All you need to know about getting the most out of your property investment
Category Market Advice
ALL YOU NEED TO KNOW ABOUT GETTING THE MOST OUT OF YOUR PROPERTY INVESTMENT
In times of unpredictability, property remains a safe investment.
We have compiled some tips for new investors looking to establish a sound investment in the South African property market.
Despite the economic decline caused by COVID, investment in property remains a profitable long-term venture.
The progression of interest rate cuts since 2019, which were intended to boost the South African economy, has given rise to the lowest interest rates in years.
Tips to get the most out of your property investment:
The lower property prices have resulted in a buyer's market, so now is the best time for those considering investing in property.
Buying-to-let as an investment model:
Buying-to-let is the most accessible investment available to investors, with the profit potential to assist in creating financial freedom, generated from properties in a portfolio. With careful planning, buying-to-let proves to be the best way to retain and grow funds in the long term.
If the investment property is still under bond, then the rental income will go towards paying off the bond and for other expenses, such as maintenance costs. Therefore, when determining whether to invest in a property, make sure that what you are buying is going to generate the expected return on your property investment.
Buying quality properties makes for a good buy-to-let investment.
Here are 2 important points to consider:
- Know your target market - Identifying your target market is essential. By identifying and focusing on your target market, you will get a better understanding of what your tenant's needs, wants, and obstacles are. This helps you know how to cater for them and makes the potential tenant feel understood.
- Select your investment property carefully- location remains the most important factor when buying property to let. It's important to look out for areas where a high rental demand exists.
Buying and renovating properties to maximize profits
Purchasing older properties that have been neglected or have been standing empty for a long time and conducting renovations to attract tenants and get a good return on their investment. There are many ways to renovate older properties, from small improvements like updating home fixtures to larger undertakings, like knocking down walls.
The renovation that adds the most value to a rental property, would be renovating the kitchen. Kitchen Renovations are most effective at boosting a property's value. You don't need to spend too much money on top-of-the-line renovations, but by upgrading the kitchen's fixtures for a modern look and increasing its functionality, it will be appealing to potential renters.
Renters, also place a lot of emphasis on the look, feel, and functionality of the bathroom.
Most tenants look for an up-to-date bathroom and bathroom renovations can provide an affordable way to increase the property's attractiveness. Some of the simplest bathroom improvements, including replacing the toilet seat, adding a modern shower head, and updating the faucet and cabinets.
Shop around for the best deals on bonds
The experience of buying a new home can be quite daunting. So first do some sums to understand how much the investment property will cost you each month. Compile a budget to make sure you can afford it.
Shop around for the best deal and compare to make sure you get the best home loan with the lowest charges and best interest rates.
Don't just assume that your transactional bank will give you the best value for money.
Popular Property Types
Property investors need to be alert of trends in the property market. Property trends can be affected by political and economic factors.
For example, properties in gated communities and closed-off neighborhoods perform well all over the country due to Safety and security concerns.
Don't either allow yourself to become obsessed with certain property types or areas. Investing in a wide range of properties, in a variety of areas, will make your property investment portfolio less liable to be influenced by market fluctuations.
Take it slow
Remember that property investment requires long-term strategy and planning.
There is no quick way to make money or get rich quick through property investment, but you can grow wealth gradually and consistently by investing correctly.
No matter the economic climate, successful property investors, are those who have done their homework and invested in an area and a property that will yield maximum return on investment.
There are so many advantages to investing in property and it can make for a great long-term investment.
De Lucia Group has been servicing the property industry for over 45 years. Contact us to ensure you get the best advice for all your property-related queries. Michael De Lucia - michaeldl@delucia.co.za.
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The information contained herein is not intended to constitute advice and shall only be relied upon by you at your own risk. De Lucia Group does not guarantee the accuracy or completeness of any information posted in this newsletter or otherwise. Any information relied upon by you should be independently verified for accuracy. De Lucia Group reserves the right to change the content distributed or published without prior notice.
Author: De Lucia Group
