# Would you still invest in real estate as an investment and if so, what and where?



## vegasboy (Apr 28, 2010)

In places like Las Vegas, you can now buy a condo on the strip with 5 star amenities, concierge etc. for $70k which sold in 2006 for $310k.

However, you will not receive much Capital Growth for a few years to come.

Back to South Africa: Would you rather invest in a similar deal in the US as above, or would you still prefer investing in real estate in South Africa? If so, what type of real estate and in which province do you think would be the best, considering all factors?


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## Johanna (Apr 13, 2009)

vegasboy said:


> In places like Las Vegas, you can now buy a condo on the strip with 5 star amenities, concierge etc. for $70k which sold in 2006 for $310k.
> 
> However, you will not receive much Capital Growth for a few years to come.
> 
> Back to South Africa: Would you rather invest in a similar deal in the US as above, or would you still prefer investing in real estate in South Africa? If so, what type of real estate and in which province do you think would be the best, considering all factors?


Yip, always good for long term investment.
Western Cape, from the Garden Route up to where ever it the borders are!


I suppose the game reserves are also a good place to invest in...the private game reserves..


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## Daxk (Jan 20, 2008)

Hi Vegas, as we spoke before, I'm getting out of my Domestic Rentals, I think there's going to be a bit of a Interest rates bubble burst and I'm already sitting at about 15% under market value on the rentals to keep good tenants.
I've geared into small Medical centres where you have a Dr,Dentist and Physio type operation all under one roof , preferably close to a taxi stop.
I've found that two houses next to each other each on a minimum of a 1/4 acre gives me enough rooms, enough toilets to sort out te extra plumbing and enough parking.
we shoved an enclosed walkway between the two and tied them notarily and got planning permission easily for the infringement.

I've got a waiting list for tenants.


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## Zimtony (Jun 28, 2008)

Daxk said:


> Hi Vegas, as we spoke before, I'm getting out of my Domestic Rentals, I think there's going to be a bit of a Interest rates bubble burst and I'm already sitting at about 15% under market value on the rentals to keep good tenants.
> I've geared into small Medical centres where you have a Dr,Dentist and Physio type operation all under one roof , preferably close to a taxi stop.
> I've found that two houses next to each other each on a minimum of a 1/4 acre gives me enough rooms, enough toilets to sort out te extra plumbing and enough parking.
> we shoved an enclosed walkway between the two and tied them notarily and got planning permission easily for the infringement.
> ...


Is this in Ireland or back in SA?


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## Daxk (Jan 20, 2008)

South Africa.
I'm gambling on the Rand not going Zimbabwean for awhile yet so even with the lack of mortgage bonds being granted i'm still getting 16% growth pa compared to zero in Ireland at the moment.
But Domestic Rentals in SA are falling over fast, most middle income families are spending more than 77% of their monthly on servicing debt.
and evictions take too long and are too expensive.


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## Zimtony (Jun 28, 2008)

Daxk said:


> South Africa.
> I'm gambling on the Rand not going Zimbabwean for awhile yet so even with the lack of mortgage bonds being granted i'm still getting 16% growth pa compared to zero in Ireland at the moment.
> But Domestic Rentals in SA are falling over fast, most middle income families are spending more than 77% of their monthly on servicing debt.
> and evictions take too long and are too expensive.


Sounds very interesting - something to consider in any case! Like Ireland, the market here in Spain is also completely shot to pieces and to get stable rental clients, I have had to substantially lower rental prices, however service charges on the communities are going up. Returns are almost zero now, so an exit plan and somewhere new sounds like a good idea.

Cheers
T


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## Daxk (Jan 20, 2008)

Yeah, I also looked at straight fixed deposits, in Ireland the best I can get is 6.25% iover 36 months whereas SA will give me 8.41%
But!!!!I cant see the ZAR remaining strong, there is an unkown quantity election in 2012 but gearing at 3:1 on small Commercial property where the tenants are not allowed to go bankrupt by their licencing board has value.


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## vegasboy (Apr 28, 2010)

Daxk said:


> Hi Vegas, as we spoke before, I'm getting out of my Domestic Rentals, I think there's going to be a bit of a Interest rates bubble burst and I'm already sitting at about 15% under market value on the rentals to keep good tenants.
> I've geared into small Medical centres where you have a Dr,Dentist and Physio type operation all under one roof , preferably close to a taxi stop.
> I've found that two houses next to each other each on a minimum of a 1/4 acre gives me enough rooms, enough toilets to sort out te extra plumbing and enough parking.
> we shoved an enclosed walkway between the two and tied them notarily and got planning permission easily for the infringement.
> ...


 That's an awesome idea. I'm also in the process of revamping a corner residential property hoping I will eventually get it rezoned. It is the only corner plot in the main street running through the town that has not yet been rezoned due to racial politics.

The broader community is historically white, but the corner house I bought forms part of a small traditional non white community. I wasn't well received in the community.

As we are speaking, I am converting the property into offices and it looks great. This corner property across from me has a Caltex, a taxi rank on the other, and commercial shops on the other corner with a large private hospital accross the road. 

I think it is time to get rid of residential property under R1 million. and invest in properties with a twist. My apologies for this long post, but I am PASSIONATE about investment properties...


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## Halo (May 8, 2008)

Investing in SA is all about RISK and short term gain as in the long term (i.e. your lifetime) you will lose.


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## Zimtony (Jun 28, 2008)

Halo said:


> Investing in SA is all about RISK and short term gain as in the long term (i.e. your lifetime) you will lose.


You are absolutely right and I wouldn't want to put all my eggs in the SA basket!! However, if the returns are there for the foreseable future, it may be worth a go!


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## Halo (May 8, 2008)

Zimtony said:


> You are absolutely right and I wouldn't want to put all my eggs in the SA basket!! However, if the returns are there for the foreseable future, it may be worth a go!



Its all about risk... I on the other hand would rather buy in England... Good prices at good rates. England will still be good for another 30 years.


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## vegasboy (Apr 28, 2010)

You are right Halo. I'm milking this cow (the legal way) till there aren't none left, and will start a new life in the US. Good timing is key here to me... And in the process I am paying taxes of up to almost 40% , plus recent Capital Gains Tax and Secondary Tax on Companies, not even talking about Value Added Tax, Municipal Taxes and who know what, BEFORE I get my slice of the pie.


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## Zimtony (Jun 28, 2008)

Halo said:


> Its all about risk... I on the other hand would rather buy in England... Good prices at good rates. England will still be good for another 30 years.


England is generally ok for capital growth, ion the right areas, but annual returns are not fantastic. I own some property in Cheshire which is not too bad, around 6% retrun, but the capital holds quite well and even in the crisis seems to be not to bad. 

But generally, properties are quite pricey, as you need to be in the "right" area, that's another reason why SA seems a decent short term option - prices are still relatively low, so lower risk in terms of exposure.


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## Halo (May 8, 2008)

I have family there and prices are good for the picking at the mo BUT I don't think it will climb again..... Unless you are in VERY exclusive/specific areas. Best to get something in Zone 1-6 in the UK.


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## jebadad (Feb 14, 2010)

When it comes to investing in South African property I would turn to property trusts. They yield between 7 - 9 %, have increased their dividends each year since I watch them (i. e. since 2005) and also grew their share prices very nicely. To me it doesn´t seem worth the effort and risk of buying a single property given that alternative unless you are able to assess the market really well.


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## Daxk (Jan 20, 2008)

jebadad said:


> When it comes to investing in South African property I would turn to property trusts. They yield between 7 - 9 %, have increased their dividends each year since I watch them (i. e. since 2005) and also grew their share prices very nicely. To me it doesn´t seem worth the effort and risk of buying a single property given that alternative unless you are able to assess the market really well.


A lot of us got burnt with property investments in property trusts and group investments.
The fees are based on movement.and the aggressive ones such as Alan Grey and a few of the better performing ones show lots of movement with no guarantees.
I found over a 10 year period taht I netted about 50% actual growth which translated to 5% pa


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## jebadad (Feb 14, 2010)

Daxk said:


> A lot of us got burnt with property investments in property trusts and group investments.
> The fees are based on movement.and the aggressive ones such as Alan Grey and a few of the better performing ones show lots of movement with no guarantees.
> I found over a 10 year period taht I netted about 50% actual growth which translated to 5% pa


Seems we are not talking about the same thing. I suggested direct investments in shares like e. g. Hiprop, Growthpoint, Redefine, Pangbourne etc. I don´t understand what fees and what movement you are talking about. These are no managed funds. It´s plain shares (or units). And the performance since 2005 is more than 100%, not including double-digit dividends (if you take the share price of 2005 as a basis).


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## Daxk (Jan 20, 2008)

I was talking about managed funds. just looked up Hyprop and resilient and Redefine, thanks, will look into it.


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## EthenGroom (Feb 1, 2011)

Privately owned off-campus student accommodation is in high demand. This is according to Adrian Goslett, CEO of RE/MAX of Southern Africa, who says that statistics have shown a consistently healthy return on investment over the years.

Units with good security within walking distance of the campus and other amenities such as shops and entertainment are especially popular among South African students and parents alike. “Parents will always go to some lengths to ensure their children get the best possible education. Hence, student accommodation will always be in growing demand, which in turn will keep rentals steady with full occupancy for at least 11 months of the year,” notes Goslett. 

Property owners will appreciate the fact that tertiary institutions often assist landlords to find tenants through free property listings handed out to students who cannot be accommodated on-campus. “Some universities have 40-page waiting lists. As such, vacancies are rarely a problem, especially because students tend to rent the same unit for a number of years,” he says.


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## gabriele (May 17, 2010)

*Investing in ZA real estate and heathcare*



Zimtony said:


> You are absolutely right and I wouldn't want to put all my eggs in the SA basket!! However, if the returns are there for the foreseable future, it may be worth a go!


Right. It may be worth the risk. However, I would also be worried about high costs of healthcare, as I am over 60 years old. There is a pretty good, semi private and governmental healthcare system in the Cape but, they select whom they allow. The inflation and rising living costs are also somehow scary which might get more out of hand after the next major elections.


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