6 tips to buying a second property

Property investment offers good long-term potential by providing high returns - provided you get it right. These tips will help you make the best decision when it comes to buying a second property.

  1. Research property markets

    Don’t go for the most expensive investment property. It’s often better to go for a lower priced property, in an up-and-coming area.

  2. Bargain hunting

    Look for online lists of repossessed properties that are up for auction - you may find a bargain. Just remember, unless you’re a skilled renovator, you’ll need to choose a property which is in good condition and requires low maintenance.

  3. Consider the costs

    There will be once-off costs such as transfer duties, bond registration costs and loan initiation fees. And if you’ve decided to use your property as a rental income, then you’ll need to consider the rental agents’ commission and a savings pocket for maintenance and repairs.

  4. Furnishing your new place

    It’s often not top of mind, but once you’ve covered the initial costs, you’ll still need to bear the cost of furnishing your new home. This can go into thousands of rands.

  5. You sell, you pay tax

    When you decide to sell, you will be liable for Capital Gains Tax (GCT). This is a tax payable on the profit made from the sale of your property.

  6. Get legal advice

    We suggest you consult an attorney before making any decisions.