Best property for investment?
There’s an old saying that when buying property the three most important factors to consider are location, location and location. However a “good” location means different things to different people - some may value proximity to schools and work while others may value a more urban setting with less traffic and congestion.
But no matter where the property is located, you should consider the neighbourhhood – how close it is to public transport and other facilities as well as future development. You don’t want to invest in an area which may be negatively impacted by city development plans down the line. Security is also an important aspect so make sure the property ticks this box.
Cape Town, Gauteng and Durban are the most densely populated areas in South Africa. Many parts of the Western Cape have seen a rapid increase in property values over the past few years so is better suited for capital appreciation. This has been driven by the semigration trend, which has also had a positive impact positively on property values in surrounding areas such as the Overberg and the Garden Route.
Mixed use developments are an increasing trend allowing lifestyle and real estate to merge. People can live, shop and socialise without having to commute, and there’s the added bonus of security. These developments can achieve solid rental returns as can be seen in many parts of Gauteng such as Rosebank, Sandton, Melrose Arch and Foreways.
Whether one or two bedroomed units are more profitable is an issue for debate. The larger the property the larger the possible rental income, but it’s also going to cost more to purchase and maintain, so do your calculations before making the decision. Depending on location, purchase price, demand for rental units and many other factors, you could find a one bedroomed unit providing a higher yield! There’s no hard and fast rule.
Remember one golden rule, though: never pay more than the property is worth. Property prices generally follow economic growth, soif the economy stalls, so will property prices.
Whether you’re investing for income or for long term growth, take your time to do all the calculations so that you maximise your chances of success when you sign on the dotted line.
