I would appreciate some input please, on this situation.
Bought a property in 2016 for R1,700 000 in Pretoria East, 3 bedroom free standing house in complex in a boomed suburb. Put down a R600 000 deposit thinking this was it. It wasn't.
A year later moved to Joburg, bought another house (well the bank did for me).
Been renting out the Pretoria house since then. Currently getting R12500 rental per month. After all monthly expenses are paid (bond, levy, r+t, agent fees) I am losing R2990 per month currently, especially with the current interest rate. I can absorb this loss, it's no problem.
Current tenant is vacating, will be aiming to get R14500 less agent fees, so probably around R13500. My current yield on the property, if I have this right, is 5.7%. The current value of the property is R1,850 000 apparently. So the only reason I still have the property is the large deposit which offset the repayments and means the current loss is manageable.
I know property is a long term investment. The property is relatively new, in good condition, in an excellently run complex with a low levy, in a good, boomed suburb. I like the idea of acquiring property in terms of diversification, it will be paid off in 13 years. Technically, at the moment, I am acquiring this asset and it is only costing my R2990 a month perhaps is a way to think about it, though I lost R600k liquidity to be in this situation.
Do I hold fast and continue? Thoughts and inputs would be greatly appreciated, thanks!
Bought a property in 2016 for R1,700 000 in Pretoria East, 3 bedroom free standing house in complex in a boomed suburb. Put down a R600 000 deposit thinking this was it. It wasn't.
A year later moved to Joburg, bought another house (well the bank did for me).
Been renting out the Pretoria house since then. Currently getting R12500 rental per month. After all monthly expenses are paid (bond, levy, r+t, agent fees) I am losing R2990 per month currently, especially with the current interest rate. I can absorb this loss, it's no problem.
Current tenant is vacating, will be aiming to get R14500 less agent fees, so probably around R13500. My current yield on the property, if I have this right, is 5.7%. The current value of the property is R1,850 000 apparently. So the only reason I still have the property is the large deposit which offset the repayments and means the current loss is manageable.
I know property is a long term investment. The property is relatively new, in good condition, in an excellently run complex with a low levy, in a good, boomed suburb. I like the idea of acquiring property in terms of diversification, it will be paid off in 13 years. Technically, at the moment, I am acquiring this asset and it is only costing my R2990 a month perhaps is a way to think about it, though I lost R600k liquidity to be in this situation.
Do I hold fast and continue? Thoughts and inputs would be greatly appreciated, thanks!