South Africa is one of the economically advanced nations in Africa, and one of the pointers is its booming real estate market. Buying properties in South Africa is a good investment despite the recent deleterious view about the country. Cities like Johannesburg, Cape Town, and Pretoria, are places where you can get quality properties to invest your money. Before releasing money to invest in South African real estate, you need to make a thorough inquiry about the location and the market value of real estate to afford the loss of money. This article is about the Top 10 Best Guides for investing in South Africa Real Estate.
TOP 10 BEST GUIDES FOR INVESTING IN SOUTH AFRICA REAL ESTATE 2020
The essence of this piece of writing is to provide you with some guideline that will ensure you take the right step before investing in South Africa Real Estate.
- Be realistic
Making your first property purchase is a beautiful experience; the process will not always be easy. It is essential to be realistic when thinking about investing in South African Real Estate. You need to understand the commitment, effort, time and importantly, the financial affordability, that will be required of you both as you start and in the long run. This is the first steps to being ready.
- Weigh the Pros and Cons
It is vital to assess the benefit and risk of an investment before investing in it. This is important because investing in real estate is a long term investment and one that must not be done lackadaisically. The goal of investing in real estate is to make money, and as such, you shouldn’t put yourself in a condition whereby you’ll have to hastily resell the property within a short period of acquisition to avoid loss or low-profit yield.
- Find Professional Partners
You need the help of professionals especially when you know little or nothing about Investing in South African Real Estate and locations where properties appreciate the most. Finding dependable builders, lawyers and accountants are key to maximizing your profits and will also offer you peace of mind during a complex process.
- Become Tax Efficient
To avoid paying multiple taxes or paying more than you ought to have, you need to consider speaking to a tax advisor on the best options for buying a property and the means of saving tax on your rental income.
Location is an important aspect to consider before Investing in South Africa Real Estate. Not every location is well developed or has a good market for real estate and neither can you find quality properties. It is imperative that the property you’re buying is located in a desirable place to keep its resale value rising and also, location is a determining factor in how long a feature takes to sell. A suggestion of some location is Cape Town and Cape Province where the market of properties is encouraging.
- Timing is crucial
A lot of times, investors make an emotional investment in a property before they are financially ready to start the process. It is important not to rush but be wise to choose your option. The reason is that investing in real estate is a long term plan and will have a massive impact on your finance. When it comes to home-owning or a rental property, timing is key. Ideally, you need to be ready to buy, but you should exercise patient if necessary. Also, make enough inquiries, research and find the right property, as you do not want to be caught in the web of indecision or wrong decision.
- Know your capabilities
Know your jurisdiction and know what you are capable of handling. If you believe are expert in the area of negotiation and purchasing price of real estates, prepared for a quick improvement of the investment you bought or you are a patient investor who is willing to tie up their money for many years to see if the value of the property will appreciate, in all these, your capabilities will determine the type of real estate investor you are.
- Consider Buying a To-Let Property
Investing in a To-Let property is one of the easiest ways to Invest in South African Real Estate. This option lets you lease out the property to tenants who pay you on a monthly or yearly basis in return depending on your agreement with the occupier. Considering housing affordability is essential when opting for the buy a to-let property.
- Consider Buying a Listed Property
Purchasing a listed property is a better alternative if you don’t want to deal with the meticulousness of managing tenants. You can directly invest your money into a property fund, which invests in publicly-listed real estate companies instead of purchasing a physical property. This option has a lot of upsides because it gives you access to a variety of assets, including residential, retail parks and industrial. Also, you can have stocks in different properties types such as shopping malls, office blocks, and townhouses.
- Consider Buying a Residential Property
You should also consider investing in residential property when Investing in South Africa Real Estate. Residential property is a robust and a better option for investors that are less experienced with limited property experience.
Pros of Investing in South Africa Real Estate 2020
- High Property Rental Rate
Due to high inflation, the majority of South African citizens opt to rent instead of buying a residential property which opens up the real estate market. Thus, the to-let property is increasing especially in the major cities in the country and investors that will earn a substantial amount and make profits.
- Top Tourism country in Africa
South Africa records a high influx of visitors who troop into the country for a visit, tourism. These people need a place to stay for a short time they’ll be in the country before returning to their state of residence. This makes investing in South Africa Real Estate a profitable business.
- No Tax on Property Purchases
No VAT charges on investing in South Africa Real Estate. Nonetheless, the seller is responsible for sorting out the agents and pay their fees. Also, there is no requirement for stamp duty on property purchases in the country which is a plus for buyers who enjoy the added benefit.
- Enjoy Tax breaks
Investors in South Africa real estate properties enjoy tax breaks up to 20% and another 20% tax break on rental especially when you renovate your property. With this, one could say the South African real estate market is raising shoulders with western countries that are top in the business.
Cons of Investing in South Africa Real Estate 2020
- Unexpected Expenses
There are some hidden charges that you may not be aware of. As such, it is advisable that you have the emergency buffer for each of your investment property you. It is wise that you include 10% (at least) of your monthly rental income to this emergency fund.
- Prepare the worst case scenario
Things don’t go as planned all the time. Therefore you should plan and prepare against the inevitable happening and that you would not be caught unawares. You may end up leasing out the property 10% lesser than expected or buy the property at a higher price than expected.
- Cost of Management and Maintenance
There is a significant cost to maintaining a property, and this demands both time and money. This is rather peculiar to real estate and needs; therefore; it is important to put this into consideration beforehand.
One cannot tell when the unexpected happens especially when a patient files a complaint against a homeowner. You should prepare for this by having third-party insurance in case of a third party (tenant). This is very important especially in our modern world whereby there is an increase in lawsuit daily.
Conclusion on Top 10 Best Guides for Investing in South Africa Real Estate 2020
Investing in South Africa Real Estate comes with a lot of benefits even though there is some setback which of course is inevitable in business. With the outlined essential guides you should be able to make accurate and appropriate decisions towards acquiring and obtaining an excellent property in the best location that will also yield a profit to you. It is best to thoroughly assess the real estate market and ask experts who are vast in the field.
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