Buy or Rent in Cape Town? The Rule of 8.5%
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Property in Cape Town has been in high demand, with property prices and rent increasing insanely each year. As an occupant of a property, the question remains: should you buy a property or rent one and build up a stock portfolio with your excess cashflows?
Here, I examine two current examples of buying versus renting: one where buying makes sense and one where renting makes sense. I also establish the break-even point of 8.5%, which helps determine whether it's better to buy or rent a property.
If you want to invest wisely and build more wealth for yourself, then this video is for you!
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TIMESTAMPS:
00:00 Introduction
01:36 Why do people think buying is better than renting?
02:20 Property in Cape Town, South Africa
03:01 Details of the analysis
04:06 Buy vs Rent Example 1
11:23 Two additional considerations
12:29 Buy vs Rent Example 2
18:50 Comparing to an S&P500 ETF
19:28 What is the right choice?
20:07 The rule of 8.5%
23:20 Investing in a South African Index
24:08 Tax considerations
SOURCES:
Payprop website: https://www.payprop.com/za
Property24: https://www.property24.com/
Reserve Bank: https://www.resbank.co.za/en/home
Satrix: https://satrix.co.za/
Stats SA: https://www.statssa.gov.za/
DISCLAIMER:
All content I share is educational in nature and does not constitute financial advice. Any calculations or returns referenced are based on historical figures, future returns are not guaranteed. All information shared is market sensitive and subject to change as markets and economic conditions evolve. Personalised one-on-one advice is available exclusively to my Invest with Confidence Executive students through direct consultation calls. I am authorised to render financial services, including advice, under Wealth Office (Pty) Ltd, FSP 54904. https://www.moneywithcarla.com/terms