I’ve mentioned Joe McCall and Rick Otton in the past, as they have been talking about remote property investing. However, they usually talk about Spanish, Greek and other European properties. Hence, I am taking the time to share about other markets like the South African property market.
In the recent years, there has been many exciting remote investing opportunities in South Africa, the most sought-after being in the coastal areas, where property prices have risen fastest.
There are various types of property investment options when it comes to South African real estate market. Your house is an investment in that it provides you with a completely rent-free accommodation. It may also yield higher returns in terms of increased value (capital gains), and you can easily realise it anytime when you decide to move to another country or region where property is cheaper.
Of course, if you purchase property in the country for commercial use, e.g. a holiday home, you can easily benefit from more profitable returns on your investment. There are currently four main investment property categories available to you:
• A house for your kids or relatives, which may slowly increase in value and could easily be let when it’s not in use to provide some extra income.
• A holiday home, which offers your family with a rent-free accommodation, while maintaining or increasing its value with time. You can also rent it to supplement your income.
• A business property, that could be anything form guest accommodation to private home and bread and breakfast to a office or a shop.
• A property that is purchased simply with investment purpose, and can be a capital investment, or provide regular income, or both. Today there are many promising remote investing opportunities in South Africa. In past few years, many have invested in property in South Africa, rather than savings or shares to provide an income for their retirement.
Other benefits of investment in property in South Africa:
* Property shortage-Turbulent past has left South Africa with shortage of nice housing and government plans to solve it with high priority. This sector has long-term structural growth potential with people migrating to good neighbourhoods.
*Top holiday destination in the world-South Africa is top holiday destination of the world with picturesque landscape, both naturally beautiful and diverse. With millions flocking South African shores to enjoy its endless natural beauty and excellent climate, who wouldn’t want to make it their home?
* High property rentals rate-Escalating inflation and serious of interest rate hikes has resulted in increasing number of people choosing to rent rather than purchase houses. This means, buy-to-let market is becoming widely popular investment option in the country. Renting property will help you easily ward off bond, while the value of your house steadily increases.
* No tax on property purchases-There is not VAT payable on all property purchases in South Africa. There is also no stamp duty on property purchases, which means you can enjoy added benefits.
* Property investment offers relative stability-Stock market may promise good returns but is unstable. Experts advice that you balance your investment portfolio by choosing a stable country like South Africa for property investment.
* Tax breaks on property development-You get tax breaks of up to 20 percent while another 20 percent tax break on rental is available for all renovation projects.
Remote investing opportunities in South Africa should be considered over medium to long term. i.e. a minimum of four and preferably 12-16 years. Bear in mind property anywhere isn’t “as safe as houses” and investment can be bit risky in the short to medium term. You also need to take into account property taxes, and income tax. Capital gains is charged at normal rates here, and you will also have to pay tax on profits made if your property in the country isn’t your main residence.
When you have plans to buy to let, you must ensure that your rent covers the running costs, mortgage and void periods (when your property isn’t let).