant.
Now. For some advise on real estate.
When you dont know about the variables & dont understand its implications....dont comment BS regarding 3%. Where is this (dont tell me SA....be specific) Gugulethu or Camps Bay or Constantia Upper or Brackenfell. Slippery. Careful.
Now you wanna tell me that when I aquire a property of R1,400,000 for R838,900 (>>Costs(aka my investment) R100,000<<) with a deposit(which is not needed),the entity does not fall under the new credit act, and there is a bond of R838,900 with a rental of 0.8%(on 1.4mil) or R11,200pm,rates tax R664pm & other expenses of R320pm. I got owner financing of*** R400,000 through a lien*** (No monthly payments ,prime plus 2% compound interest/year payable after 10 years OR 32.28% (R400,000/R1,238,900) of Value of property after 10 years....whichever is highest). I can increase property value immediatly with new undercover parking,flatlet,seperate entrance and free uncapped wifi, paint, 55INCH LED main house fixture and other misc. Cost = R400,000. New value of property R2,350,000. The R400k is bonded.
NEW
Main rent R12,400pm, addition flatlet(76m2)R6,800 Total R19,200.
BOND R838,900 +R400,000 = R1,238,900 thus R11,055pm
Wi-fi R1500pm
Munisipal R1300
19,200-11,055-1500-1300 = R5345pm PROFIT pre tax..?...?...
R5345 pm income . R64,140 per year / >>Costs(aka my investment) R100,000<< = 64,1% ROI
THAT IS NOT THE ONLY ROI FOR YEAR 1 (15 MONTHS)
I HAVE IMMEDIATE EQUITY OF 67,72% on R2,350,000 = R1,591,420 and MINUS my bond of R1,238,900 ......... THUS R352,520
So after 3 months from doing this deal I made R350,000 FOR MY R100K
Is that not 250% ROI in 3 months WITH 64,1% ROI ADDED FOR RENT ???
SHOW ME WHERE "...you get higher returns through other investments AT the moment."
SHOW ME!!! AT ANY MOMENT!!!
PS. This is not a great deal, just fresh in my memory.
****The owner was informed that his investment of 32.28%(R400,000) was worth after 3 months R758,580... thus giving him an effective selling price of R1,597,480....YES I offered him R197,480 more than he asked......therefore I got an offer to purchase signed at R1,238,900 while he carried 400k. For this AND future growth which he will enjoy on 32,28% of R2,350,000 for the next 10 years.......THE RENT IS MINE.
MYSELF AND ORIGINAL OWNER WILL EXIT THIS INVESTMENT AFTER 10 YEARS (maybe)****