This 2 bed/2 bath apartment in Blouberg is on the market for R2 650 000. That means with a 100% bond you will currently be paying R27352/month to cover the bond. Or you could rent it for R8 000/month, which means that the difference between rental and bond payment is R19352/month, nearly 2.5 times more than the rental income itself! Here is the dismal Payment and Yield graph.
Right, so paying for the place in full nets you a massive 3.62% return on investment, and to break even on cash flow you need to plonk down over R1 800 000 (a 70% downpayment). Putting down a 50% downpayment of R1 325 000 will still lose you over R60 000/year. Once you take into account rates, levies, maintenance and vacancy costs and the returns will be even lower.
