Take precautions when buying rentable property
Veruska De Vita to Engel and Völkers Southern Africa
Craig Hutchison, CEO of Engel & Völkers Southern Africa, says it’s vital to take precautions when investing in buy-to-let property.
“Take your time, look around and seek advice. Do your research and understand the market.”
Each consumer profile requires a specific type of proper- ty. Student property must be in walking distance to university for three to five years. It must be affordable, small and preferably fully furnished.
Corporate businesses looking to accommodate international consultants need property that’s upmarket, in a CBD close to the corporate offices, malls and restaurants. Fully furnished properties exuding luxury are preferable for weeks or months.
Singles prefer the lock-up-andgo lifestyle. An apartment in a newly-built development with a clubhouse, laundry and gym is ideal.
Vacation property usually generates high yields in specific times of year, for days or weeks. It must be well-located where people enjoy vacationing, close to public transport, entertainment, beaches and places of interest, fully furnished and refurbished regularly. Hutchison suggests doing a pro forma analysis on the property you’re looking to buy. Look at similar properties in the area, research how the rents have changed in five years and how they’re projected to change in the next 10 years.
Calculate the estimated maintenance and operational costs to better understand how much nett income the property would generate and the capital growth.