But how do you ensure that your property portfolio consistently and continually builds wealth for you? Here are our top five tips for getting the best returns on your property investments:

1)    LOOK AT THE CAPITAL GROWTH POTENTIAL OF YOUR PROPERTY

Most people underestimate the power of capital appreciation of a property. This side of your return on investment can often dwarf the positive cash flow generated from an investment property. So, always look at the capital growth potential.

READ MORE: What is the Property Practitioners Act and how will it change inspections in South Africa? 

2)    CONSIDER THE CASH FLOW OF YOUR PROPERTY

You have limited resources (monthly cash flow to subsidise shortfalls), so the more significant your monthly shortfall is, the fewer properties you can own. It is, of course, great if there is no shortfall on the property and even better if there is a positive cash flow on your property.

3)    KEEP VACANCY TO A MINIMUM

You want to make sure that you keep the vacancy to a minimum. Be quick to advertise your property once a tenant has cancelled the lease.

4)    KEEP YOUR PROPERTY IN A GOOD CONDITION

Look after your properties. Have a budget to manage the upkeep of your properties. This will ensure that your properties remain in good condition and that you can enjoy the capital growth and rental escalations on the property.

5)    BE PATIENT

To practice patience is probably the most challenging point of all. It isn’t easy, but please don’t be obsessed with what the market (capital growth, rental escalations, vacancies, etc.) is doing now. Take a step back and look at the bigger picture.

Aristotle said, “Patience is bitter, but its fruit is sweet”.

Read the entire article in the December/January Edition of Real Estate Investor Magazine.

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