WHY INVEST IN BUY-TO-LET PROPERTY?
From title deeds we can prove properties we built & sold for R 195,000 during 1995 sold 2017 for R 1.9 million. These properties earned R 1.312 to R 1.4 million rent too. What's more ABSA's stats show the Waldorf's performance was not an isolated case - the residential property market in general outperformed the JSE by more than double JSE, & pension funds by 850%.
According to ABSA: country-wide residential properties produced a capital gain of > 10.6% since 1966, and of course, you still get a rent yield on top of that. Dependent upon city, area and management, net rent varied from 4-8% pa. So, even bad property buys outstripped the JSE and insurers annuities by far. According to Forbes Magazine, annuities made 6.45%. According to JSE's Powerstocks the JSE made 9.6% pa with a 40% risk of loss. Carter & Carter 's buy to let properties topped 17.6%. That means R 100,000 invested at The Waldorf Sandton during 1995 delivered over R 3.214 million; the JSE came a poor second, delivering R 960,00, while annuities, surrendered a measly R 356,000.
Inflation adds to investors problems. R 100,000 invested 1995, requires R 343,291 to buy the same basket of goods you bought during 1995 in 2017. Using this yardstick, when profit from annuities & JSE is measured against 1995's value, annuities made a PV of only R 13,990, the JSE earned R 109,48 with 40% risk of loss: while Carter & Carter buy-to-let properties made R 803,100 from R 100,000. Furthermore, if you qualified for bonds to invest in three apartments, using the same R 100,000, your profit measured by 1995's value is R 2,409,000 or R 11,153,000 by 2017's value. This under performance of annuities and poor stock exchange returns over the past forty years is a worldwide phenomena.
That summarizes our company's reasons that - we only invest in rent-producing property. If you are interested in investing in buy-to-let property or in property syndication earning 25% pa feel free to contact Charlotte Carter at Carter & Carter.