How to make the best property investment you possibly can?
Category Advice
Even though there are sometimes opportunities to do a quick turnaround on a property, most property investments should be approached as medium- to long-term projects.
It is important for you to consider the current economic climate and its relevance to property matters before you buy a property. Not only is it important for you to consider the current economic climate and its relevance to property matters before you buy a property, but you should also keep in mind that a property should usually be owned for at least five years before selling it.
This is what you always need to do before you buy a property:
- Study various potential areas and consider what has happened in those areas before deciding where to invest.
- Engage with area specialists regarding potential growth as well as actual historical capital growth in the areas they are interested in.
- Determine what potential rental income different areas offer.
It is also essential that you answer these questions after studying a specific area:
1. What is the average house price in the area, and can I afford to invest here?
2. What does the historical capital growth show?
3. What is the growth potential, and what kind of rental is achievable?
Another important factor to be considered is the condition of the property and the potential maintenance costs which need to be factored into an investment calculation. It is always a good idea to allocate a certain amount of money for ongoing maintenance of a property - if this is not done, the capital value of the home will decline over time.
The type of accommodation, for example, a freestanding home, an apartment or a cluster home, should also be considered as each of these categories has a cost structure for rates and levies that also forms part of the ongoing maintenance process. In general, some of the best property investments at the moment include investing in security estates because of the high demand due to security and lifestyle offerings.
Alternatively, sectional title properties close to public transport like the Gautrain, good schooling, shopping centres and work opportunities are also a good investment spots because of the high rental demand these properties enjoy.
Suburbs that aren't secure, that have not shown any growth and are not within a reasonable distance of good schooling, transport, shopping centres and work opportunities are risky investments.
Author: Extracts - Property 24
