Here's a 2 bed/2 bath apartment for sale in Royal Ascot(Milnerton) on sale for R1 195 000 with a current rental of R5 500/month fixed for the next year. With a 100% bond the monthly payments are R16 178/month leaving you with a shortfall of over R10 000/month. Here's the payment and yield graph.
Buying in cash gets a return on investment of 5.52%, less than half of inflation. A 66.01% (over R780 000) deposit is needed to be cash flow positive with 2.6% capital appreciation required to not lose any money even with a 50% dowpayment.
5 comments:
I rent in this same apartment complex (not for long anymore) and let me tell you the build quality is insane. In my apartment we have a major roof leakage and as a result all walls are wet and consistently get mold in winter. I had an inspector come the other day and he said the roof needs a major repair and the flat needs to be repainted. There are cracks on the walls everywhere. In one of the blocks the underground garage is flooded with water.
Anonymous, unfortunately this is not unexpected in property built in the last 5 years. We've spoken about build quality right back in 2006 and 2007:
Building Boom Brings Shoddy Workmanship
Mandela Rhodes Place Is Under Water
I rent a townhouse built 15 years ago and i have had builders in the house for the past 6 weeks. 5 rooms needed to be replastered. We only have the kitchen and our bedroom to live in. When we moved in at the first rain, we noticed leaks all over but the landlord refused to do any work on the house then. Anyway we are taking him to the Housing Tribunal as he would not even reduce the rent whilst we did not have the use of the full house, and in fact we did not have the use of the entertainment room since we moved in. some landlords are just greedy and do not care about their tenants.
Check your lease terms, most likely you can do the repairs yourself (or hire someone) and deduct the expenses from the rent. In this case you also don't have to look for the cheapest option ;-). Furthermore, in my lease, it states that if I had 3 or more maintenance problems in the past 12 months, then I can get out of the lease. I would also imagine if a significant portion of the property is not usable anymore, the lease would also be void since it is no longer the same property.
Overall, I think in South Africa renters are quite well protected. So I think you need to be bolder in defending your rights.
i have had workmen in the house i rent for the pst 6 weeks. this week they are going to sand the walls in 5 rooms. I just do not know if i shall be able to stay here with all the dust. Maybe i shall move out and ask the landlord to reimburse my hotel bill
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