- Aug 23, 2013
I doubt the grow above inflation in the next few years, most of e.g. Cape Town property prices were too bullish. You won't see rental prices decrease much or property prices either, it's more that they will not grow to match inflation until they reach a better equilibrium.Lets put this in perspective. I too purchased a flat in 2000. For R205 000. It's now worth about R1.2m. I get more than R8000pm rental on it now. I will be honest, rentals got hit in the last year or two.
But - it's consistent income. That normally grows over and above inflation. And that excludes the capital growth.
I'm not sure who will be renting a lot of the apartments in e.g. Sea point, was already high vacancy there with most AirBnB, property prices are way overvalued compared to rent cost, your bachelor pads are students and people in their 20s, they're not high in their career path, and lots of them will now be leaving South Africa if they can, those that can afford sea point are generally from well off families or will work from home in a house that's way cheaper with more space somewhere else.
Know a few who have already done it, last two people I know who own apartments in sea point and live in them are on the path to emigration, and I used to know quite a few there.
In regards to tenant credit history to make an informed decision, lots lost their jobs during the pandemic, it will reflect on their credit report, they had no option, it will be very interesting how you'll manage to vet them all.