Here's a 2 bed duplex in Parklands (aka The Suburb That Destroys Souls) on the market for R689 000 which is tenanted at R3 300 a month. With a 100% bond the difference between the bond and the rent is 1.75 times the rent itself. Here's the yield and payment graph.
5.75% return on investment if you buy it in cash, which means you're only losing 5% (and rising) of your investment due to inflation every year. To break even on cash flow requires a 63% downpayment and even with a 50% downpayment you still require 2.15% capital appreciation to not lose any money. And that's before rates, levies, maintenance and vacancy so expect even worse returns
2 comments:
I am just curious, what's up with Parklands? Why is it soul crushing? Is the traffic that bad?
The traffic is definitely a factor but for me it's a suburb devoid of character or charm. Everything looks the same and it's as bland as cold pasta.
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