Here's a 3 bed/2 bath house in Glencairn Heights currently on the market for R2 100 000.But why pay R20 000/month in bond payments when the same house is rented out at R7 500 (for another year). The difference between the net rental income (before expenses) is R11 394/month, about 150% of the rental itself. You need a 60% deposit to break even on cash flow and your max ROI is 4.29%. Take off rates, taxes, maintenance and the numbers get even worse.
Here's the yield graph:
8 comments:
Am wondering what software you use to make these interesting little graphs. Am keen on seeing some stuff like that for myself on rent vs buying on selected properties. I could write a web version where people can pop in some values and it can show it in real-time. What do you think?
Nice online buy vs rent calculator:
http://www.nytimes.com/interactive/business/buy-rent-calculator.html
Looking for that free property valuation website again please.
Things are seriously out of wack with property..it would cost much more to build this property..probably in the region of 3.5-4 mil..one wonders where this will lead..the property is only overvalued based on return on rent..but undervalued compared to replacement value..it seems as if there is no demand for this type of property..as if there’s no liquidity in the property market
to continue the discussion with property in the far south..in my road I dare say about 80-90% of houses is on the market..all advertised on the net where photo's and write-ups are featured but there's no for sale sign in front of the house..only about 10% has for sale signs up..it's as if there's a silent panic under property owners..
What a fugly house! The architect, if there was one, should be shot for this.
This doesn't strike me as a buy-to-let property. Who is going to buy this property with a lease, and especially this LOW rent one, in place?
The "huur gaat voor koop" principle of occupation has always struck me as odd. I realise you can't just throw people out but there should be a notice period to override and existing lease, say 6 months maximum, in favour of new owners.
Hi JDog
http://web1.capetown.gov.za/web1/gv2009/SearchProperty.aspx
Hope it's the one you're looking for.
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