09 Apr 2013
There are seven simple factors that should always be checked out by anyone looking to buy a residential property, especially one in a new development or subject to sectional title rules.
This is according to Bill Rawson, Chairman of the Rawson Property Group, who says although these rules might not apply to all homes, they are always worth taking into account as they are likely to affect the resale value of the home.
1. The first factor to be considered is the home’s position in relation to public transport.
He says the petrol price is rising at an alarming rate and people will eventually be forced to use public transport – look, for example, how quickly the Table View/Milnerton My Citi bus service has caught on. Closeness to public transport will increasingly be seen as a major plus factor in any residential area, he explains.
2. The second point to be considered, Rawson says, is the home’s rental potential, especially if it is being bought as a buy-to-let investment, but also, because the owner may decide that he might - for a time - do better renting the unit than selling it.
“Certain areas like Claremont or Rondebosch in Cape Town and Sandown or Rosebank in Johannesburg have shown to be high rental demand precincts where seven or eight percent gross returns are achievable from day one.” However, this is not true of certain other areas where rents are still almost stagnating, he says.
“The potential investor, therefore, should try to hone in on a high demand area.”
3. The third factor to be considered is the area’s schools. It is, he says, a proven fact that homes close to good schools have withstood recessions and have appreciated faster than most in general.
4. The fourth factor is retail facilities. In the less affluent areas, having these within easy walking distance is a huge bonus, he says.
“It is possible that cars will come to be seen by lower income earners as expensive and unnecessary extras but also for many others, proximity to well appointed, convenient shops that can be easily accessed after a hard day’s work can be important indeed.”
5. The fifth factor, and one which is often overlooked, is the zoning of the area. Although the South African courts have become less lenient on view blockers, if an area has been zoned for multi-storey developments, at some stage the developer may capitalise on this, with the full encouragement (in Cape Town’s case) of the Cape Town City Council, who see one solution to the city’s housing shortage being the increased densification of high demand areas, especially those close to transport routes.
He adds that certain areas, although primarily residential, are zoned for industrial as well as residential use and some are in the process of rapid transformation. This, he says, can raise the value of homes which might become suitable as business premises but by the same token the change in the area’s ambience is not likely to suit certain homeowners.
6. Finally, Rawson says, the security of the precinct has to be discussed.
“Many new developments have state-of-the-art security. Nevertheless, others have proved to be not so secure. It will pay to go for a secure home in a protected complex – and our experience at the Rawson Property Group has been that such units are increasing in value faster than those which are not protected.”
7. Although it is a minor point, Rawson adds that, he would advise those buying into a successful scheme to check out the current water and electricity charging situation.
He says independent meters are always preferable to those which are charged on an average user basis or in relation to the square meterage of the unit. This latter type of scheme is open to abuse by certain people.
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