What to consider before signing on the dotted line
10 December 2021
What to consider before signing on the dotted line
Five insider tips on how to choose an investment property
Property remains one of the safest long-term investments you can make – if you do it right. From the obvious to the complex, two experts provide insight into what to consider when making your decision.
1. Location – People reassessed their priorities during the pandemic, resulting in a marked trend towards a more balanced lifestyle, says Phil Barker from Renishaw Property Developments, developers of Renishaw Hills’ mature-lifestyle village on KwaZulu-Natal’s South Coast. “As an example, coastal properties with good views and a sense of surrounding space are attracting increased attention.
Research such trends when making your decision.” Jean Ehlers, residential director at Devmark Property Group, agrees that location is paramount. “If you’re buying a property to rent it out, its success will be highly dependent on the area – you need good rental demand. The main metropolitan areas in South Africa remain a solid choice in this regard.”
2. Security – Security is the prime concern for most buyers and tenants in the country and should be part of your planning. “While location can ameliorate crime concerns to some extent, consider well managed gated estates with modern, top-class security features,” suggests Barker.
3. Affordability – Ehlers says property prices have escalated significantly over the past 10 years in some of South Africa’s major metros, making affordable investments harder to find. “While searching for value is important, do not buy a cheap property simply for the sake of transacting. These properties are usually cheap for a reason. Search for quality properties in the upper end of your budget.” Barker adds that you should also consider your target renter market. “Understand their needs and select a property that they will consider excellent value for money.”
4. Services and management – Local government structures have significant challenges in meeting basic service provision needs, says Barker. “So, consider developments that are selfsufficient in the provision of power, water and waste removal services.” Ehlers says
property management will also be crucial. If you don’t have the time or means to manage it, outsource this to a professional.
5. Investment goals – Real estate is not a get-rich-quick investment, says Ehlers. “Property investment should be done with a 5–10-year outlook, at least. Consider both capital growth and yield when making a decision, both factors are important.”