Blouberg, Blaauwberg, Cape Town – South Africa

Heres a interesting read for those buy-to-lease property owners. Heres a preview:

These bottom-end areas are presently very favourable for investment, and many investors are achieving excellent returns through capital gains and rentals that are not achievable elsewhere. Says Kotzé: “A buy-to-let investor who in the past may have bought one or two expensive upmarket properties, is now acquiring perhaps several less expensive properties – making it possible to achieve higher returns for similar amounts of initial investment, while simultaneously spreading the risk. It’s a trend that is repeating itself in numerous parts of the country, including areas such as Sunnyside in Pretoria, Cosmo City in Johannesburg, and Parklands in the Western Cape.”

He says that the major problem with this new trend is the fact that banks have a tendency to value homes in some areas at less than their realisable market value. However he says that at least the notorious practice of “red-lining” (in which some areas are point blank refused any bonds) appears to be disappearing.

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