In South Africa, real estate is almost always a good investment, and buying an apartment is an extremely savvy step to secure your financial future.
Join Seeff as we take a closer look at the benefits of buying an apartment on a buy-to-let basis.
What makes a flat a good investment?
Why invest in an apartment rather than in a house? For starters, think of the safety factors. Buying in an apartment complex typically means buying into a gated community, which means that from the outset, your investment has certain protections. Typical apartment blocks boast features like access control and security cameras, providing a safeguard against theft. Having neighbours close by, as your tenant almost certainly will if you’re investing in a sectional title apartment with the intention of letting it out, means that people will notice if something seems out of the ordinary.
Various amenities and a self-sustaining investment
Secondly, the amenities that come with living in many apartment complexes and sectional titles are hard to beat. Depending on the complex you choose, there may be a swimming pool, clubhouse, playground or fitness centre. This gives your home extra appeal in the eyes of a would-be tenant and you don’t directly have to maintain these facilities yourself.
The best investment is one that looks after itself, and if you’ve invested in an apartment, you won’t need to spend your weekends fixing things in a large garden. All exterior maintenance is likely to be taken care of by the body corporate.
Financial advantages of apartment investments
For those making their first real estate investment, investing in an apartment can be more affordable than buying a house. If the block is well maintained and has good financial records, then the value of your investment should increase over time. Thanks to security concerns, the popularity of sectional titles and apartments in South Africa will continue to be resilient.
Quick reasons why apartments can be a great investment
- An apartment investment comes with far fewer risks than other real estate types, including retail and offices.
- If you choose the right type of apartment in the right area, it is typically easy to find a reliable tenant. Great types of apartments include one-bedrooms in urban areas and two-bedroom apartments with ample parking in suburban precincts.
- An apartment is a physical asset that will provide immediate dividends in the form of rent payments. In the long term, once you have paid it off, it will add to your asset base.
Frequently asked questions about investments and real estate
1. What is a rental yield?
To calculate the rental yield on a property, simply take the amount of rent you’re earning in a year and divide it by the property’s value and express the answer as a percentage. So, on a R1 000 000 property on which you are making R10 000 per month, the yield would be 12%. However, it is important to consider this number along with the possible long-term growth of your investment.
2. Is South African real estate a good investment?
Property investment in South Africa remains both safe and profitable. Bricks and mortar are a reliable way to grow your asset base. Buy-to-let is described as “the bread and butter of real estate investment” and while there are risks involved, such investments can lead to long-term revenue streams.
If you’re interested in investing in an apartment, Seeff is your ideal property partner. We have decades of experience in helping South Africans grow their wealth through real estate investments. Contact us today for more information.
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