So one two bedroomed apartment for rent for R3800 a month, the other (also two bedroomed) for sale for R1 050 000. Let's run the numbers:
| Down Payment | Monthly Cash Flow | ROI |
|---|---|---|
| 100000 | -6006 | -72 |
| 300000 | -3941 | -16 |
| 500000 | -1877 | -5 |
| 700000 | 187 | 0 |
| 900000 | 2252 | 3 |
You're only breaking even with a close to 70% down payment and netting a 3% yield with almost a 100% deposit. And to add to the losses we have not factored in rates (knock off at least R600 a month in income, more if the place has an elevator), insurance and maintenance. Something is out of whack if you ask me.
2 comments:
Thanks, mal.
One day I hope to purchase a property in the Southern Surburbs. Thatt day will have to wait until the price madness clears.
Thanks for the update on Cape Town.
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