Rent Vs. Buy: Tyger Valley

Here's a listing for an urgent sale of an apartment in Tyger Valley. It's for sale for R820 000 (but supposedly is valued at R900 000) and has a new tenant in for 1 year paying R3 600 a month. Here's the ROI:

Down Payment	Monthly Payment	Cash flow	Annual Income	ROI
R0	R10495.98	R-6895.98	R-82751.78
R82000	R9446.38	R-5846.38	R-70156.60	-85.56%
R164000	R8396.79	R-4796.79	R-57561.42	-35.10%
R246000	R7347.19	R-3747.19	R-44966.25	-18.28%
R328000	R6297.59	R-2697.59	R-32371.07	-9.87%
R410000	R5247.99	R-1647.99	R-19775.89	-4.82%
R492000	R4198.39	R-598.39	R-7180.71	-1.46%
R574000	R3148.79	R451.21	R5414.47	0.94%
R656000	R2099.20	R1500.80	R18009.64	2.75%
R738000	R1049.60	R2550.40	R30604.82	4.15%
R820000	R0.00	R3600.00	R43200.00	5.27%

5.27% return when paying in cash is pretty abysmal. Break even is just below a 70% down payment. And that's before rates, maintenance and vacancy.

There is another problem with this listing besides the dismal ROI. Supposedly it's an urgent sell, so then why did the seller sign a new contract with a tenant for a year? That greatly limits the potential buyers to other 'property investors' and even then they will be more reluctant to buy a flat with an agreed upon rental they had no part in negotiating, a tenant they did not vet personally and 11 months still on the lease. Big mistake in my opinion.