Buying investment property in South Africa right now may seem like a risky move, considering the economic climate. The country is facing high unemployment, low growth, political instability, and social unrest.

However, some experts argue that there are still opportunities for savvy investors who are willing to do their homework and look beyond the headlines. They point out that the property market is diverse and resilient, and that there are pockets of value and potential in different regions and sectors. For example, some coastal areas have seen strong demand from local and foreign buyers, especially for luxury properties.

Furthermore, the weak rand makes South African properties more affordable for international investors, who can benefit from currency appreciation and diversification. Therefore, buying investment property in South Africa right now may not be as unwise as it seems, as long as one does thorough research, has a clear strategy and a long-term horizon.

Investing in rental properties can be a sound investment, but it’s not for everyone. There are several factors to consider:

• Upfront costs: These include bond costs, attorney fees, bank initiation fees, and transfer duty.
• Ongoing costs: Examples include sectional-title levies (if applicable), rates and taxes, insurance, and maintenance.
• Ownership legalities: How do you intend to register the property? Will it be registered in your own name, a family trust, or a property holding company?
• Unlet periods: Do you have a plan/funds to cover the costs of your rental property if it’s standing empty?
• Rent: The rent you charge will depend on several factors. These include property type, location, and proximity to transport and amenities as well as supply and demand.

In the current buyer’s market, property supply exceeds demand. That means sellers are often willing to negotiate on their asking price to secure a sale (often by as much as 10 to 15%). Other factors that support buy-to-let property investments include a more competitive mortgage lending market, and the potential downward turn of the South African Reserve Bank’s current interest rate cycle. These factors could improve affordability.

However, investors should be extra conservative when it comes to buying considering the changing real estate market. If you have your financial house in order, especially as interest rates climb, rental properties can be a good long-term investment.

Buying a home is one of life’s most important decisions. MultiNET Home Loans can make your homeownership dreams a reality, faster and more affordably. Start your journey with us con. Contact 0861 54 54 44 or visit www.multinet.co.za and let’s begin your homeownership journey today.