If there's one area in Cape Town where I thought rental yields might be decent it would be Observatory. But this messed up housing market surprises even me. Here's a 3 bedroomed semi-detached house going for R870 000 with a "potential rental" of R3100.
| Down Payment | Monthly Payment | Cash flow | Annual Income | ROI |
|---|---|---|---|---|
| R0 | R10818.63 | R-7718.63 | R-92623.57 | |
| R87000 | R9736.77 | R-6636.77 | R-79641.22 | -91.54% |
| R174000 | R8654.90 | R-5554.90 | R-66658.86 | -38.31% |
| R261000 | R7573.04 | R-4473.04 | R-53676.50 | -20.57% |
| R348000 | R6491.18 | R-3391.18 | R-40694.14 | -11.69% |
| R435000 | R5409.32 | R-2309.32 | R-27711.79 | -6.37% |
| R522000 | R4327.45 | R-1227.45 | R-14729.43 | -2.82% |
| R609000 | R3245.59 | R-145.59 | R-1747.07 | -0.29% |
| R696000 | R2163.73 | R936.27 | R11235.29 | 1.61% |
| R783000 | R1081.86 | R2018.14 | R24217.64 | 3.09% |
| R870000 | R0.00 | R3100.00 | R37200.00 | 4.28% |
4.3% ROI before rates, maintenance and vacancy if you buy for cash. A +70% down payment needed just to break even on rental.
2 comments:
Hey CT Bubble, thought you'd like this tidbit, maybe worth a full posting. As you know I've been following Remax's online inventory for some months, and just crunched the latest numbers.
We're entering summer, the peak sales period, and true enough the volume of new properties going onto the site is slowing - "just" an 8% increase from October to November, after a 9.5% increase the previous month. In other words, they seem to be selling off the glut slightly quicker than before. (Still more properties being put on the market than selling, though.)
But the bigger picture is seriously whacky: since August the number of properties on the site has increased by 31%. Listings for properties in the Strand and Somerset West have increased by 68%. Yes sir, that's where I'm betting the first blood is going to start being shed.
The southern suburbs are pretty stable - old money, staying put - but the Atlantic Seaboard is also bulging out a tad; a 40% increase in listings overall. Specuvestors ejecting? Serious money knowing something about Green Point and the World Cup that the rest of us don't know? Watch this space.
As they say on the US property crash blog, 'Got popcorn?'
BC
I agree with you about Strand and Somerset West. The rentals in areas like Gordon's Bay are terrible. R2000 for a brand new 2 bedroomed apartment. Ouch!
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