Newly built 1 bedroom flat available on the 5th floor overlooking the City Bowl
BIC
Granite Tops
Pool
Secured Parking Bay
Mountain and City Bowl views
Opposite Wembley Square and the Virgin Active gym
Rental is R5000 per month or buy the flat for R1.25 million
Right so you can buy it for R1 250 000 and then rent it out for R5000 a month. What's your return?
| Down Payment | Monthly Payment | Cash flow | ROI |
|---|---|---|---|
| R125000 | R12387.22 | R-7387.22 | -70.92% |
| R250000 | R11010.86 | R-6010.86 | -28.85% |
| R375000 | R9634.50 | R-4634.50 | -14.83% |
| R500000 | R8258.15 | R-3258.15 | -7.82% |
| R625000 | R6881.79 | R-1881.79 | -3.61% |
| R750000 | R5505.43 | R-505.43 | -0.81% |
| R875000 | R4129.07 | R870.93 | 1.19% |
| R1000000 | R2752.72 | R2247.28 | 2.70% |
| R1125000 | R1376.36 | R3623.64 | 3.87% |
| R1250000 | R0.00 | R5000.00 | 4.80% |
R800 000 just to break even and if you pay the full price you're making a paltry 4.8% yearly ROI. What's that? 3% below a fixed deposit? And then of course in actual fact your return is a lot less once you factor in for rates, maintenance and vacancy. And considering that the property growth rate is 3.3% for property over R900 000 if you don't put at least R500 000 down even property appreciation is not going to save you.
2 comments:
Its ridiculous!! I know the American market is slowing but for $200,000 you can get yourself a gorgeous 1 bed fully kitted out apartment inside the Chicago Loop e.g. right in the city center a few blocks from the Sears tower!! You could then rent it out for about $1,500 - $2,000.
Ummmm, I know where I'd rather buy! Yes Cape Town is beautiful and its a great city and this apartment is in the right location but c'mon Chicago vs Cape Town, I'd take Chicago anyday, at least you know what it will be like in 5 years time!
I don't agree with a property growth rate of 3.3% - I mean come on, property has increased by at least 15% each year in the Cape Town CBD over the last 5 years. You also have to look at Canterbury square and know that the surrounding neighbourhood is going through a huge renewal.
And even if the figures quoted were right, banks will only lend you money with a property standing as surety at any rate.
I don't agree with this argument at all...that's my two cents, would be interested to hear what anybody else has to day on the matter
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