Here's a 25m^2 bachelor on sale for R449 000 with a net rental of R1 932 a month. If you bought it with a 100% bond the difference between the bond and the rent is just under 2 times the rent itself. Here's the ROI and payments you can expect.| Down Payment | Monthly Payment | Cash Flow | Annual Income | ROI | Cap. Appr. Required |
|---|---|---|---|---|---|
| R0 | R5747.19 | R-3815.19 | R-45782.28 | 10.20% | |
| R44900 | R5172.47 | R-3240.47 | R-38885.65 | -86.61% | 8.66% |
| R89800 | R4597.75 | R-2665.75 | R-31989.02 | -35.62% | 7.12% |
| R134700 | R4023.03 | R-2091.03 | R-25092.40 | -18.63% | 5.59% |
| R179600 | R3448.31 | R-1516.31 | R-18195.77 | -10.13% | 4.05% |
| R224500 | R2873.59 | R-941.59 | R-11299.14 | -5.03% | 2.52% |
| R269400 | R2298.88 | R-366.88 | R-4402.51 | -1.63% | 0.98% |
| R314300 | R1724.16 | R207.84 | R2494.12 | 0.79% | -0.56% |
| R359200 | R1149.44 | R782.56 | R9390.74 | 2.61% | -2.09% |
| R404100 | R574.72 | R1357.28 | R16287.37 | 4.03% | -3.63% |
| R449000 | R0.00 | R1932.00 | R23184.00 | 5.16% | -5.16% |
A not very impressive 5.16% ROI if you buy it all in cash. The eagle eyed of you out there will have noticed a new column on the right hand side "Cap. Appr. Required". This stands for 'Captial Appreciation Required For Break Even' and is the capital appreciation required to make up the difference between the bond and rent payments. For instance on the first row this value is 10.2%, which means that the property has to grow in value by 10.2% (just over R45 000) for the buyer to not have lost any money at all.
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