INVESTMENT SERIES

PART

BY MONIQUE DU TOIT

t ’ s a well-known fact that certain areas are more popular than others . When choosing an investment property , knowing where to look is key . Last month , we looked at the different types of investments in real estate . Whether you decide to invest in residential , commercial , industrial , retail , or mixed-use property , the success of your investment will ultimately depend on where it ’ s located .

We also discussed three trends in residential property that have proven themselves toe be solid investments : student housing , affordable accommodation , and holiday homes . A great student house isn ’ t worth much as an investment if it ’ s not near campus , just as an excellent beach house probably wont be too popular if the “ view ” is only visible from the tiny bathroom window . As we saw last month , there are great opportunities to be had in the niche market . But what about the rest ?

Supply and demand

Love it or hate it , the Cape Town property market has shown little sign of slowing down . While the rest of the country has seen modest property price growth , Cape Town seems to defy the odds . Simply saying that Cape Town is beautiful isn ’ t enough to completely explain the oftentimes insane returns . Rather , it seems to be a matter of supply and demand .

This principle can be applied to any region or sector . If you ’ re looking to invest in warehousing , you ’ ll need to be in an area with a strong demand . Better yet , you need to look for areas where the market isn ’ t already oversaturated . Due to the geographical realities of the Mother City , there ’ s a very finite amount of land available . The result ? Premium price-tags .

GOLDEN RULES

When choosing your location , look out for the following key points :

Centrality Properties in close proximity to major hubs will always be more popular than those located an hour ’ s commute away .

Neighbourhood Depending on the focus of your investment , the neighbourhood is essential . Are you catering to families with children ? Retirees ? Students ? Young professionals ? Depending on your answer , your property will either be close to universities and schools , hospitals and parks , or popular restaurants and shops . Regardless of your focus , keep in mind the importance of a safe neighbourhood . Enquire about neighbourhood watch programmes , security cameras , access control , or patrols by security companies . Not only will this help protect your asset , it will also attract tenants .

Look around you While internet write-ups and agent summaries are helpful , few things will be as effective and accurate as actually looking at the property and area . Take advantage of showdays - and drive around the area for a bit while you ’ re at it . Notice the gardens , condition of surrounding buildings , parks and public areas and proximity to landmarks and major routes .

Upcoming developments Every investor ’ s dream is getting into a neighbourhood before it hits the big time . Enquire about upcoming developments or plans to expand the area . Big things to look out for is upgrades to roads , office buildings , shopping malls , schools , and commercial hotspots .

Ignore the building This one applies to all types of property - within reason . The age-old cliché of “ location , location , location ” holds true once again . As long as the building is structurally sound , you can work with it - depending on the asking price , of course .

If you have any questions about your own property investment journey , send them through to editorial @ reimag . co . za or visit reimag . co . za

30 DECEMBER 2017 / JANUARY 2018 SA Real Estate Investor Magazine