While taking a drive through the top of upper Fernwood in Newlands I came across a newly built modern house that was on the market for a tidy sum of R 6 995 000. In later ads in the property section offers from R6 500 000 'will be considered'. Today I found it on letting agency Trafalgar available for R15 900 a month. If you had bought it you'd be paying R52 000 a month in mortage with a hefty R 1 300 000 20% downpayment. To just break even you would need to put a massive R 5 000 000 down payment.If the house was built for say R 4 000 000 you'd be earning a pitiful 4.7% return on capital. What's a fixed deposit pay these days? 8%?
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