This isn't a proper rent vs buy because I would never advocate someone to rent a 3 bedroomed townhouse for R28 500 a month. That being said it's a helluva lot better than paying R79 000 a month to cover the bond on the R6 000 000 asking price. If you were stupid enough to buy this place with a 100% bond then you'd be losing R50 000 every month trying to cover the shortfall! Here's the payment and yield graph:
So if you paid the whopping R6 000 000 asking price you'd end up with a 5.7% return on investment, probably 5% less than the rate of inflation in South Africa. Just to break even on cash flow you need a massive deposit of R3.8 million! I repeat: to make no money at all you need to put down nearly four million Rand. If you had say put that R3.8 million in a money market account paying 10% you'd at least be making R380 000 a year. Even with a 50% deposit you still require 2.2% capital appreciation to not lose any money at all.
And of course there's the fact that we have not taken into account rates (about to go up), levies (which will be considerable for a security estate in Hout Bay) maintenance and vacancy.
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Who would want to buy at the moment? Prices have further to fall. It is better to rent and put your money in a high interest account! And with Zuma who will become president and be therefore be immune from being prosecuted, the economic situation will deteriorate further and that is not even talking about crimes in this country! Foreign investors will be sparse.
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