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News: SA: Port Elizabeth booming

Wed, 24 Oct 07

Investors are currently clamouring to purchase property in Port Elizabeth, but whether buyers can properly identify an investment property is a debatable point...

“An investment home must have capital growth and rental return potential to qualify,” says Mike Thomas, principal of Homenet Windmill, which specialises in investment property.

Among the current best areas to buy investment homes, he says, is Algoa Park and The Hague development here is worth a serious look. “Here homes are selling for an incredible R468 000, which includes a garage and an under counter oven/ hob. This complex is in great demand by investors and tenants alike, and my personal choice as the best investment property in Port Elizabeth,” says Thomas.

Other hot investment areas in Port Elizabeth are the western suburbs. “A popular development is Chade Manor, a mixed-use scheme in Bridgemead, which has been selling like hotcakes. Other popular purchase options for locals in Port Elizabeth are plots being sold off plan.”

Buyer’s market

Despite interest rate hikes recently, Thomas believes that the best time to purchase an investment home is now. “Because it is currently a buyers’ market, homes are selling for lower than usual and there are some great deals out there for those who are willing to take the leap before the market changes next year.

“If the home offers what tenants want and the price is right, then you can expect to make a good rental return. In the same vein, if the price is right and you keep it for a while you could also expect to make a good capital return when you sell it,” he says.

“But, in order to be 100% sure of an investment property you need to work with an agent that you trust, preferably one that specialises in investment properties. Together you should identify your price range, the term for which you would like to hold the property, and the amount you would be prepared to pay to subsidise your monthly payment. This formula should ensure that you are successful.”

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