Aaah Parklands. If ever there was a better example of soul crushing suburbia I have yet to see it. Here's a 3 bed duplex for sale for R1 090 000, which currently rents out for R4 000 a month. If you took out a 100% bond the difference between the bond and the rental is nearly 2.25 times more than the rental itself.Here's the payments and return on investments you can expect to make:
| Down Payment | Monthly Payment | Cash flow | Annual Income | ROI |
|---|---|---|---|---|
| R0 | R13951.98 | R-9951.98 | R-119423.71 | |
| R109000 | R12556.78 | R-8556.78 | R-102681.34 | -94.20% |
| R218000 | R11161.58 | R-7161.58 | R-85938.97 | -39.42% |
| R327000 | R9766.38 | R-5766.38 | R-69196.60 | -21.16% |
| R436000 | R8371.19 | R-4371.19 | R-52454.22 | -12.03% |
| R545000 | R6975.99 | R-2975.99 | R-35711.85 | -6.55% |
| R654000 | R5580.79 | R-1580.79 | R-18969.48 | -2.90% |
| R763000 | R4185.59 | R-185.59 | R-2227.11 | -0.29% |
| R872000 | R2790.40 | R1209.60 | R14515.26 | 1.66% |
| R981000 | R1395.20 | R2604.80 | R31257.63 | 3.19% |
| R1090000 | R0.00 | R4000.00 | R48000.00 | 4.40% |
An 80% downpayment required just to break even on the rent and if you put down the entire asking price in cash you can expect a 4.4% ROI, which is about 3.5% below
inflation and 5.3% below leaving your money in the bank.
Thanks to reader KR for emailing me this one.
3 comments:
It's the 19th again, which means its Remax inventory day.
And this month it's a shocker: the biggest increase in unsold inventory since I started monitoring it in September - 460 new properties on the market, and we're now nudging 5,000 properties for sale, from 2,800 when I started checking. Strand and Somerset West still looking like a ghost town, but this month they're joined by Parklands.
Enjoy the chaos.
BC
Thanks for the info BC. In the future instead of posting the data in the comments email it to me at capetownbubble@gmail.com and I'll post it as an article. If you have graphs of the increase in inventory send those as well.
I just wonder why all participants are so scared to say who they are, its just CT this and BC that, what are they scared of ? Such good financial insight into something that is so generic and widely used in our societies should not be hidden.
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