Here's a 1 bed 'starter' apartment in Plumstead ('the suburb car thieves drive through without stopping' as a stand up comedian once said) on sale for R429 000 with a net rental of R2 005 (R2 500 - R495 in levies/rates). If you took out a 100% bond the difference between the bond payments and rent is nearly double the rent. At least we're not in De Waterkant territory here. Here's the payments and ROI you can expect:| Down Payment | Monthly Payment | Cash flow | Annual Income | ROI |
|---|---|---|---|---|
| R0 | R5491.19 | R-3486.19 | R-41834.29 | |
| R42900 | R4942.07 | R-2937.07 | R-35244.86 | -82.16% |
| R85800 | R4392.95 | R-2387.95 | R-28655.43 | -33.40% |
| R128700 | R3843.83 | R-1838.83 | R-22066.00 | -17.15% |
| R171600 | R3294.71 | R-1289.71 | R-15476.57 | -9.02% |
| R214500 | R2745.60 | R-740.60 | R-8887.14 | -4.14% |
| R257400 | R2196.48 | R-191.48 | R-2297.71 | -0.89% |
| R300300 | R1647.36 | R357.64 | R4291.71 | 1.43% |
| R343200 | R1098.24 | R906.76 | R10881.14 | 3.17% |
| R386100 | R549.12 | R1455.88 | R17470.57 | 4.52% |
| R429000 | R0.00 | R2005.00 | R24060.00 | 5.61% |
70% downpayment to break even on cash flow and 5.6% maximum possible returns if you buy it for cash. Returns will be even less once selling costs (estimated by the seller to be an additional R15 000) is taken into account.
Wasn't the sub-500K market supposed to be where all the money is made these days?
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