Finding the Perfect Investment Property
Finding the Perfect Investment Property – Talk to the Experts at Deal Core Property Group
Predictions are that the South African economy will perform better in 2018 than it has in recent years for a number of reasons. The first is quite simply because it looks like our political landscape is set to become more certain and accountable. This is igniting more investor confidence which underpins growth. Secondly our currency is performing well which does not bode well for exporters, but helps hold inflation steady. Finally, the global economy is performing a lot better which helps South Africa’s resources and agricultural sectors which are substantial job creators. Property prices have been subdued for a number of years given the weak economic environment and now would be a good time to consider investing.
At the outset, investing in property has inherent risks that are unique to this asset class. However, the old saying “no risk brings no reward” applies, so it is your personal risk appetite that must be assessed. If you are risk averse and would like a passive property investment, the recent tumble in listed property fund prices would make them an ideal investment. The reason for the decline is the increase in bond yields due to South Africa’s junk status. This market correction will, overtime, be reversed.
If you would like an active investment, the choices are varied and careful research is advised. A single tenanted property versus a multi tenanted property should be considered carefully. The risk of a single tenanted property is higher in the event of a default or vacancy. However, the amount of effort managing a single tenant is obviously a lot less. Then one needs to consider commercial, residential or industrial property. The choice of property class or sector is critical as each has very unique risks and rewards. Consider investing in an office in Sandton versus a mini factory in Germiston. Chalk and cheese really. There is an oversupply of office space in Umhlanga Ridge, but selling prices are very high. There is a shortage of student accommodation in Stellenbosch and Pretoria because of a lack of available housing to re-zone. There is demand for warehousing close to the Port of Durban, but no available land to build on.
If you are considering investing in property in 2018, come and talk to Deal Core Property Group. We are experts in our field and will gladly provide you with advice and guidance.
Author: Samantha Anderson