As more South Africans diversify their property portfolios, many are looking offshore in search of a good rand hedge and global growth. Diversification is a key wealth strategy but what can we actually get overseas with our rands? Here’s a list of what you can buy for R5million.
An apartment on Cape Town’s Atlantic Seaboard
In Sea Point and Green Point you can pick up a 2-bedroom, 2-bathroom apartment with about 80m2 of open-plan living area and a balcony sporting your pick of a mountain or sea view. The Atlantic Seaboard has seen impressive capital growth over the last 10 years. Though it has settled for now, it’s an area that remains resilient. Yields are tricky due to a saturated rental market and pricy borrowing. Short-term rentals can offer returns of above 6% if you purchase in an Airbnb compliant building.
A house in Johannesburg
In Jozi you can find a three-bedroomed home in Bryanston on a large stand of up to 2000m. Choose from an established cluster or a new modern development in a secure complex. Spacious open-plan living, staff accommodation, a swimming pool, double garage and a decent garden come as standard. On longer-term rentals you could expect to see yields averaging 7%, assuming no bond. Bonding the property will wipe out your returns. Growth in Johannesburg’s residential market looks limited given crime concerns and consequent semigration that has slashed house prices.
Riverside apartment in Manchester, UK
Manchester in the UK is the best city in the world to invest in this decade, according to HSBC and JLL, with eye-watering capital growth potential over the next five years. You could purchase a premium riverside apartment in a brand new development offering the convenience of city living from a stylish waterfront location. Apartments from R4.5 million feature opulent interiors, private terraces and trendy communal areas. They can also be fully managed at a yield of 6% NET, and leveraging within the UK could push these returns even higher.
3 x student accommodations in the UK
The UK is definitely not out of reach for the average SA investor. For R5 million, you can start a small property portfolio, with three Purpose Built Student Accommodation (PBSA) units, the UK’s most resilient property asset class. Buy into an excellent luxury student development in a thriving university city. The apartments come fully furnished and managed. These hands-off projects offer unrivalled investor returns, boasting guarantees of 8% NET for five years.
A townhouse on a golf resort in Portugal
Portugal has become a popular destination for South Africans looking to secure a Golden Visa and eventually EU passports. Here you can get a luxury townhouse on the exclusive Praia D’El Rey Golf & Beach Resort. This is home to golden beaches, a world-class golf course and long days of sunshine. The 3-bedroom, 3-bathroom townhouses have balconies, communal gardens, swimming pools and access to the resorts communal facilities and golf club. Holiday lets offer good returns of up to 4% and there are tax benefits.
On the cobbled streets of Old Porto you could buy a stunning, traditional apartment fused with modern luxury finishes. The old-style buildings have been rehabilitated to the highest standards of comfort, quality and security, a favourite for locals and visitors. Short-term yields can reach 9%. Expected capital growth is promising as the government improves infrastructure and the international visitors rate it one of the best cities it visit in Europe.
Contact Hurst & Wills for more information on any of these promising property investments.