What are the best properties to invest in?
In an unstable economic environment, investing in property is often the smartest thing to do with your money. But knowing which properties to invest in can be tricky at the best of times.
To learn more, listen to François Viruly, convenor of the University of Cape Town Property Development and Investment online short course, as he explains the type of properties you should be looking out for.
When looking to invest in property or take part in property development one must consider a range of factors, including:
- Neighbourhood: The type of area you buy in will determine the type of tenant you attract, and whether you can expect a high or low tenant turnover
- Property taxes: Because these vary from location to location, you must account for the amount you’ll be losing on taxes for your property development opportunity
- Schools: An area with a good school often boasts higher rental prices, as tenants are willing to pay more for the convenience
- Crime: You won’t find many tenants willing to live in a crime hot spot. If you want to be sure about the safety of the area before you begin property development, visit the police or public library
- The job market: Areas with growing job markets tend to attract more tenants who want to live closer to work. If a new corporate or office is being planned in the area you want to invest in, watch the property market carefully – prices could respond either way
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The best properties to invest in are those that offer you a stable income where tenants will remain with you, and which provide you capital growth. The return has a yield component – an income component – and a capital growth component, and both need to be in place.