24 February 2008
I have been doing a bit of research and stumbled upon an interesting website by Coert Coetzee called http://www.treoc.com
Now, personally I have never attended one of Coert’s presentations, but from what I have read his investment principles are spot on. I got taught these principles through my father, but not everyone is the same situation to learn from their family members. Seeming though I am not going to be offering courses in the near future to spread my knowledge, I would advise getting hold of Coert and his team to learn.
Read his article Residential Property Is Always a Good Investment. Listen to his advice and you will be on your way to financial riches.
Residential property is always a good investment
By Coert Coetzee
“I think you’ll all agree with me that residential property is a good investment. The best proof of this is your own private home. According to surveys carried out by the banks, people live in a house for an average of seven years before selling it to buy another one. As far as I know, no-one has ever received less after seven years than what they paid in the first place.
According to ABSA, the average growth on residential property over the past 20 years has been in the region of 13% per annum. It’s been a lot higher over the last four years, but let’s stick to 13% and do a little calculation. A house that cost R360,000 seven years ago would sell for R846,000 today. At first glance that seems to be a good property investment, but is it a good investment to buy houses and rent them out?
I say that it is, but many investment managers won’t agree that it is good practice to buy and let, especially not in the current market. Their argument is that rentals are low and prices are high. If you pay R846,000 for a house and only receive R5,000 rental per month, you get an annual return of 7%. There are plenty of other investment instruments that will give you more. But what these investment managers lose sight of is that residential property is not about rental, but rather about capital growth. When I do the calculation as I did in the previous paragraph, everyone agrees that it was a good investment.” – by Coert Coetzee