Property keeping up with inflation: Secrets you should know

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BUSINESS NEWS - Investment strategist, Magnus Heystek’s tweet on 10 February about selling an investment property for less than half the price he’d bought it for, sparked vigorous debates on various platforms around the performance of property as an asset.

People have to live somewhere, and even Heystek has acknowledged that few of us have the discipline to rent and invest the difference between our rent and what we’d be paying on a bond.

Buying a house is a good idea, but he tells us not to expect that house to appreciate or give us the capital we need to retire comfortably.

Well, for many South Africans, buying a home is the biggest investment they’ll ever make. Just Property CEO, Paul Stevens, doesn’t agree with everything Heystek said, but agrees that not all property investments will yield the returns you want.

So, what can we do to ensure our homes retain as much value as possible?

Location, location, location

In “Property: the good,the bad and the ugly” back in 2014, Heystek wrote that “a residential property bought at the right time and in a good area could be a very good investment… as long as the area does not succumb to the effects of demographic contagion and municipal decay, both of which are a reality today.”

It's an interesting point. Everyone focuses on the importance of maintaining one’s residential property and making astute improvements. We’ve offered advice on this recently.

[See BUYER BEWARE: MISTAKES TO AVOID WHEN BUYING A HOUSE and DARREN FRANCIS: SA PROPERTY INVESTOR OF THE YEAR] But what we forget is the impact the neighbourhood itself has. And the community’s will to maintain or elevate the standard of their neighbourhood.

It’s way easier to sit back and moan about the potholes, the crime and poor services. But an active community can have a massive impact on all of these issues.

In that same 2014 newsletter, Heystek wrote: “A house in a good and growing area where there is an increase in economic activity can be a solid investment over time.”

Just Property Mossel Bay franchisee, Cobus van den Berg unpacked this more recently in WHY MOSSEL BAY IS SA’S NEW ’IT’ TOWN.

The trick is to make that clever purchase, but then to commit to ensuring that your area remains “good” and continues to grow.

Stevens chatted about it with some of the Just Property agents in various parts of the country.

Keeping up with the Joneses

I know there are negative connotations to that well-known saying, but what if “keeping up with the Joneses” and your other neighbours didn’t mean competing with them and making bad investments on luxuries for show.

What if it simply meant keeping in touch and keeping up standards? What if it meant putting down our phones to have a chat over the fence? Read more