Investing in property: Why it's still the best investment you can make
Category Landlords / Investors
Thinking of investing in property by buying a home? There are many reasons why putting your money into a house, flat or townhouse is one of the best investments you can make.
When you're taking your first steps in your property journey, uncertainties and questions may hold you back from getting started. Uncertainty about the benefits of investing in a home shouldn't be one of them.
Don't think buying a home is just for the rich either. "Anyone can afford to invest in property, even if their salary is small," says Mark de Lange, founder and principal of NS Property Solutions. "If you live within your means by spending responsibly, saving and carefully maintaining your credit record, you can afford to invest in property."
So now that you know it's possible, let's look at why a home is a better investment than most other opportunities to save and grow your money.
Five reasons why property is still the best investment there is
1. There will always be a demand for housing
There are few places on earth where property isn't in demand. The situation is no different in South Africa. With a growing population comes the constant need for more places for people to live.
The national bond originator Ooba indicates that the work-from-home phenomenon, which started in 2020, also continues to result in demand for property. And that's not only in major cities but in more remote areas too.
A testament to the necessity of housing in South Africa is that there continues to be a need for homes, even after this demand has been decreased by economic struggles in the country.
2. Property doesn't lose its value. In fact...
When you buy a car, your vehicle starts losing value the moment it is sold to you. As the months and kilometres roll by, you can expect to get less and less for your car when you eventually sell it.
This is not the case with property, and there are very few other physical assets that you can invest in that offer the same certainty.
House prices grew by 4.6% in South Africa, according to the Residential Property Index from Lightstone Property released at the end of April 2021. The organisation's data shows that property value is also recovering in 2021 after prices took a sharp dip in 2020.
3. You can buy a home using a loan - and still make a profit
There are very few things you can purchase on credit and sell for more than the value they had when you bought them. Think about it: you can buy vehicles, electronics or clothes on credit, but if you try to sell them, you'll never get the same money back.
But a house or flat can be sold for more than it cost when you bought it. If you purchased your home at a reasonable interest rate and hold on to it for long enough, you should be able to make a profit.
4. Buying a house is a stepping stone to greater investments
Once you've bought your first property, you can rent it out or, in time, sell it for a profit. That may provide you with a strong enough credit score and deposit to apply for a loan for an even more valuable home. And so, one property investment leads to another.
With the right information and advice, it's possible to continue to invest in property after property over your lifetime and generate additional income.
Make sure you have the right estate agent by your side when you start your property journey. Find out what NS Property Solutions offers investors.
5. You can leave a legacy for loved ones
If leaving something of real value for your loved ones to inherit is important to you, then there is no better investment that you can make in your lifetime than property.
Your investments in other commodities or portfolios can be affected over time, but a home will always be there for your family, whether to sell or turn to in times of need.
De Lange points out that investing in property, whether to generate additional income or to leave a legacy, requires well-informed decisions.
"Before you start, do your research," he says. "Don't trust just anyone for advice. Spend time researching potential properties by checking bank and municipal valuations."
Then, when you've narrowed down your search to a few homes, calculate all the costs involved, not just what your monthly instalments will be. Consider transfer costs and the price of regular maintenance.
It doesn't have to be a complex or overwhelming process. If you need a partner in your property journey, contact NS Property Solutions today.
Author: NS Property Solutions