A rose among thorns
Finding your way around the notoriously prolific market of cluster developments can be daunting. JUDE POLACK looks at what is available in the under R500000 sector
WITH property prices having spent the last several years on a steady increase, the cost of either purchasing your own home or investing in property is at an absolute premium. For middle-income earners or for those who wish to make a small property investment in purchasing a second home for their college-going children or to earn rental income, the market offers limited solutions.
Simplexes, duplexes, small clusters or apartment units that cater to the under R500000 market are certainly in abundant supply, but what exactly can buyers expect for this type of money? Many of the advertised homes sport remarkably homogonous designs, facades and facilities, so what is the shrewd investor looking for that sets one development apart and makes R400000 or R500000 a viable price to pay for a 60m² dwelling?
Johan Louw from Renico Construction, an established development company responsible for projects such as Ruimsig Garden Estate and the Rock Cottage Office Park, makes the a few relevant observations. Position, as always, is key. Buying in the right area at the right price is of the essence. There are other factors like where the unit is situated in the complex. This depends on whether you are investing over a long period and leasing out or taking the hit-and-run option. With our current development we find that the first floor units are renting just as quickly as the ground floor units, however, ground floor units are definitely more popular when it comes to sales.
Louw suggests that potential investors not only to make sure that the developer is accredited with the likes of the National Home Builders Registration Council, but that it also be prepared to refer you to past clients and/or projects. By having a look at the actual workmanship of the developer you should be able to tell if you are getting good value for your money. Unfortunately many developments in this price range do look mass produced as there are currently only so many sectional title floor plans that will get you the maximum value for your money.
If this is the case, then it really comes down to doing whatever you can to ensure that your unit stands out from the rest.
Jorge Rodriguez of Concepts in Architecture points out that upgrading to personally selected, higher quality fittings and finishes wherever possible, is the best way to add value to your property. To whatever extent that a developer will allow, try to custom design your home with regards to the sanitary ware, kitchen, tiling, carpets and lighting. This is often not initially possible, but if you are serious about maximising the value of your purchase, you can always make the necessary upgrades after you have taken ownership.
So, with all this in mind, is this kind of property investment still worth your while? General consensus is that these kinds of cluster developments are at no risk of dropping in value and, in fact, will continue to grow slowly and steadily.
Louw remains confident saying, "good research and clever buying should still reward the investor with a good return on investment."
At the end of the day, it is important to remember that simplexes and cluster developments are the only appealing living option for many South Africans.
As you search for the perfect property, look for what makes a single unit most comfortable, accessible and aesthetically pleasing. Are you looking out of the bedroom window into the neighbours bathroom? Do the kitchen cupboards look as though theyve been cut from cardboard, or is the room bright, clean and stylish? These are the issues that the end consumer, whether it be yourself or a tenant, are going to be most concerned about and that are going to determine the end value of your investment.
Article from: http://www.businessday.co.za