A lesson in throwing good money after bad.
Imagine, if you will, you’re a South African living in London. It’s 2015. The mid-2000 buy-to-let boom is a distant memory. Some of your friends made a small fortune, but for various reasons you missed out.
You’ve still got family in Joburg. The rand is at about R18 to the pound and you’re scouting around for investment opportunities.
Buying a modest two-bedroom apartment in a complex in the heart of Fourways in Johannesburg seems like a good idea.
Residential property isn’t exactly shooting the lights out. The country is stumbling through the second term of Jacob Zuma.
The Gupta family had a plane of wedding guests land at Air Force Base Waterkloof two years prior, but things are looking okay. Load shedding is a regular feature, in the first half of the year at least, but the worst is Stage 2.
And people need a place to live. Joburg is too big to fail. Plus, the bank will lend you most of the money.
You find a ‘middle unit’ in an estate built in the early 2000s by a developer with a household name. It is well run and secure. You’re chuffed as you knock down the asking price a little and the seller settles on R850 000.
Fast forward six years. The economy has been battered by the Covid-19 pandemic. You’ve had mixed luck with tenants – some good, some bad.
The problem now is you’re battling to find any good quality prospective renters. It stands empty for months.
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