select
|

Property presents investors with a simpler alternative

Property investors who advocate that property should form a large part of their investment portfolio, say 25% to 30%, are regularly taken to task by others who prefer the stock market as an investment channel and are inclined to point out that, although property may be a reasonably ‘safe’ investment, its returns are very seldom spectacular.

“What such propagandists for the JSE Securities Exchange forget,” said Bill Rawson, “is the one simple fact that, whereas almost anyone can understand how property ‘works’, to be successful on the stock exchange requires hours of study and research. If this is lacking, the results can be disastrous, and for some people acquiring this expertise is too time-consuming and actually beyond their ability.”

By way of contrast, said Rawson, handling a property investment is fairly straight forward: once it has been purchased, a rental agent appointed and a tenant installed, it will in most cases ‘jog along’ fairly comfortably without excessive attention.

“There will of course always be cases where this does not happen, but in general property management does not require that much time – a once a month visit can be more than sufficient.”

Those who take his advice and go big in property, added Rawson, often ask the basic question of whether it is preferable to be in residential or commercial property (his own portfolio is weighted roughly 50/50).

“Commercial property,” said Rawson, “does at the moment give better rental returns than residential property, but, like the stock exchange, it does require certain experience.  Furthermore, it can be far more difficult to find a tenant in this sector than in the residential sector where they are usually thick on the ground.

“Then, too, the municipal by-laws governing the activities permitted in commercial and industrial property can definitely limit the landlord’s choice of tenant and the way in which the tenant has to operate.”

Although he and most of his colleagues are currently limiting their annual rental increases, said Rawson, it has been possible to raise them as much as 20% when a new tenant is signed on. This, too, would probably be unachievable in a commercial or industrial property at the moment.

Find the perfect investment property by using our Draw-A-Search


  Comment on this Article

  Please login to post comments

Post to my facebook wall
  
2000
Characters remaining


    Latest Property News
    • 21 Nov 2017
      The buying process is over, and the moving truck has delivered your household goods to your new property. Now it’s time to unpack and turn your new house into a home.
    • 21 Nov 2017
      When an offer to purchase a property is signed by both buyer and seller, this constitutes a binding agreement or “Deed of Sale” between the two parties. However, in most cases the “standard contract” might not be enough to cover all the specifics pertaining to the sale. The agreement may require some additions or alterations to clauses, which needs an expert hand in the drafting of such
    • 21 Nov 2017
      As more and more South Africans look to invest in property abroad, Spain is offering them one of the best deals in global real estate.
    • 20 Nov 2017
      Since 2012, sectional title complexes have been leading the South African property market, not only in terms of price growth, but sales volumes as well. Remaining relatively strong, even in the face of 2017’s political and economic turmoil, experts say this market segment could offer valuable insight into South Africans’ property purchase priorities.
    • 20 Nov 2017
      Regardless of whether you are purchasing your first start-up home, downsizing or moving in with roommates, finding ways to maximise small spaces can be a big advantage, says Adrian Goslett, Regional Director and CEO of RE/MAX of Southern Africa.
    • 20 Nov 2017
      Property valued at approximately R1 billion is on High Street Auctions’ sales floor during the month of November, including the much-anticipated sale of the Tshwane Mayoral Residence and the land occupied by one of South Africa’s oldest operating gold mines.
    • 17 Nov 2017
      FWJK has announced the launch of its latest residential brand, the Lil’ Apple, which will be launched simultaneously in two developments in Cape Town and Umhlanga totaling 600 apartments. The Lil’ Apple is set to be a brand of FWJK’s New York style apartments which will be rolled out nationally.
    • 17 Nov 2017
      It’s been a tumultuous year on many fronts, with socio-political uncertainty setting the tone for much of South Africa’s economic activity yet despite this and seemingly counter-intuitively, the residential property market has held up well.
        
    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