Property investment in SA 2023: 5 Tips for generating profit

Article summary

• Property investment is the most reliable way to generate income over the long term.
• South Africa remains a buyer’s market for 2023.
• Buy-to-let is a good way to get a foothold in the property market.
• An estate agent can advise you on property trends.
• A home loan comparison service, such as ooba Home Loans, can help you secure the best deal on your bond.

Property investment is not only a profitable endeavour, but a safe one. Investing in bricks-and-mortar remains the most reliable way to generate income over the long term.

Good to know: We’re currently in a buyer’s market

Despite rising interest rates, inflation, and loadshedding; data analytics company Lightstone forecasts a buyer’s market for 2023.

This is because

• Interest rates remain relatively low, and experts predict there won’t be many more hikes.
• New developments are emerging, making more properties available, which keeps prices down.

Thinking of taking advantage of the buyer’s market and investing in property? Here are some tips for making the most of your investment.

Property investment tips for the South African market

1. Buy-to-let is the bread and butter of property investment.
2. You can renovate properties to boost their value.
3. Get inside info on the property market by hiring an estate agent.
4. Diversify your portfolio.
5. Get the best deal on your bond.

1. Buy-to-let is the bread and butter of property investment

• Buy-to-let is the go-to option for investors, allowing you to generate monthly income from properties in your portfolio.
• With careful planning, buy-to-let provides a reliable source of revenue in the long term.
• You can use rental income to pay off the bond on the property.
• You can estimate the rental income by looking at rental prices for other properties in the area.

2. Buying and renovating properties to boost value

• House flipping is a common practice, where you purchase a low-value property and fix it up in order to boost its value and sell it at a profit.
• Kitchen renovations are most effective at boosting property value, as kitchens sell properties.
• Bathroom renovations provide a relatively cheap way to enhance the property’s aesthetic appeal.
• Location is important. Buying a low-value property in a good location, or an up-and-coming suburb, is an especially effective form of investment.

3. Get inside information on the property market

• Property investors need to stay abreast of trends in the property market, which can be affected by political and economic factors
• An estate agent can advise you on property trends, such as the average value of properties in a certain area.

4. Diversify your portfolio

• Don’t allow yourself to become too fixated on certain property types or areas. Investing in a broad range of properties, spread across different areas, will make your portfolio less susceptible to market fluctuations.
• Commercial properties offer a higher return on investment than residential properties and may become more profitable in 2023 as people return to the workplace.

5. Get the best deal on your bond

• In most cases, you’ll need to obtain funding before investing in a property, which usually comes in the form of a home loan granted by the bank.
• However, each bank has different lending criteria, some of which may result in more favourable interest rates for you.
• It pays to shop around for the best deal. This is made easier if you acquire the services of a home loan comparison service such as ooba Home Loans, which can apply to multiple banks on your behalf.

We also offer a range of tools that can make the homebuying process easier. Start with our Bond Calculator, then use our Bond Indicator to determine what you can afford. Finally, when you’re ready, you can apply for a home loan.