select
|

The golden rules of property investing

Despite many changes in the property market in recent years, there are some “golden rules” that investors need to keep in mind. So says Adrian Goslett, CEO of RE/MAX Southern Africa, who adds that while the emerging market has presented some great investment opportunities, buyers need to be careful and make the right decisions to get the most out of their property purchases.

Do your homework

The first question you need to ask is why you are buying the property. If you are buying the property to live in, your perception will be emotionally influenced by things that appeal or don’t appeal to you. If you are buying the property to lease out, aspects that appeal to would-be tenants such as easily accessible transport and proximity to shops should take precedence. Although the Internet can act as a valuable tool in this regard, Goslett says nothing replaces checking out a location for yourself, preferably more than once and at different times of day.

It’s the little things

Subtle differences between two areas can impact the property price. Notes Adrian: “It is vital that buyers understand why property values differ from suburb to suburb or even in some cases from street to street. It’s better to purchase a property that costs less but which is located in a sought-after area that offers more, than to purchase an expensive property in an area that has limited appeal. A property’s location will have more impact on its appreciation potential than the house itself.”

He adds that buyers who are looking at purchasing an investment property with the intention of renting it out need to remember that different things appeal to different people and that identifying their target market is essential. Investment buyers should also look at how much rental stock is available in an area before purchasing a buy-to-let property. If the area is saturated with buy-to-let property, chances are your investment will fall flat.

Back to basics 

Sound property buying principles never go out of fashion. These include aspects such as the property’s location, the value per square metre and the potential rental yield – these will always be the key criteria on which an investor should make a decision.

Have a plan

From an investment perspective, investors need to think about where they would ideally like their portfolio to be in the long-term. Setting goals will assist buyers to remain focused and will give them something to work towards.

Dump the debt

Although there are a fair number of cash buyers in the market, the majority of buyers will require financial assistance from a bank to purchase a home. Adrian says that buyers can ensure that their application for finance has more chance of success by reducing their debt levels and keeping a clean credit record. Having a deposit is also a must for those looking to purchase property.

Would you live there?

While the potential to make a profit on a property purchase is important, it should not be the only factor that is considered. Adrian points out that the basic principle of purchasing a property is that if you wouldn’t want to live in it, it’s not likely many others would either. The property has to appeal to the buyer and they have to want to own it or lease it.


  Comment on this Article

  Please login to post comments

Post to my facebook wall
  
2000
Characters remaining


    Latest Property News
    • 19 Jun 2018
      In the current market, letting out a property can be a good option as rental demand remains strong, especially in the northern suburbs of Johannesburg. This is according to Chris Renecle, MD of Renprop. However he says that before homeowners let their property out, there are five key points they should make sure are covered before they market the property for rent and sign any lease agreements.
    • 19 Jun 2018
      The Capetonian dream is to live by the ocean with the iconic mountain making an appearance somewhere in the horizon. But, that dream comes with a hefty price tag that many simply cannot afford. But, should you venture some kilometres out of the city centre, entirely new realms of beachside bliss await you …
    • 19 Jun 2018
      Douw Steyn, one of the richest men in the country, recently allowed a rare glimpse into his Fourways Palazzo when it was featured on the SABC lifestyle programme Top Billing - and it is beyond your wildest dreams!
    • 18 Jun 2018
      Many home sellers are motivated to appoint estate agents because they know that the agency will carry the costs of advertising and marketing their property.
    • 18 Jun 2018
      When a property is sold when it has a tenant in occupation, the questions often raised are: “What happens to the tenant if the landlord sells the property?”, and what rights the tenant will have with regards to cancelling the lease or enforcing it, says Sunell Afrika, rentals manager for SAProperty.com.
    • 18 Jun 2018
      Sellers are often caught off-guard by the expenses incurred in the selling of a property. Just like there is no such thing as a free lunch, there is also no such thing as selling your property without incurring at least some costs.
    • 15 Jun 2018
      The second quarter of 2018 has proven to be the turning point for Midrand’s real estate market, especially the upper end which started to waver towards the end of a tumultuous 2017 with a notable drop in both sales and average selling prices.
    • 15 Jun 2018
      According to data recently released by FNB, the average age of a South African home buyer has increased from 38 to 44 this year. In an attempt to help first-time buyers enter the market sooner, Adrian Goslett, Regional Director and CEO of RE/MAX of Southern Africa, walks us through the steps of saving for your first home.
        
    X
    Subscribe to the MyProperty Newsletter

    Name  
    Last Name  
    Email Address  
    Email Frequency
    select
    X
    Share this Page

       
    For Sale Property
    Rental Property
    More Options
    About
    Connect with us
    FEEDBACK