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dgb861

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Morning all,

I am looking to invest some spare money and am looking at property. I am Pre-approved for around 2 million on a bond, but would rather look in the 1 - 1.5 million range.

A few questions for experienced property peeps here:

1. Is buy to rent worth it? (I would like to use an agent, managing the property is not my cup of tea).
2. Apartment or house?
3. Areas in Cape Town? I have been eyeing out Woodstock/Plumstead/Tableview/Milnerton. Royal Ascot seems to have some good deals.

Any other advice would be great.
 
1. Depends who you ask. There are haters and there are those who make good money out of it
2. I would go with apartment/ townhouse. Less maintenance hassle , more control
3. Cant help you in CT
 
There are some good tax free investments in woodstock. Otherwise my wife and I had a place in royal ascot, good built places, close to the cbd and Northern suburbs, bought for 1mil and sold for 2.55.
 
Thanks,

paul5186 said:
There are some good tax free investments in woodstock. Otherwise my wife and I had a place in royal ascot, good built places, close to the cbd and Northern suburbs, bought for 1mil and sold for 2.55.
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Did you find Royal Ascot to be safe? Not sure if there are internally good/bad areas.
 
I feel this forum is the wrong place to ask advice about this subject. As was proven various post and threads in the past. Most people on here that bought a home for investments purposes, is under the impression (or should I say illusion) that ROI from property is via your tenants. Which isn't true at all.
Where ROI from property, is growth over time, where your tenants is suppose to be a means of sustaining the property and negate interest if you have a bond.
That's why most would buy property, and then when it's time for the yearly rent negotiations, gets angry when a tenant ask if they can up the rent by 5% instead of the agreed upon 10% (some even 20%).

So my advice, make sure you can afford the installments, even if you're without tenants for a long time or even if the rent doesn't go up by 10% or more. Insure geyser and structure!
 
beans100 said:
Most people on here that bought a home for investments purposes, is under the impression (or should I say illusion) that ROI from property is via your tenants. Which isn't true at all.

Where ROI from property, is growth over time, where your tenants is suppose to be a means of sustaining the property and negate interest if you have a bond.
Click to expand...

Thanks for the advice, although I the two points are conflicting. If tenants allow you to negate interest (or parth thereof), then there is ROI from doing this, its likely just not your MAIN ROI, depending on the growth of the area.

Would ensure all structures are insured, hoping to find a letting agent that will take management off my hands though. My work keeps me very occupied.

PS if you can link other threads where this has done awry i'd appreciate it, easier to learn from other peoples mistakes :)
 
dgb861 said:
Thanks,



Did you find Royal Ascot to be safe? Not sure if there are internally good/bad areas.
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Very safe, was happy to walk around at night which is my test for safety. Only one Road into royal ascot and patrol cars. You won't have an issue renting out the place as it's perfect for people working in century city, town or tableview. It's also cheaper than the over priced century city. Though it's not "cheap" anymore.
 
beans100 said:
Not very good at searching this forum. Could find some stuff, but nothing yet to back my "allegations" :D:whistle:

Some to good reads, while I search for the ones I'm referring to:

Rental-price-increase-10-or-less
Late rent

EDIT: Here is one of the threads I was thinking of: LINK
Click to expand...

I do agree with most of what you said :D I will be buying under what I can afford, and I am in the lucky position of having no debt and a stable job. I can easily manage the property even if it were untenanted.

Will read the links - thanks for the effort
 
paul5186 said:
Very safe, was happy to walk around at night which is my test for safety. Only one Road into royal ascot and patrol cars. You won't have an issue renting out the place as it's perfect for people working in century city, town or tableview. It's also cheaper than the over priced century city. Though it's not "cheap" anymore.
Click to expand...

Yeah century city is insane, will strongly consider Royal Ascot, thanks for all the info.
 
DrewChan said:
I do agree with most of what you said :D I will be buying under what I can afford, and I am in the lucky position of having no debt and a stable job. I can easily manage the property even if it were untenanted.

Will read the links - thanks for the effort
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You obviously don't have kids (yet) ;-)
 
1. Is buy to rent worth it? (I would like to use an agent, managing the property is not my cup of tea).
Buy to rent is a gamble, the wrong tenant can completely destroy your property or worst end up squatting, for months while lawyer fees pile on. This is not usually covered by the agent. On the other hand you can find the perfect tenant and they'll stay around for many years with no issues...

2. Apartment or house?
Sectional title or apartment

As mentioned above the goal is after 20 years to have a fully paid property under your name that has grown in value significantly. Find a decent property in an area that you expecting to gain significant value and pay minimum installment on the loan every month and write off costs such as interest on loan (you cannot write off the monthly home loan payments), levies, rates, repairs, when submitting tax return, this will probably require you to register as a provisional tax payer. Also Capital Gains Exclusion when selling only applies to your primary residence you staying at so selling the property at a profit makes it liable for tax.

Also consider maxing out your retirement contribution to 27.5% and TFIA allowance to squeeze back some money from the tax man...
 
beans100 said:
Where ROI from property, is growth over time
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The value of the property is going up yes:
Growth.png


But if you look under the hood - you realise it hasn't actually grown in the last decade in terms of real growth.
Growth2.png

And that's not even factoring in what the ZAR does.

That plus the sketchy tenant biased rules make me think a listed property fund is a better idea.

I can see the appeal in owning property though on a basic level - there is something tangible about it. Just saying it's a little thin from the numbers side.
 
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CBD parking bays otherwise I will wait a few months before committing, the market is very hot in my view.
 
saturnz said:
CBD parking bays otherwise I will wait a few months before committing, the market is very hot in my view.
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I will deny ever saying this, but if you insist on property:

I'm with saturnz on this one

No squatters to evict (just a vehicle to tow) and not much maintenance, man, if I was in CT I'd get one.
 
supersunbird said:
I will deny ever saying this, but if you insist on property:

I'm with saturnz on this one

No squatters to evict (just a vehicle to tow) and not much maintenance, man, if I was in CT I'd get one.
Click to expand...

There are alternative motives to the property (aging family), That being said, where do I view these parking bays for sale :D

This is probably discussed all over this forum, but where else could I shove 20k per month going forward? Right now I am just plopping into an fnb savings account at 5% interest. Looking for short/medium term.
 
DrewChan said:
There are alternative motives to the property (aging family), That being said, where do I view these parking bays for sale :D

This is probably discussed all over this forum, but where else could I shove 20k per month going forward? Right now I am just plopping into an fnb savings account at 5% interest. Looking for short/medium term.
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gumtree.co.za
 
Suspect99 said:
Where do you find parking bays for sale?
Click to expand...

I found a bay on propery24 for dirt cheap two months ago, I already have offers which will bring in a return of over 100%. Gumtree also has bays that come up from time to time.

you can also find ads placed on notice boards in buildings with parking bays, speak to the building manager and so on

the new development catering for students in Albert Road will also be selling bays for R250k

you can also try cold calls, I managed to find bays that way too (basically calling the person whose name the bay is reserved for)

a few months ago there were storage units for sale as well in four seasons and they were decently priced.

so yeah there are lots of units available if you know what you are looking for
 
saturnz said:
I found a bay on propery24 for dirt cheap two months ago, I already have offers which will bring in a return of over 100%. Gumtree also has bays that come up from time to time.

you can also find ads placed on notice boards in buildings with parking bays, speak to the building manager and so on

the new development catering for students in Albert Road will also be selling bays for R250k

you can also try cold calls, I managed to find bays that way too (basically calling the person whose name the bay is reserved for)

a few months ago there were storage units for sale as well in four seasons and they were decently priced.

so yeah there are lots of units available if you know what you are looking for
Click to expand...

Thanks for the info. Will definitely look into this
 
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