How To Invest In Africa Real Estate


Write A Business Plan

How To Invest In Real Estate In South Africa [Tax incentive]

A business plan should have objectives, source of startup capital, income projections, risks, and strengths. A business plan is a roadmap of any business to achieve its goals. With a business plan, you can get investors and also seek business financing from financial institutions.

The Current State Of The South African Real Estate Market

The South African real estate market is still thriving, and there are ways to benefit from it, which I will explore in depth in this post. According to ABSA, nominal property prices in South Africa rose 3.96 percent in the first quarter of 2019. When adjusted for inflation, prices declined by 0.51 percent. This, according to FNB analyst Siphamandla Mkhwanazi, demonstrates persistent pressure on household incomes as well as a weak macroeconomic climate.

Create A Plan To Find Deals

Excellent real estate deals will not come knocking on your door, you must devise a strategy to obtain transactions. Depending on how you go about it, this may necessitate the expenditure of dollars. There are numerous auction houses in South Africa where you might discover good offers. To begin, make a list of auctions that you wish to visit and select those that you believe you will be able to use. You should be able to find the finest discounts among these. Alternatively, you might hire estate agencies like Pam Holdings or smaller ones.

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What Is The Truth About Property Investment

Real estate is said to be the simplest investing industry to enter because your earnings are assured. This may not be the case due to the multiple aspects that must be considered. To begin, evaluate criteria like location, investment amount, property type, property attributes, real estate market circumstances, and so on. It is stated that real estate investing is a science, but there is a certain degree of practical and intellectual conduct that must occur before you can start profiting from your property investments.

Unfortunately, many South Africans assume that you can start buying homes and making money as soon as you have some money. As a real estate investor, you will undoubtedly make mistakes that will cost you money. As a beginning, you will almost surely make blunders that you will later term foolish. To be honest, Iâve seen folks hop from one seminar to the next in an attempt to learn how to make money investing in real estate quickly. To truly understand what real estate investing requires, you must study extensively.

Read about other peopleâs real estate experiences and how they got started there are several books that offer thorough real estate investing ideas.

How To Invest In Reits In South Africa

Residential Real Estate Investment Trusts in Africa

There are a number of ways to invest in Reals Estate Investment Trusts in 2021. From specific REITs funds to Listed REITs. One of the easiest and cheapest ways to invest in REITs is through Easy Equities. Easy Equities offers approximately 34 different REITs for you to choose from and invest in. This allows you as an investor to explore and diversify adequately depending on your needs.

Furthermore, Easy Equities has a low-cost profile with a cost of 64c per R100 invested! This means investing no longer has to be expensive.

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Choose The Type Of Property That Delivers Best Returns

If youre looking for an investment opportunity in the residential market, its always critical to know which types of property are best performers. In South Africa, data reveals that one bedroom and studio apartments have been the best-performing for over 12 years. Investors who choose a one-bedroom apartment receive better returns than those who invest in a two or three-bedroom flat. However, more South Africans continue to purchase two-bedroom apartments despite lower returns.

One-bedroom apartments are entry-level choices for most young professional first-time home buyers, says CEO of Landsdowner Investment Properties, Jonathan Kohler. The thinking behind this is that two people could rent the property together or two people could perhaps purchase the property. However, this has simply not been the case, and investors in this market are not reaching their maximum return. Investors looking to purchase a property must keep two of the key principles in mind rental return and capital appreciation, explains Kohler.

Whether youre a student, living away from home for the first time, a young professional renting your first apartment that youre paying for yourself, a first-time homeowner or a first-time investment property buyer with buy-to-let aspirations, the one-bed-one bath is generally a good place to start, says Kohler

Review You Financial Status

You must comprehend and accept your current financial status. Knowing your financial situation will help you determine the possibility of accomplishing your goals. Knowing your financial stage can also help you decide when is the right moment to leave your job, whether you need to work with a financial institution to accelerate your investments, and whether you need to court a partner. You can start a real estate job with little or no money but, you must first know what to do. You will be able to begin as a real estate investor if you understand your financial status else, you will be unable to begin.

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Actis Africa Real Estate Fund 3

Cameroon, Kenya, Nigeria, Morocco, Cote d’Ivoire Construction and real estate

Actis is a leading investor in growth markets across Africa, Asia and Latin America. Its three separate investment groups focus on energy and infrastructure real estate and general sectors, including consumer, education, financial services, healthcare, industrial, manufacturing, and retail.

Actis was formed in 2004 following a restructuring of CDC designed to bring more equity capital into developing countries and the two organisations have a shared history.

The London-based firm has offices across Africa, Asia and Latin America.

The Actis Africa Real Estate Fund 3 is the largest private real estate fund targeting sub-Saharan Africa raised in the market to date. Its predecessor funds are ARE1 and ARE2. The latter, which closed in 2012, raised $278 million. CDC played an anchor role in both predecessor funds.

Gateway Real Estate Africas Objectives Are To:

How To Invest In Real Estate With No Money In South Africa 2021
  • Partner with global companies on their real estate solutions across Africa
  • Achieve long-term capital appreciation by investing in real estate developments across the continent
  • Actively develop a portfolio of real estate assets with quality leases and strong counterparties
  • Build diverse revenue streams and create long-term franchise value and
  • Promote community development through participating in social infrastructure investments in education, student accommodation and health care.

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How To Invest In Real Estate In South Africa Without Buying Property

While its a truly low-risk investment alternative, real estate may seem difficult to get started in for a lot of people who feel daunted by the escalating property prices.

Fortunately, theres a way to invest in real estate without having to buy an actual house, flat, or office space, according to Fayyaz Mottiar, Fund Manager of the Absa Property Equity Fund.

The alternative to owning a physical property is to invest in the real estate market through property funds. A property fund is a mutual fund that invests in publicly-listed real estate companies, said Mottiar .

It gives an individual the opportunity to invest in a range of properties through the purchase of stock. Property funds buy you a stake in real estate companies listed on the Johannesburg Stock Exchange saving you the headache of maintaining property and dealing with dodgy tenants.

This means you become a real estate owner without having to physically buy or finance property. Depending on which fund you use it also gives you access to foreign propert markets as well serving as a hedge against the rand when needed.

You then earn your returns through rental collection, according to Fayyaz.

Sparing you all the admin that comes with owning physical property, real estate companies buy property, collect rent, and pass the majority of the money to shareholders.

Listed Property Is An Alternative

If youre looking to invest in real estate but dont want to deal with the rigours of managing tenants, listed property is the route to go. Instead of buying physical property, you can simply put some money into a property fund, which invests in publicly-listed real estate companies.

The advantage of a property fund is that it exposes you a diversity of assets, including residential, industrial, retail properties. By investing in a fund, you can have stocks in different properties types such as shopping malls, office blocks, and townhouses.

For a small investor, a buy-to-let property comes with a concentration of risk. You are spending a huge amount of money on one single asset and if the tenant goes wrong, you take a big financial knock, explains John Loos, household and property sector strategist at FNB Home Loans. Yes, the share market can be volatile, but if you bought into one listed property fund, you have already spread your risk into a number of properties, so the concentration risk isnt nearly as much as with a buy-to-let property.

South Africa boasts numerous real estate funds that have dominated the unit trust space over the last ten years. Some of the countrys top-performing property funds are the Absa Property Equity Fund , Stanlib Property Income Fund, and Prudential Enhanced SA Property Tracker Fund. Theres also Catalyst SA Property Equity Prescient Fund, Investment Solutions Property Equity Fund, and many others.

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Reasons Why Real Estate Is The Best Investment In South Africa

Real Estate Investing has proven to be one of the best businesses to invest in the world over.

The trade has bred billionaires.

You cannot go wrong with real Estate Investing in South Africa.

You might be wondering which is the best investment in South Africa.

Well, Real Estate is not only the safest investment in South Africa but overwhelmingly the best.

Hereâs the look at 10 reasons why Real Estate is the best investment in South Africa.

Africa’s Vast Natural Resources

Top 10 African Countries to Invest In REAL ESTATE

The African continent is incredibly rich in natural resources. It has huge, untapped reserves of natural gas and oil and largely unexploited hydroelectric power. It is home to vast gold, platinum, uranium, iron ore, copper, and diamond reserves. Currently, only 10% of Africas arable land is being cultivated, yet it holds around 60% of the worlds cultivable land. As such, Africa has become a magnet for foreign direct investment .

Africa also has the advantage of a large and relatively cheap educated labor force. The continent is undergoing a demographic transformation, with youth as its theme there is a very high proportion of Africans in their 20s and 30s with fewer dependents both old and young that will play out over the next decade.

There is stability in terms of governance the countries that witnessed terrible periods of unrest have emerged as success stories. There are better policies in place, trade has improved and so has the business environment.

According to the World Economic Forum, by 2030, over 40% of Africans will belong to the middle or upper classes, and there will be a higher demand for goods and services. In 2030, household consumption is expected to reach $2.5 trillion, more than double that of 2015 at $1.1 trillion.

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Africa Real Estate Contacts

Our website contains comprehensive information related to Africa investors group and information on the best investment opportunities in Africa, how to invest in Africa and where to invest in Africa. It also contains a wealth of information on African Investors and Funds, who Invests in Africa, which investors are relevant to you and how to contact them. This page is designed to help you find your information as quickly as possible.

Our focus is on matching individuals, companies and funds wanting to invest in Africa with information on how and where to invest in Africa, Africas best investment opportunities in addition to identifying companies, funds and individuals looking for investment, and comprehensive information on who is investing in Africa, Africa investors, how to get funding, the best Africa investment apps, African investment platforms, Africas top corporate service providers, business leaders and communities etc.

Initially please review the following suggestions that may be useful:

Create A Business Website

A good business should have a website where people can visit and read about your products. Get a good website design to design a real estate business website for you. A website will also help you in marketing your business. Make sure to include your contacts and business location on the website to make it easy for potential buyers to reach you.

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Why People Are Investing In North Africa

There are many reasons why increasing numbers of French residents are choosing to invest in North African real estate. Beyond the quality of life that comes with great weather, good food and beautiful landscapes, potential buyers can expect relatively low property prices, easy links to major European cities, a network of reputed French-language Lycées français and the chance to connect with close-knit but welcoming expat communities.

Economic development in the region also means that major Moroccan and Tunisian cities are becoming hubs for innovation, with the technological ecosystems of Casablanca and Tunis attracting attention from global entrepreneurs.

Before You Jump At The Opportunity To Invest In Property In South Africa Heres A Quick Guide To Help You Prepare For Your Venture

10 Best Cities For Real Estate Investment in Africa 2021

Consider Buying to Let

The buy-to-let strategy is one of the easiest ways to invest in property. Its no wonder it seems to be a favourite for many investors in the South African real estate market. While it has its risks, like any other strategy, purchasing property to rent out is a sound investment choice whose benefits far outweigh its shortcomings. One person who believes in this strategy is Jason Lee, the best-selling author of Making Money Out of Property in South Africa, and two other property books.

Buy-to-let properties make fantastic retirement products if you buy right and have patience. The tenants contribute or cover your mortgage payments so they essentially pay for or assist in paying for an asset that you own, Lee shares.

He adds, Over time, the balance on your mortgage becomes lower while the value and rental income from the property increases. This gives you options in retirement. You can either sell the property to access the capital gain or keep the property and collect cash flow in the form of monthly rent payments.

When buying property to rent out, one other key factor to consider is housing affordability, says Lee. Affordability is always an issue and that is why I like to concentrate on the middle-income bracket that low income buyers can aspire to and high-income buyers can downsize to, he explains.

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Now You Know How To Invest And Make Money In Real Estate In Africa

While Africas real estate market now sits at a very interesting time in its history, the opportunities that it holds will not last forever.

Investing in real estate is usually a long term journey the rewards and profits take time to accumulate and the impact on your finances grows over time.

Time is the only element of real estate investing that you dont have. This is why the best time to start is NOW!

Its never too early to start. Like we advised early on, start keeping away some money every month as savings to buy a piece of property.

Set a target for yourself at the beginning of every year to invest in real estate. Get hungry for real estate deals and information. Start working on your property hunting and negotiation skills. Since real estate investments need time, the best time to start is today!

In this article, we have looked at the situation of the real estate market in Africa and the many opportunities that lie within it. We have also explored the strong reasons why you should consider investing in real estate and five great tips that will help you succeed.

We believe that all the opportunities we have shared with you in this article will be taken further by your creativity and energy.

Please leave a comment, share your views and ideas or ask any questions you may have concerning real estate investing in the Comments section below.

To your success!

Take Note Of Property Types That Are Performing Well In The Market

Property investors need to stay abreast of trends in the property market, which can be affected by political and economic factors. For example, sectional title properties generally perform well in South Africa due to their popularity with students and first-time home buyers. Properties in gated communities are also expected to perform well, due to security concerns.

Trends also vary by area. The current price deflation in the Cape Town market has been especially prevalent in upmarket areas like Sea Point and Camps Bay. This makes those districts ripe for investment.

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Reasons Why You Should Invest In Real Estate

Now that we have looked at reasons behind the huge demand and boom in the African real estate market, lets now look at a couple of reasons why you should be very interested to invest in real estate.

#1 Real Estate Provides a Steady Source of Cash Flow

When you buy or build a piece of property , and rent it out to tenants, that property starts to earn you rental income .

With the high demand for accommodation and growing inflation, rent prices are always on the rise. Higher rent prices mean more income for you, the landlord.

Compared to other investment options, the income from real estate is the most steady.

Take stocks for example, the amount of dividends paid by many companies often fluctuate and may not be paid every year. Bank savings usually attract interest payments that may be steady but are often very small compared to the returns you can get from investing in real estate.

Because the income from real estate investments is steady and predictable, you can plan better.

The rent you get from your property can be used for specific projects such as paying your kids school fees, travelling abroad or buying a new car. Rental income is also great for people who are planning for retirement.

#2 Real Estate Can Be Used As Collateral for a Loan

In Africa, collateral is one of the biggest obstacles faced by entrepreneurs in obtaining a bank loan to start a new business or acquire property .

#3 Real Estate Offers One of the Highest Returns on Your Investment


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