Weekend Argus (Saturday Edition)
GOOD OPTION PROPERTY INVESTMENT
RUDI Botha, chief executive of BetterBond, says if you had bought a R1 million property with a R100 000 deposit in 2001 you would have made a return of almost 1 000%. He says:
◆ Property prices in South Africa today are 90.8% higher in real terms than they were in 2001, according to the latest FNB House Price Index.
◆ Property appreciates in value – unlike cars, clothes and furniture– and are a great savings mechanism at the same time.
◆ Buyers who put spare cash into their bond account score. If you have a bond of R1m and you pay R600 more a month towards the repayment, at an interest rate of 10%, you will reduce the loan term from 20 years to 16 years, and save more than R245 000 in interest.
◆ As long as your home is increasing in value and the bond is decreasing, you are building up equity in the property, which can be used as security for other investments, emergency funding or a deposit for another property.