• Inside Labour

    The 'casualisation' of the workforce is often a ploy to cut costs, says Terry Bell.

  • When drones go dancing

    Drone technology's future is about to come to life in Cape Town, says Arthur Goldstuck.

  • Testing times for Matona

    New Eskom CEO Tshediso Matona has his work out cut out for him, says Mzwandile Jacks.

Data provided by iNet BFA
Loading...
See More

Property investment pros and cons

Jul 17 2012 14:46

Related Articles

Rental property - do your (home)work

Holiday homes: fun, but a flawed idea

Buying a house now: a good investment?

Uptick in bond applications

Handful of home loans approved in Africa

SA housing market 'relatively healthy'

 
Cape Town - Does it make sense to buy a second property, and is this a good option to grow your money?

Danelle van Heerde, head: advice processes and tools at Sanlam, weighs up the pros and cons for Fin24 users mulling property investments:

To determine the best investment option for you, you would need to consider your full financial situation.

This would include the retirement provisions you are making, any other investments you have and your access to funds in an emergency. 

Diversifying your investments into different asset types is important, as it can limit the impact of negative market movements.

However, there are some general considerations that you should take into account when evaluating property investments.

• A good property investment generally will provide a decent return in excess of inflation. Consider the location, attractiveness to prospective tenants and the level of rent you can earn.

• You can deduct the interest you pay on the bond from the rent you earn for tax purposes.

• Having an access bond provides you with an excellent vehicle for saving (but note that paying additional capital will impact the tax benefits if you are renting out the property).

• Property values are currently still low, and it is therefore still a buyer's market.

But:

• You may not be able to sell the property easily to access your capital.

• Your income stream will be impacted if you do not have tenants or your tenants do not pay their rent, which may affect your ability to make bond repayments.

• Your income stream will be reduced by property taxes, maintenance expenses, etc. You need to take this into account when evaluating a potential property investment.

To determine whether buying another property is an appropriate investment in your specific circumstances, it would be best to get a registered financial adviser to do a full analysis of your financial situation.

 - Fin24
property  |  investing
NEXT ON FIN24X

 
 
 

Read Fin24’s Comments Policy

24.com publishes all comments posted on articles provided that they adhere to our Comments Policy. Should you wish to report a comment for editorial review, please do so by clicking the 'Report Comment' button to the right of each comment.

Comment on this story
2 comments
Add your comment
Comment 0 characters remaining
 

Company Snapshot

We're talking about:

Small Business

Expanding your business requires capital and banks have stringent lending criteria in place.
 

Money Clinic

Money Clinic
Do you have a question about your finances? We'll get an expert opinion.
Click here...
Loading...