Saturday Open Thread - IRT Effect?

It's the Saturday open thread. This week: 'Will the IRT (Integrated Rapid Transport) System currently being rolled out affect the property markets it services?'

Saturday Open Thread

It's the Saturday Open Thread! This weeks topic: Gentrification: Where is it happening? Good or bad?

High Rise And High Levies: R60 000/year Evaporated

Here's a nice looking 210m2 loft in Cape Town on the market for R2.2m. Now on a R/m2 basis that isn't too bad (+- R10 000/m2), although it only has 1 bedroom in that 210m2 space...

What is bad though is the massive R5 100/month combined rates and levies (Rates: R2500, Levies: R2600). That's over R60 000/year that you will never see again.

Over 3% in capital appreciation is required every year just to make back the money spent on rates and levies.

The Orangerie: If You Enjoy Losing R18 000/month

Reader DM sent us a link to a 2 bed apartment for sale at The Orangerie (how we missed you!). Here's the text of the ad:

The best of the best
What better place to live! tenanted until 31st December 2010 @ R8,000 p/m.

And the asking price? Only R2 850 000. Which means a 100% bond would require a monthly bond payment of R25 642/month.

So you can rent for R8 000/month or pay R25 642/month to own. To put that in perspective to get your bond payment down to the same level as the rent you would need to a down payment of around R2 million.

Anyway if you're buying for investment this is a terrible option (unless you enjoy losing R18 000/month), you don't need me to tell you that but here's the yield/cashflow graph anyway:

Down Payment	Monthly Payment	Cash Flow	Annual Income	ROI	Cap. Appr. Required
R0	R25642.19	R-17642.19	R-211706.28		7.43%
R285000	R23077.97	R-15077.97	R-180935.65	-63.49%	6.35%
R570000	R20513.75	R-12513.75	R-150165.02	-26.34%	5.27%
R855000	R17949.53	R-9949.53	R-119394.39	-13.96%	4.19%
R1140000	R15385.31	R-7385.31	R-88623.77	-7.77%	3.11%
R1425000	R12821.09	R-4821.09	R-57853.14	-4.06%	2.03%
R1710000	R10256.88	R-2256.88	R-27082.51	-1.58%	0.95%
R1995000	R7692.66	R307.34	R3688.12	0.18%	-0.13%
R2280000	R5128.44	R2871.56	R34458.74	1.51%	-1.21%
R2565000	R2564.22	R5435.78	R65229.37	2.54%	-2.29%
R2850000	R-0.00	R8000.00	R96000.00	3.37%	-3.37%

Saturday Open Thread

It's the Saturday Open Thread.

Saturday Open Thread

It's Saturday! Go Stormers!

High Rise And High Levies

Here's a 104m2 2 bed apartment in the CBD on the market for a hair under R2m. Now you can probably negotiate the price down but what you can't negotiate down is the rates of R893/month and levies of R3285/month.

That's an eye watering R4 178/month! Over R50 000/year! More than 2.5% of the current asking value of the property evaporated every year.

Lord help you if they ever need to put in a special levy for urgent repairs.