2009/03/09

There are two golden rules to property investing, says a leading property expert.

"The first is to invest with your head and not your heart and the second is to visualise the type of tenant that the property will attract. You have to decide whether that is the sort of person you will able to rely on," says Lanice Steward, managing director of Anne Porter Knight Frank (APKF).

Steward says the preparation of the home is all-important. "Obviously, if a house or an apartment or its grounds are run-down they will not attract a quality tenant. Similarly, if the unit is in an area that has gone downhill, good tenants will avoid it."

Sectional title apartments in blocks which lack the funds for proper maintenance are a particularly bad risk, said Steward, and it is worrying how often people buy into these without checking the levy and accounts position.

This statement, said Steward, should not be taken to mean that less affluent areas are automatically a higher risk than the upper bracket areas – there are expensive, flashy homes in expensive suburbs which also attract "dicey" tenants.

Asked for tips on up-and-coming Cape Town areas, Steward added that well-maintained three and four-bedroom homes can be bought in Bergvliet and Meadowridge for under R1,5m – these represent a good appreciating investment.

"Bergvliet and Meadowridge will join Lower Constantia as areas offering excellent growth potential."

Similarly, Sybrand Park, where prices are now around R1,2m, offers buyers an excellent opportunity with good prospects.

Those keen to invest in Cape Town's established areas, said Steward, can do no better than to take another look at Kenilworth, Wynberg, Rondebosch and Claremont.

"People will always want houses here because they are well-placed for schools and shopping centres."