Developments - proven to be a lucrative investment: What do you need to know?
Real estate development, or property developments, have manifested into popular business opportunities, with renovation and re-lease of existing buildings to the purchase of raw land to be developed. Real estate developers and companies who coordinate all of these activities, converting ideas on paper to real property have found it to be a very realistic choice to those wanting to scale down, starting out small or invest with a lucrative future at mind.
“Property developments have increased tremendously by number in the last year, especially in areas close to universities and expanding societies” noted Carl Venter, Licence Partner of Engel & Vӧlkers Potchefstroom. Gated communities or complexes have become the most popular choice over the past decade, and increases to do so, as it offers safety and a hassle-free lifestyle in today’s fast paced life.
From an investment point of view, it would also not disappoint. As a return on investment, it almost guarantees success if the location and price is right. Seeking professional advice is also to your benefit as most real estate agents in your area do know about developments in advance.
What exactly are the most important factors and criteria that you should consider when making a property investment?
Carl Venter gave us some advice as Engel & Völkers Potchefstroom has been known for their projects division for over a decade.
“With the launch of Lucca, a new development by Renico Construction, we investigated the key factors when making a property investment decision” said Carl. He continued to share a list of KPI’s (Key Property Investment Criteria) when looking at the development of your choice:
- Excellent location with good prospects in the specific area: Location is key, as the more popular the area, the bigger the growth.
- Security environment: The development needs to offer security to its residents, and the better the security, the more popular the complex.
- Finishes and construction of high quality: This will ensure no special levies will be raised due to poor workmanship or inconvenience of contractors in and out of the complex after occupation, which could impact on the security factor.
- The ideal price bracket: The key here for investors and owners alike, is a return on their investment. For a good investment, the ideal price bracket is currently between R600 000 and R1 million. This is confirmed by the property specialist Erwin Rode in a recent discussion with Andries van Zyl on the popular RSG program: Money-Web. (Listen to the specific discussion here.)Erwin Rode is the CEO of Rode & Associates (click here to visit their website www.rode.co.za).
- Rentals: Should you decide to buy to let, you need to take into consideration the rental market in your area. Buying property that falls within the ideal price bracket category, statistically caters for the category of the most reliable tenants in South Africa (with regards to payment). This price bracket also ensures easy placement of tenants, ensuring that you will always have enough tenants to secure occupation, and not leaving you having to cover the costs for a month. According to the national research of TPN Credit Bureau – Lucca, which is priced from R810 000, falls exactly in this category. Visit their website www.tpn.co.za for more information.
If we look specifically at the new development in Potchefstroom, Lucca, as an investment opportunity it is definitely something to consider. The complex has only 89 units and is situated in a Lifestyle Estate, making it the ideal choice- which meets all of the above requirements for a sound property investment. If you’ve recently driven through Potchefstroom and past the current under construction piece of land next to Tuscany Ridge, you would have seen that it shows great progress. The 2 bedroom, 2 bathroom townhouses will be ready for Occupation August 2016.
The developers is Renico Construction, a well-reputed developing company from Gauteng with a list of more than 150 successfully completed projects – every single one of them completed on time and have never missed a deadline. Lucca is Renico’s first development in Potchefstroom.
The 89 townhouses will definitely appeal to first time buyers (due to the price bracket as well as the lock-up-and-go appeal that the complex in an estate offers), young adults, small families looking for a private garden and the security of living in an estate, post graduate students as well as buyers looking to downscale, and the ground floor units feature private gardens.
“Because of the good ROI (Return on Investment) that Lucca offers, it is also a very sound opportunity for investors – whether they are looking for single units or looking to buy bulk” Carl concluded.