Inner city redevelopment is receiving much attention from investors. This is as a result of low interest rates and banks easing up on their stringent credit regulations.
When we look at what the major players in property development are up to in places like Newtown, Johannesburg and elsewhere, it is an indication that all is indeed well within those nodes.
Properties are purchased per unit or entire buildings in different states of disrepair. Ideally if one has enough capital to purchase an entire block of derelict flats in a place like Sunnyside Pretoria, refurbish the property and then let the units your income, based on current market trends, will grow.
It would be advisable to first establish the viability of these properties. Schubart Park in Pretoria would have been ideal had the city engineers not declared the building unsafe. If the basic structure is safe for habitation, repairing tiles and other aesthetics, add value and is a quick fix to generating income from letting.
According to Paul Jackson, CEO (TUHF) Trust Of Urban Housing Finance says in their experience there are areas which are in need of such redevelopment. These areas include Yeoville in Johannesburg, Joubert Park, Hillbrow and Brixton. These were areas that were the main attraction in the late 60’s to late 80's.
Looking at places like Yeoville and Joubert Park, public transport is available and savings on transport can amount to as much as 20% of monthly income. That is a huge saving and is convenient.
There are many of these properties which have been abandoned by the owners and have subsequently been repossessed. Prices are also way below market value. With a bit of TLC these properties are sound investments.
According to Jackson, there are things to look out for and some tips as follows:
- Choose an area to invest in
- Research the target area
- Start small and grow, don't overextend yourself
- Keep an eye on auctions such as on the MyRoof website
- Spend time in the target area, get a feel for your intended investment
Myroof can provide deals to suit your pocket along with the right investment.