Interested in property investment in South Africa? These beginner tips may help

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Real estate, no matter what kind, that is purchased in order to generate income is considered an investment property. Both novice and seasoned real estate buyers are making use of the current market to explore property-investment options. It’s a savvy investment strategy for many and when done right, can yield outstanding returns. Factoring in the costs, risks, and estimating potential yield can be tricky, but doing your research and enlisting the services of an esteemed real estate agency like Fine & Country South Africa will make the process much easier, even in a volatile economy.

There are a few advantages to property investment

If you invest right, the property you select will be an appreciating asset that gains value over time. This makes it a good way to build wealth without needing to cough up an exorbitant amount of cash upfront. Factors such as location are key, however, because where you choose to buy properties is almost more important than the kind of properties you choose to buy.

Why buy-to-let investments are popular

Investors who opt for a buy-to-let property will purchase a space that they can rent out for a monthly fee. This generates income over the long term and buyers can use a home loan to finance the initial purchase without having to pay a large initial percentage out of pocket. Getting a great deal on your bond will allow you maximum returns, and any rental income you receive from your tenants will help you pay the home off. Earning enough from the rental income to cover your bond, building insurance premiums, and maintenance, while still enjoying a profit must all be considered. To get a better idea of the potential yield on a home, take a careful look at other rental prices on similar homes in the same area.

Flipping houses for profit

Flipping houses is a lucrative endeavour for those who enjoy it, and involves purchasing a low-value property, renovating it to boost its value, and then reselling it at a higher price. It is not something that requires full-time attention, and many investors do it to generate some money on the side. Buyers are also fully in control of the extent to which they want to upgrade the space. Even making small changes to key areas like kitchens and bathrooms will increase the resale value of the home. Location is key here, however, as it is far wiser to purchase a rundown residence in an affluent neighbourhood and then give it some curb appeal.

Diverse portfolios are safer

If you plan on investing in several properties, try to diversify your purchases. A broader range of investment properties not only gives one a greater chance of finding a strategy that works, but it means the portfolio is less vulnerable to fluctuations in the market. Look into commercial properties and new residential developments, as well as mixed-use properties in popular locations.

The best investment opportunities in 2022

It is currently a buyer’s market with banks competing for customers with superb home loan offers. Investors need to move quickly before more interest rate hikes and the impact of rising inflation occurs. It is a good idea to buy into the luxury property market, particularly near coastal regions and holiday destinations. More people are working remotely due to the Covid-19 pandemic and are looking to live in beautiful locations that offer them the feel of a permanent holiday. Estate properties are also a popular option because they offer a sense of community and improved security.

If you are keen on successfully starting a property investment portfolio, we at Fine & Country South Africa can assist you with superb, exclusive listings that are in high demand right now. To speak to our professional team, click here.