The greatest advantage of investing in Property is that you will effectively get interest on the money you owe the bank and not on the money you have already invested in your loan repayments! You therefore make money on your DEBT outstanding and not on money paid!
Let me explain!
Assume you purchase a property for R1.2
Million. Assuming your current repayments are R10 000
per month (R120 000 per year).
If your property value grows
by 10% in year one your property value will increase
from R1.2 Million to R1.32 Million in year one. This
means an increase of R120 000 - effectively meaning you
will earn interest (capital growth) on
the R1.2 Million of R120 000. This is exactly the same
amount you have already paid the Bank. You paid R120 000
and received R120,000 back in the form of capital gains.
This is not bad-You paid R120 000 and earned R120 000.
If you had the benefit of also living in the property, you effectively stayed for FREE!! That's right, you paid R120k to live in your own property and you earned R120k. Unfortunately your Capital gains are not cash in your pocket, but it is yours-an asset in your estate!
In year 2 (if interest rates remain the same) you will earn Capital Gains on the R1.32 million (new real value of your property) and not only on the R1,2 you paid for it. This means you now earn more "Interest" on the new value of your property, while you still paid only R120 000 back to the Bank in that year. You now start making profit! This repeat and get bigger every year!
Now study the Table below!
Assumptions
used in the tables below-
1) You paid R1.2 Million for the property
2) Interest
rates remain the same every year and do not increase or decrease.
3) Property values grow every year at 10% (Capital
gains)
4) These values are the same for all Currencies
| End year | Property Value | Capital Growth for the year | Annual repayments | Real Profit |
| 1 | 1,320,000 | 120,000 | 120,000 | 0 |
| 2 | 1,452,000 | 132,000 | 120,000 | 12,000 |
| 3 | 1,597,200 | 145,200 | 120,000 | 25,200 |
| 4 | 1,756,920 | 159,720 | 120,000 | 39,720 |
| 5 | 1,932,612 | 175,692 | 120,000 | 55,692 |
| 6 | 2,125,873 | 193,261 | 120,000 | 73,261 |
| 7 | 2,338,461 | 212,587 | 120,000 | 92,587 |
| 8 | 2,572,307 | 233,846 | 120,000 | 113,846 |
| 9 | 2,829,537 | 257,231 | 120,000 | 137,231 |
| 10 | 3,112,491 | 282,954 | 120,000 | 162,954 |
| Total Capital Growth | 1,912,491 | |||
| Total Income Profit | 712,491 | |||
| Gross effective Profit | 2,624,982 | |||
The fact is-Property is a Brilliant Investment!
At the moment property values are very low in spite of the fact that Interest rates are very low. If you can buy Property at it's current low values and wait out the bad economic times, you should make even more on Capital Gains.
| Let's Rent out the Property (it is a Investment property) @ only .08% of it's value per month | |||||
| End year | Property Value | Capital Growth for the year | Annual repayments | Rental Income @ .08% | Real Profit |
| Purchase | 1,200,000 | ||||
| 1 | 1,320,000 | 120,000 | 120,000 | 115,200 | 115,200 |
| 2 | 1,452,000 | 132,000 | 120,000 | 126,720 | 138,720 |
| 3 | 1,597,200 | 145,200 | 120,000 | 139,392 | 164,592 |
| 4 | 1,756,920 | 159,720 | 120,000 | 153,331 | 193,051 |
| 5 | 1,932,612 | 175,692 | 120,000 | 168,664 | 224,356 |
| 6 | 2,125,873 | 193,261 | 120,000 | 185,531 | 258,792 |
| 7 | 2,338,461 | 212,587 | 120,000 | 204,084 | 296,671 |
| 8 | 2,572,307 | 233,846 | 120,000 | 224,492 | 338,338 |
| 9 | 2,829,537 | 257,231 | 120,000 | 246,941 | 384,172 |
| 10 | 3,112,491 | 282,954 | 120,000 | 271,636 | 434,589 |
| Total Capital Growth | 1,912,491 | ||||
| Total Repayments | -1,200,000 | ||||
| Total Rental Income | 1,835,991 | ||||
| Gross effective Profit | 2,548,482 | ||||
This is our focus
To buy Quality properties at discount prices
To Generate Monthly cash flow for shareholders through Letting the properties
To create huge Capital Gains
and the result?
CASH IN YOUR POCKET - SECURE INVESTMENT - ANNUITY INCOME - ESTATE GROWTH
Your Options:
You either have Cash to Invest or you have
collateral to Secure a loan!! Either way you can participate....
If you need to secure a loan to Invest in a property then either of the following applies and the information will be needed to assist you to raise money from a Financial Institution:
Salaried Investors: Pay slip and last 3 month Bank Statements
Self Employed/Business Owners:
Last 3 years AUDITED FINANCIAL STATEMENTS
12 Months Bank
Statements
Auditors letter to confirm Income
Income
Projection next 12 months
Please Note: If you are married In Community of property, the information will also be required from your Wife/Husband!
You can buy as little as 10% in any of these valuable properties.
The Procedures to Invest Explained
Why you should invest in Property
Legal Disclaimer: The information contained herein is subject to change. The Club nor any of its office, staff, agents or affiliates can in any way be held liable, shall be held totally harmless and shall not be responsible for any incorrect information, typographical, misinformation, misprints, ideas or proposals contained herein. All information is deemed reliable but not guaranteed. All properties are subject to prior sale, price changes and withdrawals. All rights reserved
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Page Last Updated 2010.01.18 |
