Buying investment property can be highly rewarding, but it’s essential to approach property investment strategically. Whether you are a beginner property investor or an experienced IGrow investor looking to expand your property portfolio, you need to know what to look out for before sealing the deal. Successful property investors know that by carrying out the necessary preparation work, they will reap the financial rewards they are after!
At IGrow Wealth Investments, our Property investment strategists work closely with you to structure your property portfolio for resilience, diversification, and success.
The IGrow team has been built on the foundations laid by CEO, Jacques Fouché. He advocates for the use of leveraging tools and encourages investors to use OPM (Other People’s Money) and OPK (Other People’s Knowledge) to make well-informed investment decisions.
Here are six critical factors every property investor should consider before buying an investment property.
1. You need to be financially ready, and you should leverage OPM (Other People’s Money)
Jacques regularly discusses becoming a property investor, not through personal capital, but through OPM. The strategic leveraging of OPM is done mainly through 100% bank loans.
This means you won’t risk your life savings on a property deal, and your asset is paid for by your tenants, with minimal capital input from you in the early years. To begin the process, your IGrow Wealth Investments’ strategist and IGrow Home Loans, will check your credit score, outstanding debts, and bond repayment affordability.
If you have been black-listed or are under debt review, or cannot yet afford a loan, then you will need to work on this before you can invest in property. Don’t give up! Stay signed up to our social media, newsletters and other channels to keep getting educated, and when the time is right, IGrow will be here for you!
2. Check property market conditions and investment timing
Getting to grips with the property landscape in South Africa is key to your investment success! Top property investors in South Africa closely monitor interest rate fluctuations, inflation rates, housing supply, and rental demand to make informed property investments.
The IGrow team will be by your side throughout the property acquisition and purchase process. We will help you make timely investments based on market research and property market expertise. Remember, though, that it is better to take action and spend enough time in the market than to try to wait for the perfect moment to invest.
3. Location and Future Growth
“Location, location, location” is a golden rule in property investment in South Africa, as it is everywhere. Top property investors look beyond the location of a property. They look into any planned infrastructure upgrades in the area, and if the property is near good schools, shops, and healthcare. They also consider accessibility to business hubs and key transport routes for tenants who are working professionals.
Some successful property investors like to buy property near excellent tertiary institutions and top universities to attract student tenants.
Finally, they explore the opportunity for long-term appreciation when considering property location and type. IGrow’s property investment strategists help investors identify high-growth potential, A-grade investment properties in key growth nodes in South Africa.
4. Will your investment property have good cash flow and excellent Return on Investment (ROI)?
Becoming a property investor entails understanding the financial figures involved in your property investment.
In Bricks for Chicks: Property Investment for Women Who Kick Ass!, written by a South African investor Tanya Haffern, she calls this “running the numbers.” You do the necessary calculations to see if your property will be within your budget. View the book review for a more in-depth look at running the numbers.
Always conduct a detailed analysis of the ROI of a potential property investment purchase. You need to account for rental income, bond repayment fees, property rates and taxes, and maintenance if you decide to manage the property yourself. If you invest with IGrow, all of these figures are available for you in the comprehensive Financial Analysis in the documents section of each property’s landing page, and your strategist will help you go over these calculations.
5. Understand legal and tax matters related to property investment
If you make a mistake on the legal or tax front, your investment success could be lost! Carefully look into Lease Agreements for tenants, tax implications, and general rules and regulations tied to the property. Leveraging OPK is essential here. IGrow Rentals handles lease agreements, IGrow Trusts, and our occasional partners, LK Attorneys, assist with legal requirements, and IGrow’s Accounting and Tax Advisory are experts at handling the tax returns of property investors, as individuals, or as registered companies or trusts.
6. Support Team and Ongoing Management
Successful property investors create a strong support network around themselves.
According to Jacques Fouché, IGrow’s Founder and CEO, leveraging Other People’s Knowledge (OPK) and assembling a team of property experts for guidance purposes is critical. Jacques notes this in his eBook, “10 Steps to Building Your Property Investment Empire.”
“80% of your success as an investor is psychology, while the other 20% comes down to skills and execution. Therefore, you don’t need to personally learn all the skills immediately. Rather, leverage the skills, the qualifications and the street-smart thinking of a highly qualified investment team.” –Jacques Fouché, IGrow’s Founder and CEO (Source: Jacques’s eBook)
In partnering with IGrow, this team includes IGrow’s property investment specialists, IGrow Home Loans, IGrow Accounting and Tax Advisory, and our expert retirement planning and insurance advisors at IGrow Private Wealth, who can advise on your investments.
Surrounding yourself with IGrow’s expert team allows you to draw on our hard-won knowledge and learn from various qualified specialists. It also allows you to focus on growing your portfolio and avoiding the admin (that our team take care of for you).
Final Thoughts
Every property investor should remember that property investment success doesn’t happen overnight! It is a process that takes time and dedication. With strategic planning, qualified experts’ advice, and the proper leveraging of OPM and OPK, you’re on your way to property investment success!
At IGrow, we help beginner and experienced investors throughout their investment journey. We offer guidance from initial strategy to financing, purchase, and tenant placement, and ongoing management.
Book your consultation with our property investment strategists and grow your property portfolio. Or get in touch with IGrow Home Loans to begin your home loan application today!
