SA 'obsessed' about property

EtienneK said:
Please tell me where I can get this 11-13% return you speak of.
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In most industrial unit trusts and ETFs you got 40% return in 2012 and in 2013 one could have gotten 50% growth in unit trusts investing in overseas assets. Obviously those boats have sailed, but the point is it sure is possible.
 
davemc said:
What a bullsheet article.
In other countries, there is no land left, every little bit has been bought up and you have no choice but to rent.
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Or buy from someone else... like you would here...
 
Messugga said:
I got 14% in the last two months doing gold (which I sold yesterday). Had a bit of spare change and felt like doing something other than unit trusts and the like. Funnily enough, the gold did the best by far, out of all my investments, even though everyone advised me not to go for it. Sort of regretting not having bought more at the time, but hindsight is 20:20.
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Thats not bad considering how much gold has dropped in value over the last year.
 
ghoti said:
Thats not bad considering how much gold has dropped in value over the last year.
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It was pure luck. Climbed in right before the rand went wrong end up, which is at least partially the cause of the increase in value. The price in US$ hasn't changed so significantly during that time - maybe $50
 
early this year....dumped some cash into some google, and later apple shares through the etoro platform...-must admit, they are performing well, and as the ZAR nose dives....have my fingers in a couple of other pies as well.....returns are bit better than what I am getting from my fix deposits.
 
Devill said:
I tend to agree mostly BUT if you rent for R3-4k less, a month, and invest that at around 11-13%, instead of gaining net growth of 4% on property of say R10k/month you are close to breaking even. People however mistake this as meaning I can rent and not invest the "difference" that I am saving and still break even.
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Assuming both renting plus investing vs purchasing occurs over a 20 year period.
I think that you are forgetting the fact that rental increases every year.
And the time value of money will decrease the actual value of the investment.
The property will most likely increase in value (but again needs to be set off against the time value of money).
Without taking time value of money into account. If you invest R3 000 per month with constant returns of 13% pa, and rent for R8 000 in your first year (assuming 6% pa increase) after 20 years you will actually end up with a deficit.
Granted there may be other factors to be taken into account here, but I kept all things constant for the sake of simplicity.
 
droidx said:
Assuming both renting plus investing vs purchasing occurs over a 20 year period.
I think that you are forgetting the fact that rental increases every year.
And the time value of money will decrease the actual value of the investment.
The property will most likely increase in value (but again needs to be set off against the time value of money).
Without taking time value of money into account. If you invest R3 000 per month with constant returns of 13% pa, and rent for R8 000 in your first year (assuming 6% pa increase) after 20 years you will actually end up with a deficit.
Granted there may be other factors to be taken into account here, but I kept all things constant for the sake of simplicity.
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Very true. But this could be off set by the interest that accrues for the the buy, vs the interest received from day one with the investment. Also a part of the cost does appreciate ie. Levies.

It is not as simple as I tried to show, nor does it fit all scenarios.

Here is some thought, I do agree with some of the things the author says but not all, also some of the things are outdated, like the dividends earnings being tax free.: http://www.fin24.com/Opinion/Columnists/Guest-Columnist/Rent-dont-buy-20110207

But the fact of the matter is it depends on your needs and want.
 
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Devill said:
Very true. But this could be off set by the interest that accrues for the the buy, vs the interest received from day one with the investment. Also a part of the cost does appreciate ie. Levies.

It is not as simple as I tried to show, nor does it fit all scenarios.

Here is some thought, I do agree with some of the things the author says but not all, also some of the things are outdated, like the dividends earnings being tax free.: http://www.fin24.com/Opinion/Columnists/Guest-Columnist/Rent-dont-buy-20110207

But the fact of the matter is it depends on your needs and want.
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Valid points. I'll read the article when I get a chance. It's always good to see things from a different perspective.
 
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