CASH FLOW SITUATION FOR THE FIRST YEAR AFTER THE DATE OF REGISTRATION (R 729,900)
If a 30 year bond is obtained, the monthly bond repayment will be R 6229 pm and the positive cash flow R921 pm.
RETURN ON CAPITAL INVESTED AFTER TWO YEARS
* Capital growth on R729,900 at 8% over two years equals R121,455
* Total capital invested : deposit of R20,000
* Return on capital invested (R121,455 over R20,000) = 600%. The positive cash flow above has not been included in the above calculation. It could be used for any possible rental vacancy that might be experienced.
But they don't want speculators. I repeat NO SPECULATORS!
* No sharp increases in the bond rate expected which will continue to stimulate the property market
...
* We expect lower property capital growth rates over the next two years in property up to R1,5 m. Property experts expect the residential market to lift its head high again in 2008. Property is now a long term investment and does not present much opportunity to speculators over a short term.
The same experts expecting the residential market to 'lift it's head high' are the same ones who couldn't see bond rate hikes coming despite Tito Mboweni telling them months before he was going to do it. And of course every one is expecting at least another 1% increase in the bond rate, possible more.
So get in and get out in two years but please no speculators. And property experts were predicting no rate increases till Tito raised it 50 base poi
I also love the R5000 a month rental subsidy they give you in the first year. Nothing says strong investor market like incentives from the developer.
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