Here's possibly the worst 'investment' I've ever seen advertised in Blouberg. A 2 bed/2 bath apartment on sale for R1 250 000,a 'winner all the way' and 'IDEAL FOR INVESTORS', but which rents for... wait for it... R3 500/month. To put that in perspective the payments on a 100% bond is R16 923/month which means it would be 4.8 times cheaper to rent the place than buy it. The difference between the bond and the rental is R13 423/month alone, and if you were diligent and saved that money you'd be sitting with over R160 000 in your bank account at the end of the year. The yield graph is as to be expected, horrendous:
So just to break even on cash flow you need a 79% downpayment, over R990 000. Paying for the place in cash get you a 3.36% return on investment. I think there are transactional accounts that earn more interest than that.
1 comment:
Yikes, this must take the cake for the worlds worst property investment.
I can see this property sstill being for sale in three to five years time.
And imagine the holding costs for this property by its current owner...ouch!!!
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