This is a bit out of Cape Town's city limits but it just goes to show that terrible rent/bond ratios are not limited only to the city. Here's a 3 bed/2 bath house in Stellenbosch for sale for R1 195 000 with a current rental of R5 000. On a 100% bond the difference between the bond and rent is only double the rental, not as bad as some of the previous examples we've seen in Cape Town proper.| Down Payment | Monthly Payment | Cash flow | Annual Income | ROI |
|---|---|---|---|---|
| R0 | R15295.97 | R-10295.97 | R-123551.68 | |
| R119500 | R13766.38 | R-8766.38 | R-105196.51 | -88.03% |
| R239000 | R12236.78 | R-7236.78 | R-86841.34 | -36.34% |
| R358500 | R10707.18 | R-5707.18 | R-68486.18 | -19.10% |
| R478000 | R9177.58 | R-4177.58 | R-50131.01 | -10.49% |
| R597500 | R7647.99 | R-2647.99 | R-31775.84 | -5.32% |
| R717000 | R6118.39 | R-1118.39 | R-13420.67 | -1.87% |
| R836500 | R4588.79 | R411.21 | R4934.50 | 0.59% |
| R956000 | R3059.19 | R1940.81 | R23289.66 | 2.44% |
| R1075500 | R1529.60 | R3470.40 | R41644.83 | 3.87% |
| R1195000 | R0.00 | R5000.00 | R60000.00 | 5.02% |
I wouldn't exactly call 5% return on investment (which is below inflation) a "Great investment opportunity". A 70% downpayment is required to break even on cashflow alone. We also haven't taken into account rates, maintenance and vacancy costs. This house is in a security estate and that usually bumps the levies up higher than normal.
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