Location is critical, so study potential areas

FIRST and foremost, investors need to study potential areas and consider what has happened there before deciding where to buy, says Tony Ketcher, Seeff’s regional general manager in the Cape.

He says investors then need to ask themselves three questions:

What is the average house price in the area and can I afford to invest here?

What does the historical capital growth show?

What is the growth potential and what kind of rental is achievable?

“Another important factor to consider when investing in property is the condition of the property and the potential maintenance costs. Also keep in mind that property purchased close to the sea will probably incur higher maintenance costs than a property more inland, like in Durbanville or Brackenfell,” Ketcher says.

He says investors should bear in mind that location is critical. Buyers should first determine how much they are able to invest, and then start looking at suburbs that offer that kind of selling price.

“Eliminate the suburbs that aren’t secure and are situated with easy access and egress routes attracting criminal activity; suburbs that have not shown any growth and are not within a reasonable distance of good schooling, shopping centres and work opportunities.

“Investing in a suburb that is close to these amenities is a safer bet, because demand for property here is always high.”

In general, Ketcher says, gated villages and security estates are also safer investments because they are in high demand due to the security and lifestyle offerings.

High demand makes security estates safe investments.