Are you a thrifty person? Do you usually spend more money than you make? Saving money is a great habit. If you’ve already established it, you’ve probably noticed that R1000 is not the same as it was a year ago. The annual inflation rate in South Africa is around 5-6%, which means that if you keep your R1000 under the mattress, you lose a few rands every month.
So, why not become a real estate investor, buy a real estate property and create a passive income stream by renting out your property.
Tools and skills needed
No tools are needed to invest in real estate property. But you have to have money. If you don’t have enough money, but you are a thrifty person, here are some ideas for you:
Make a decision to become a real estate investor
Make a commitment to yourself to save at least 10% of your income
Open a savings account at a local bank
Save money and never withdraw your savings until you have enough funds to for either a deposit or buy a property.
Buy a house or flat (residential is more in demand in SA)
Hire a real estate agent or rent it out on your own (agents will usually take 10% of the rent while removing the collection burden from you).
Make 6-7% on your investments for the rest of your life.
It’s commonly known that an average return of real estate investments is around 6-7% annually. Real estate is often a safe haven in case of stock market collapses. Not only does it help you to keep your money’s purchasing power, but, unlike gold, silver, and other precious metals, it constantly generates passive income.
Moreover, South Africa’s house prices are expected to increase in the coming years.
What all wealthy people have in common is that they invest in real estate.
You don’t have to be a multi-millionaire in order to invest in real estate.
If you don’t have millions, follow our formula described above.
Pre-Investing: Before Investing in Real Estate