Ideal time for buy­ers to in­vest

Weekend Witness - - Scene Around -

PRE­VAIL­ING mar­ket con­di­tions, in­clud­ing the low in­ter­est rates and the range of well-priced prop­er­ties on of­fer, make it an ideal time for buy­ers to in­vest.

This is ac­cord­ing to Adrian Goslett, CEO of RE/MAX of South­ern Africa.

“There has been a marked in­crease in de­mand for prop­erty dur­ing the first quar­ter of the year and with con­sumer con­fi­dence on the in­crease, it’s an ideal time for the in­formed in­vestor to strike while the iron is hot. There is no short­age of res­i­den­tial stock and buy­ers are spoilt for choice when it comes to the va­ri­ety of deals that are avail­able. But as with any in­vest­ment, the key el­e­ment to buy­ing in a re­cov­er­ing mar­ket is to do your home­work and never in­vest in some­thing that you don’t fully un­der­stand.”

Goslett ad­vises that in or­der to en­sure that you get the most out of a prop­erty in­vest­ment, you should look at all as­pects such as lo­ca­tion, ad­di­tional costs that you could po­ten­tially in­cur if you want to ren­o­vate the prop­erty as well as what the levies and main­te­nance costs of the prop­erty will be. He says that es­sen­tially, to make the best in­vest­ment in cur­rent mar­ket con­di­tions, knowl­edge is power and buy­ers need to know and un­der­stand the true value of the prop­erty. He says that a good way to as­sess the value of a prop­erty is by com­par­ing the rate per square me­tre with sim­i­lar prop­er­ties. How­ever, he says, you need to make sure you com­pare prop­er­ties of the same stan­dard in the same area to help you pin­point the best value.

“Know­ing the av­er­age price of prop­erty in a cer­tain area with cer­tain cri­te­ria will help you to iden­tify whether the prop­erty has been over­priced. Buy­ing a prop­erty at an un­re­al­is­tic, in­flated price will eat into the in­vest­ment re­turns in the long run. If buy­ers are look­ing for value for money deals, dis­tressed prop­er­ties are great in­vest­ments as they of­ten sell for be­tween 15% and 25% be­low their mar­ket value. This sav­ing will cre­ate an ex­cel­lent op­por­tu­nity to see real re­turns in the fu­ture,” says Goslett.

There is no doubt that in­vestors look­ing for good deals will find them in the cur­rent prop­erty mar­ket.

“It is im­por­tant to re­mem­ber that prop­erty must be viewed as a long-term in­vest­ment and prop­erty buy­ers should only ex­pect to start see­ing a solid re­turn on their in­vest­ment within three to five years of pur­chas­ing the prop­erty. Prop­erty in­vest­ments are cycli­cal and will go through peaks and troughs but over the longer term prop­erty will ap­pre­ci­ate in value and there­fore it re­mains a sought-af­ter as­set class,” Goslett says.

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