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Savvy Property Investor
Great News for the Savvy Property Investor
The market is rejoicing at the fact that we are drawing closer to the end of a difficult year. For the savvy investor however, there has never been a better time to invest in the property market than the present. It’s a buyer’s market!
The most fundamental time to invest in property is when the prices are low and the demand is high. This is the time investors make the most money in any property cycle. Here in South Africa that time is right now as we’ve just entered the beginning of the buyer’s cycle.
There are a number of ways one can invest in the property market but the two most common are long-term and short-term investments.
The long – term investment strategy satisfies investors looking to earn a passive income by acquiring tenanted property. The trick is to purchase property at a level where the nett rental income is sufficient to cover the monthly bond repayment. When buying consider the following;
1. What is the demand for rentals in the area?
2. If in a complex are the levies reasonable and are they being managed correctly?
3. Is there an oversupply of rental units in the complex?
4. Is the neighbourhood secure?
5. Put yourself in a tenant’s position, if you were in the market would you rent the property?
The short – term investment strategy is simple, buy low and sell fast at a premium. The term for this is ‘flip the property’. There are a few factors one needs to consider when flipping property;
1. Check out with local agents what is the sales demand is
2. If you have the facility, pull an SAPTG report to establish movement in the area
3. Be sure you have a buyer in the wings
4. Flip the property for a fair profit; don’t be greedy it could incur unnecessary holding costs
5. Don’t forget transfer duty when you purchase and capital gains tax when you sell
Now here’s the good news, Reliance Auctions has property available that will satisfy both the long-term and short-term investor. Check out our website for all our upcoming auctions.
David Soutter
CEO