One of the worst rent/buy ratios in Cape Town is in the Strand/Gordon's Bay region as reader Bean Counter often reminds us. Here's another example, a 2 bedroomed flat in Strand on sale for R421 000 (and that's negotiable) with a net rental of R1 350 (R1 800 - R450 in levies). Here's the return on investment and payments you can expect:| Down Payment | Monthly Payment | Cash flow | Annual Income | ROI |
|---|---|---|---|---|
| R0 | R5388.79 | R-4038.79 | R-48465.49 | |
| R42100 | R4849.91 | R-3499.91 | R-41998.94 | -99.76% |
| R84200 | R4311.03 | R-2961.03 | R-35532.39 | -42.20% |
| R126300 | R3772.15 | R-2422.15 | R-29065.84 | -23.01% |
| R168400 | R3233.27 | R-1883.27 | R-22599.29 | -13.42% |
| R210500 | R2694.40 | R-1344.40 | R-16132.74 | -7.66% |
| R252600 | R2155.52 | R-805.52 | R-9666.19 | -3.83% |
| R294700 | R1616.64 | R-266.64 | R-3199.65 | -1.09% |
| R336800 | R1077.76 | R272.24 | R3266.90 | 0.97% |
| R378900 | R538.88 | R811.12 | R9733.45 | 2.57% |
| R421000 | R0.00 | R1350.00 | R16200.00 | 3.85% |
3.85% return if you pay in cash, which is about 6% what you could expect from a fixed deposit. You break even on cash flow with a just under 80% deposit. No wonder the price is negotiable...
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