Although there is currently a buyer's market in the South African residential property industry, consumers must be careful simply to assume their fortune lies in investment property, cautions Steven van Rooyen, Principal at Leapfrog Milnerton.
"Property can be a wonderful investment, provided you approach it with clarity, caution and an open-mind," says Van Rooyen.
He offers five tips for investors.
Set clear goals
It is important to know exactly what your needs are and what you want the property to do for you.
Are you looking for fast capital growth or are you in it for the long-term with a "slow-but-steady-wins-the-race" mentality?
Patience is the ultimate virtue when it comes to property investments, according to Van Rooyen.
"It takes time to build a robust property portfolio, or even just to get to the point where your buy-to-let property brings in significant income if it is bonded from the start," Van Rooyen explains.
That is why long-term strategic planning is crucial. In his view, the best is generally to avoid selling, even if it is to fund another buy-to-let property as the legal fees and taxes can set you back rather substantially.
Examine the costs
The goal might be for the property to make money for you, but you need to also be very aware of what the property is going to cost you to begin with.
"Start by asking your bank for pre-approval of your investment loan as this will give you a good indication of the types of properties to look for," suggests Van Rooyen.
"Also, think about things like maintenance costs, levies and taxes, as well as the difference between the monthly rental yield and the bond cost."
Go for a growth area
Buying in an area where there is sufficient demand for rental properties makes sense if you're buying to let," says Van Rooyen.
He suggests to opt for practicality over luxury.
"A rental property only needs to be neat and in working order. Forget the bells and whistles. You want to make money, not spend money," he explains.
"Use your head, not your heart. A buy-to-let property is not one that you need to have any emotional attachment to. It is simply the vehicle through which you are going to make money."
Seek professional assistance
Van Rooyen advises working with a property professional to guide you.
"Most people wouldn't cut their own hair, service their own car or do their own surgical knee replacement," he says.
* Compiled by Carin Smith