Reader DM sent us a link to a 2 bed apartment for sale at The Orangerie (how we missed you!). Here’s the text of the ad:
The best of the best
What better place to live! tenanted until 31st December 2010 @ R8,000 p/m.And the asking price? Only R2 850 000. Which means a 100% bond would require a monthly bond payment of R25 642/month.
So you can rent for R8 000/month or pay R25 642/month to own. To put that in perspective to get your bond payment down to the same level as the rent you would need to a down payment of around R2 million.
Anyway if you’re buying for investment this is a terrible option (unless you enjoy losing R18 000/month), you don’t need me to tell you that but here’s the yield/cashflow graph anyway:
Down Payment Monthly Payment Cash Flow Annual Income ROI Cap. Appr. Required R0 R25642.19 R-17642.19 R-211706.28 7.43% R285000 R23077.97 R-15077.97 R-180935.65 -63.49% 6.35% R570000 R20513.75 R-12513.75 R-150165.02 -26.34% 5.27% R855000 R17949.53 R-9949.53 R-119394.39 -13.96% 4.19% R1140000 R15385.31 R-7385.31 R-88623.77 -7.77% 3.11% R1425000 R12821.09 R-4821.09 R-57853.14 -4.06% 2.03% R1710000 R10256.88 R-2256.88 R-27082.51 -1.58% 0.95% R1995000 R7692.66 R307.34 R3688.12 0.18% -0.13% R2280000 R5128.44 R2871.56 R34458.74 1.51% -1.21% R2565000 R2564.22 R5435.78 R65229.37 2.54% -2.29% R2850000 R-0.00 R8000.00 R96000.00 3.37% -3.37%
Original Post on Cape Town Property Bubble: The Orangerie: If You Enjoy Losing R18 000/month
