Western Cape Business News

Send  Share  RSS  Twitter  17 May 2010

PROPERTY: Investment Property Need Not Cost A Fortune


Recent Western Cape Business News

As confidence begins to return to the local property market, investment buyers are once again beginning to explore the opportunities on offer.  Pam Golding Properties’ MD for the Western Cape metro region, Laurie Wener, says although the market is not yet showing measurable capital growth, there are still ample opportunities for a sound investment for those taking a long-term view – and, she says, it need not require a multi-million rand outlay.

The Cape Town metropolitan area offers opportunities for all level of investors in the current market,” says Wener, “and that includes buyers at the lower end of the market.  There is a perception out there that it’s only those with deep pockets who can afford to invest, mainly in top-end, luxury homes.  But in fact, there are plenty of good buys in the sectional title market, where investors can spend wisely and expect good returns, even below the R1 million mark.  Given the current difficulty of obtaining mortgage financing, the rental market is flourishing in many areas, so there are good possibilities for steady, attractive rental return with future capital growth.  The bottom line is that a good, clean, secure apartment will not stand empty for long.”

Wener advises that investment buyers should view their purchase as a medium- to long-term one, and not expect to make a profit on a quick turnover.  “It is also crucial to be sure that you are able to sustain the financing of the property for this period, and that you are not over-extending yourself, taking into account possible increases in levies and rates.  We would ideally advise that investment buyers have at least 60 percent cash equity to reduce their risk,” she says.  “Buying in one of the traditionally recession-resistant areas is advisable, and if purchasing in a sectional title complex, it is essential that buyers ensure the building is in good condition and is being well-managed.”

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