ready, Aim and Fire to Capitalise On Sas Property
With the economic upheaval and uncertainty being experienced in South Africa at present, many people are concerned about the future of the rand and how best to preserve their financial stability.
Van der Merwe says historically, property has been a safe haven for astute investors over difficult economic times, and in the long term weathers downturns better and bounces back faster than many other investment types.
During times like these, the property market often sees a decrease in activity, but that doesn’t mean it’s not still a smart investment option.
This is according to Schalk van der Merwe of the RawsonProperty Group's Somerset West franchise, who says during uncertain times, it’s always a good idea to look back over similar periods in the recent past and assess which investments and assets retained their value - or grew in value - and which assets depreciated.
Van der Merwe says historically, property has been a safe haven for astute investors over difficult economic times, and in the long term weathers downturns better and bounces back faster than many other investment types.
He says choosing the right property plays a big role in this, and advises buyers to use a “ready, aim, fire” technique of ascertaining a property’s viability as an investment.
“The ‘ready’ phase is for investigating an area’s performance over previous, turbulent, economic times in order to assess its potential to weather current or future difficulties. For example, the Helderberg Basin, and Somerset West in particular, did not experience negative growth during the previous recession. Sideways growth was the worst that happened to affected properties in the area,” he says.
“However, the recovery during 2013 to 2015 saw double-figure growth statistics for all three consecutive years. That’s a good sign that Somerset West property will, for example, be a safe bet for retaining value and appreciating in the future.”
Van der Merwe says if your chosen area fits the bill, move on to the ‘aim’ phase. This involves getting in touch with a reputable agent who is actively involved in the local property market.
“Find an agent with a fair-sized portfolio who can provide you with information on everything from the latest rental yields to demand statistics for various property types,” he says.
“Also factor local building costs into your decision, as purchase prices that are lower than building costs will make raising equity on your investment a much simpler matter.”
He says once you have a good idea of the market in general, narrow your aim to specific properties.
“It’s important to take all the costs into consideration when viewing a property as a potential investment, including rates, levies, insurance, and maintenance,” says Van der Merwe.
“If you find something that meets all the necessary requirements, ‘fire’ away. You can be confident that you’ve done all the right homework for the safest possible property investment.”
Van der Merwe says in the long run, property has never disappointed.
“We are particularly optimistic here in the Helderberg Basin that our properties will achieve satisfactory yields over the next few years,” he says.
“Demand and supply will always affect property growth, and we have seen demand consistently outperform supply. There is no reason to think this will change any time soon, and we are positive that the future here is still bright.”