Mutual heights is a development in the Cape Town CBD that is packed full of overpriced lofts with terrible rental yields. For instance here's a loft apartment for sale for R825 000 and which rents for R3 500pm. If you had to get a 100% bond your payments would be R10 559/month, R7 000 more than the rental you could expect to achieve. Here's the rest of the return on investment and payments you can expect:| Down Payment | Monthly Payment | Cash flow | Annual Income | ROI |
|---|---|---|---|---|
| R0 | R10559.98 | R-8059.98 | R-96719.78 | |
| R82500 | R9503.98 | R-7003.98 | R-84047.80 | -101.88% |
| R165000 | R8447.99 | R-5947.99 | R-71375.82 | -43.26% |
| R247500 | R7391.99 | R-4891.99 | R-58703.85 | -23.72% |
| R330000 | R6335.99 | R-3835.99 | R-46031.87 | -13.95% |
| R412500 | R5279.99 | R-2779.99 | R-33359.89 | -8.09% |
| R495000 | R4223.99 | R-1723.99 | R-20687.91 | -4.18% |
| R577500 | R3167.99 | R-667.99 | R-8015.93 | -1.39% |
| R660000 | R2112.00 | R388.00 | R4656.04 | 0.71% |
| R742500 | R1056.00 | R1444.00 | R17328.02 | 2.33% |
| R825000 | R0.00 | R2500.00 | R30000.00 | 3.64% |
Yow! 3.64%!? That's even worse then De Waterkant! And this is before rates, maintenance and vacancy costs. The apartment is R59m^2 so I would guess rates/levies are at least R500 a month which would bring the max ROI down to a abysmal 2.91%.
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