Is property a worthy investment?
This question is frequently asked by people looking into property investment. Despite the challenges the property sector has experienced over the past number of years, investing in property remains a compelling proposition for many investors – with good reason.
While the various corners of the South African property market behave in unique ways and react differently to market forces, on the whole the market has served most of those who have invested in it very well. Property might not be the most profitable expenditure but it is deemed as one of the safest investment options.
Here are just a few points that support this statement:
- Compared to other investments such as the stock market, property investment offers more
- The increase of interest rates and escalating inflation has prompted South Africans to rather rent than invest in Therefore, the buy-to-let market has become a favoured investment. By renting out a property, investors can pay off their bond whilst the property value steadily grows.
- The favorable exchange rate for foreign buyers and South Africa’s ranking as the continent’s second-strongest economy, which guarantees high long-term returns on investment, have led more foreigners to view the country as the ideal place to invest in real
- The South African government provides tax breaks to real estate SARS permits a minimum tax deduction of 55% of the purchase price for every five properties that investors buy.
Finally, one of the most important considerations to bear in mind when investing in property is that it involves much more than just putting your money into a brick-and-mortar structure or a fund that invests in buildings. It’s about the people involved in or linked to those buildings. People will always need places to live, work, shop, socialise and run their businesses. So, ensuring that you understand the relationships that those people have with the properties they use is the key to making good property investment decisions.