The global investment sphere has been on an unpredictable path over the past two years. Even experienced investors are not sure if the best investment in this erratic market is shares, unit trusts, property or cash. Is it still worthwhile to buy a two bedroom duplex? Will the rental income cover your bond installments? The most important aspect to think about is the location of the property. You can expect to pay more for a duplex in Sandton in Johannesburg than for a similar property in Bellville in Cape Town. However, the location will also have an impact on the rental income you will receive. Another factor to keep in mind is that while the rental income may cover your bond installments, other costs like levies and the electricity bill also have to be considered. Let’s look at a practical example. Your estate agent recommends that you consider a duplex for sale in Brackenfell in Cape Town as well as a similar property in Germiston, Johannesburg. Both properties have two bedrooms, two parking spaces and are around 65m2. The purchase price is R375 000 and R350 000 respectively. While you can expect a rental income of around R2 700 in Brackenfell you can expect a rental income of R3 500 in Germiston. If the levies are R500 per month in both instances, you can anticipate that your shortfall (the amount that is not covered by the rental income) for the property in Brackenfell will be more. That automatically means that you will take longer to reach a breakeven point – in other words the point where the rental income will cover your bond installments and other expenses. It is also important to consider that there may be some months when your property will be empty or times when you don’t receive your money on time (or not at all!) and in that case you should have enough cash to cover the payments yourself. You can also consider a reliable rental agent – this person will usually check a prospective tenant’s credit record. If you are not sure about the calculations ask a professional to help you. It might be worth your while if an expert can supply you with all the relevant information. Each case should be considered on its own merit.
Is It Worthwhile To Invest In A Two Bedroom Duplex?Private Property Reporter • Sep 9, 2010
Why you should be concerned by the Expropriation Bill
The new bill, which is about to be passed into law, gives the state the power to expropriate any property and pay you what the government thinks it's worth.
Grand Designs Live on trend
Grand Designs Live has evolved to become one of the premier home and garden events on South Africa’s calendar. This year’s event proved that the show is still very much on trend.
Win A Home Season 3 EP7: Estate Living
Curb appeal goes digital
When selling your home, first impressions count and now they're online.