If it’s done right, investing in property can be one of the most lucrative investments that a South African can make. There are a number of factors that must be considered before you become a property investor.
These factors include your strategy, your finances, the specific property that you plan to buy and the tenants that you choose once your investment property is yours. Seeff, a real estate agency widely experienced in helping property investors reach their goals, provides a guide to everything you need to know to succeed as a property investor.
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First things first: get your strategy straight
If you’re buying a property with the goal of renting it out, your strategy needs to be retaining your asset over the long term and eventually accessing the equity within this asset, using this equity to acquire more assets. On the other hand, if you’re planning to improve the property and flip it for a profit, you need to bear in mind that while this project will be short-term, it will be labour and money-intensive and you’ll need to put all your energy into maximising your profit.
Consider your finances
Before you jump into becoming a property investor with both feet, consider the financial obligations that it creates. While the ultimate goal is to make profits and generate wealth, there may be some short-term expenses that shouldn’t be underestimated. For example, if there are months when your property is vacant or your tenant does not pay their rent, are you able to bridge the gap without placing strain on your own household? You also need to have cash in reserve to pay transfer fees, any legal costs and for the maintenance of your property.
Pick your investment property smartly
One of the most important keys to smart property investment is choosing the right property. Investors need to find properties that will enjoy high capital growth, and these properties need to be situated in high-growth nodes in which people who have growing expendable income want to live. It is ultimately through capital growth that you will create equity and wealth.
With their decades of experience, Seeff’s property practitioners are based in every corner of South Africa and can help you find an investment property that suits your budget and will ultimately play a role in growing your wealth.
To provide an example, Rosebank in Gauteng, with its upmarket ambience and array of amenities, is a residential node destined to be profitable. Rosebank’s latest development, Park Central, offers luxury apartments from R1 990 000. These apartments boast all the amenities that tenants are looking for, including safe parking, 24-hour security, a gym, WiFi, backup water and electricity supplies and storage facilities. The fact that these apartments have sophisticated kitchens and bathrooms will help to sweeten the deal even further for your future tenants. To make this even more appealing to savvy investors, since this property is a new development, no transfer duties will be payable.
Get the right tenants
Growing your asset base by becoming a property investor is a fantastic way to grow your wealth in the long term. In the short term, however, a troublesome tenant can make your life extremely difficult. Make sure that you have proper rental agreements in place and vet your would-be tenants thoroughly. Enlisting the services of a rental agency can save you many headaches in this regard.
Becoming a property investor is an excellent way to build your wealth and secure the future for yourself and your family. If you need advice or help in finding the perfect buy-to-let or buy-to-flip property, contact Seeff today.
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