The present financial climate in South Africa lends itself to property investment. Right now there are signs that what has been a fairly stagnant market is set to improve in the non-too-distant future.
Prices are still low in the conventional property market, and there are thousands of bank repo houses in the repo market. The price of bank repo houses can be as much as 60% below the house's true market value.
The country's banks have more repo houses on their books than they really want, and they are only too happy to sell them at what is usually a very reasonable price.
In addition to bank repo houses there are numerous property owners who would be only too willing to sell their property, often a second or holiday home, in order to avoid a foreclosure and joining the statistics of bank repo houses. Property investors are taking advantage of the situation by purchasing property while it is still so cheap.
Purchasing a property, whether as an investment or to live in, is to many, indeed most people the biggest single outlay of their entire life, so the decision on which property to purchase should never be made lightly. Your choice of property should only be finalized on the back of some sound research and a good knowledge of the property market. This is something that we can help you with, and is a subject that frequently appears in our FREE newsletter.
One thing that you should keep in mind, especially when purchasing a bank repo house, is the condition of the property. Remember that most bank repo houses have been repossessed because the owner has been unable to keep up with mortgage bond repayments. This 'shortage of funds' often results in the upkeep of the property being neglected, and this could leave a purchaser with a hefty repair bill after transfer. This need not be a bad thing, since a lower purchase price can often be negotiated when a bank repo house is in obvious need of repair work. This is something that private sellers should also note. A fresh coat of paint on the exterior of your property could make all the difference between the success and failure of a sale.
Have you thought about how long you are going to keep a property? Unless you are purchasing a property for renovation and a quick sale, you should be prepared to hold on to a property for as long as possible. There are several reasons for this. A property's value will continue to rise. If the property has been purchased as a rental property then the rent you receive can be increased annually, whereas, if you have so negotiated it, you bond repayments can remain static. By the same token the longer you own a property the more you will have to spend on maintenance over the years.
All of these factors are important, especially when investing in bank repossessed houses. They are factors that are covered in detail in our FREE newsletters and in some of our seminars. Sign up now - your personal details will never be disclosed to third parties.
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