Invest in Ballito
Category Investment
Ballito's growth cycle started in the 90's with the development of Zimbali Coastal Resort followed by the establishment of the Ballito Business Park and the Lifestyle Centre in 2002.
ComProp anticipates the next commercial boom to follow on the successful wave of continued development to the north, with the catalytic 50 year expansion plan of our very own Dube Aerotropolis based around King Shaka International Airport.
The secrets of successful commercial property investment are to buy early, buy in an emerging-market area while the prices are low and then you hold onto the properties for the medium to long term.
Owning commercial property can provide investors with steady rental income as well as exposing investors to capital appreciation.
Before investing in a commercial rental property, you need to understand these key elements:
- Location
What is going on in the local commercial business parks as well in the wider commercial sector
- Tenants
The strength of lease together with the quality of the tenants and history of renewals
- Bodies Corporate
If the property forms part of a Body Corporate, it is important to examine the strength of the body corporate's financial position. Are there sufficient reserves to cover planned maintenance and are there any special levies on the horizon? Is the Body Corporate being managed professionally in order to maintain the value of your asset?
- Timeframes
The longer your investment time frame, the more valuable the returns and more favourable the exposure to capital appreciation
- Returns
What is the return on the investment (ROI)?
The ROI is absolutely key when assessing an investment property. Due to inflationary related increases in rental rates the ROI grows year on year and can easily outperform other asset classes.
While the ROI calculation can get complicated, simply put ROI equals the annual benefit (or return) of an investment divided by the cost of the investment.
The annual benefit or return is the rental income less overheads such as rates, levies and operational costs.
The benefits of investing in commercial property are:
- Significant annual returns over a 5 to 10 year period
- Option to engage with banks to fund property investments
- Capital appreciation on the value of your commercial property
- Using the property as leverage for further property investments
- Being able to use professional management companies, like ComProp, to give you advice on sound investment opportunities
There are also advantages of owning your business premises as opposed to renting.
As an owner you benefit from capital appreciation and there is inevitably a cost saving with flexible asset management versus lease terms to suit your business model.
You are welcome to contact the team at ComProp if you would like to take the initiative to start doing commercial property deals or expand your existing portfolio. Together we can bench mark returns and discuss the pros and cons of sound commercial property investment opportunities on our prosperous North Coast.
Author: Dale Williams
