By: Natasha Archary
For as long as people need a roof over their heads, volatile property market or not, interest in property will not wane just because our economy has hit a speed bump.
Despite a 2.2% decline in the GDP in the first quarter of 2018, property experts remain confident about forecasts for the rest of the year. South Africa has been in a lethargic property market since early 2017, but the reliable demand for a home makes property a much more resilient asset, even in tough economic times.
Commiting to a property sale is a long-term investment. Depending on the nature of the sale, taking out a bond could see you tied to your move for decades. You may weigh options for valid returns on investment by leasing out the property or selling after a few years to get a profit.
There’s also the option to “Airbnb” your property. Opening your home to tourists and holidaymakers to make an additional income from the investment. Listing on Airbnb is relatively easy and there are general rules to follow to ensure a pleasant experience for both guest and host.
It may be advisable to speak to your financial adviser about the most efficient way to declare income generated through the Airbnb route and the associated tax that comes with it.
Volatile property market
If selling is the viable option for you, take your time to select an agent to list your property. Use a reputable agent with a track record you trust. There are so many fly-by-night agents and shady agencies who promise you the world but make underhanded deals without your knowledge.
Professional agents will have a solid knowledge of the area your property is in and will have the necessary legal knowledge to safeguard your most valued asset. Arranging open house days when it works with your schedule and will not bully you into a sale.
An evaluation of your property will give you an indication of what your property could sell for. Your agent may inform you what to fix in order to take the profit share up a bit.
Jitters about whether the market will rebound or not have left many investors questioning making a move to sell or buy. With property even in a bullish market, potential returns can be good. Property investors are always counting on two things: an increase in the value of property or the potential for leasing to make a dividend in the form of a rental. And this is what makes property a good investment in a volatile market. If the property you buy is to be used as your residential home, the tangible benefit of owning and not paying off someone else’s bond is priceless.
Research the area you’re buying in or selling. It will help you to determine if there is growth potential or forecast if the area will die down in a few years. Stagnant residential areas usually attract the wrong crowds and that can affect the sale. Choose carefully, buying or selling a property should not be an over night decision and it’s always a good idea to weigh the pros and cons of a few properties in different areas.