SAFE AS HOUSES?

Buying property is exciting - but before you put in that offer, you need to ask yourself these 10 questions.

- Sylvia Walker

HOW CAN PROPERTY BUILD MY WEALTH?

Owning property has been a key marker of wealth for centuries — but building a lucrative property portfolio takes skill and time.

Property is a long-term investment that can help you make money in one of two ways: by selling it at a profit, or by generating an income through shortor long-term rental.

It’s not without risk. Success hinges on a number of factors, including location, economic conditions and market demand, all largely beyond your control. It also takes ongoing maintenance for the property to retain or grow in value.

To maximise long-term returns, it’s essential to make well-informed decisions before buying, and to manage the property effectively.

If you finance your investment, you can use the bank’s money to grow your portfolio, says Carol Reynolds, Pam Golding Properties area principal for Durban Coastal. ‘Your return is based on the full property value, and not just on the cash you invested as a deposit.’

ARE SOME TYPES OF PROPERTY MORE PROFITABLE?

The rental market can be highly profitable, but you need to buy in a high-demand area. Grant Smee, CEO of the Only Realty Property Group, uses the example of multi-tenanted student property near a university, which has both a good location and high tenant demand. Having tenants that pay on time and take good care of your property is also crucial.

It’s important to buy wisely, Reynolds says. For example, two properties bought for R2 million each may generate a higher combined rental return than one R4 million property.

IS PROPERTY INVESTMENT RISKY?