Here's a newly build two bedroom apartment in the Cape Town CBD. Asking price is R1 465 000 and they've already got a tenant in for one year at R5500 a year. How nice of them. What's your return you ask? Let's find out:| Down Payment | Monthly Payment | Cash flow | ROI |
|---|---|---|---|
| R146500 | R14980.01 | R-9480.01 | -77.65% |
| R293000 | R13315.57 | R-7815.57 | -32.01% |
| R439500 | R11651.12 | R-6151.12 | -16.79% |
| R586000 | R9986.68 | R-4486.68 | -9.19% |
| R732500 | R8322.23 | R-2822.23 | -4.62% |
| R879000 | R6657.78 | R-1157.78 | -1.58% |
| R1025500 | R4993.34 | R506.66 | 0.59% |
| R1172000 | R3328.89 | R2171.11 | 2.22% |
| R1318500 | R1664.45 | R3835.55 | 3.49% |
| R1465000 | R0.00 | R5500.00 | 4.51% |
You need to put a cool million as a down payment to just cover the bond repayments and if you buy it for cash you'll make a paltry 4.5% ROI. With capital appreciation hovering at 3.3% if you bought it at this price without putting at least R700 000 down even that is not going to help.
1 comment:
Great article. This helps people alot. I love your breakdown. I think people are always under the impression that Cape Town is the most awesome place to buy and it's a great investment etc.. but they need to be careful. thanks.
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