Here's a two bed/two bath apartment in Muizenberg for sale for R1 170 000 and that rents for R3 700. You don't even need me to run the number to see that the ROI if you bought this "investment" is going to be terrible. The levy is R563 a month so in actual fact the rental income is R3137 a month.Here's the ROI table:
| Down Payment | Monthly Payment | Cash flow | Annual Income | ROI |
|---|---|---|---|---|
| R0 | R14975.97 | R-11838.97 | R-142067.69 | |
| R117000 | R13478.38 | R-10341.38 | R-124096.52 | -106.07% |
| R234000 | R11980.78 | R-8843.78 | R-106125.35 | -45.35% |
| R351000 | R10483.18 | R-7346.18 | R-88154.18 | -25.12% |
| R468000 | R8985.58 | R-5848.58 | R-70183.01 | -15.00% |
| R585000 | R7487.99 | R-4350.99 | R-52211.84 | -8.93% |
| R702000 | R5990.39 | R-2853.39 | R-34240.67 | -4.88% |
| R819000 | R4492.79 | R-1355.79 | R-16269.51 | -1.99% |
| R936000 | R2995.19 | R141.81 | R1701.66 | 0.18% |
| R1053000 | R1497.60 | R1639.40 | R19672.83 | 1.87% |
| R1170000 | R0.00 | R3137.00 | R37644.00 | 3.22% |
Thats.... pretty bad. You need a 80% downpayment to break even and if you buy in cash you can look forward to a 3.22% return on investment, which is about 5% below inflation. I'll take two!
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