Newbie - Is it worth investing in South Africa right now?

Question

Hi ladies and gents,

I'm just starting out from Johannesburg, South Africa and I'm wondering if anyone on here is currently investing in real estate (rentals) in South Africa at all? I guess my main concern with approaching the market is due to our current political situation - facing the very real possibility of "land expropriation without compensation"...

Is it really worth a investing here or should I perhaps rather shoot for investing internationally, even though I am completely new to the real estate game and have absolutely no experience?

Charl Ellis · Answer

Hi Marno. Hopefully you read my previous reply on your other post, but basically - yes - I'm investing in South Africa property. I have a very positive outlook for this country (I don't know how you feel?). Even though the whole "land expropriation without compensation" debacle is going on, I still believe there is no better time to invest in property (the right ones) than now. People will always want accommodation, and with the current influx into major cities there will always be a need for a roof to sleep under (especially middle to upper class).

My opinion regarding the land expropriation matter is that "they" will not target fully developed and established rental properties. They are currently targeting vacant farms, empty plots and farms that are not producing its potential income. It will take a very long time (and I believe it won't come to that) until developed land (houses, apartment blocks, estates etc.) will be targeted.I'm also new to the whole rental property investment business, but I know by keeping a positive outlook and doing proper analysis and planning will bring you great success in South Africa. There are so many opportunities in this country. We just need to open our eyes and put in the effort.

Tchaka Owen · Answer

@Nathan G. - you might want to learn more about the country beyond that one friend's account.

@Marno Fourie - IMO, the post by @Jason Malyon and the 2nd paragraph by @Charl Ellis pretty much hit it on the nose. Keep in mind that ANC took over about 26 years ago and while there's been a little redistribution of land, it's not been tremendous. And the focus has been on farms. Unless that's your investment profile, there's no need to worry about that. If anything, crime should be a bigger concern.

Jason Malyon · Answer

Hi Marno,

My opinion is that I would rather invest in local markets, South Africa still has a very affordable market, and its easy to find good deals that cash flow. The whole land expropriation without compensation is for land that you cant prove that you bought. and they are focusing on farm land. I know it has scared away some investors, but better opportunity to buy, once all the legislation's are sorted out and the investors come back in the property price is going to rise up again. People will always need a place to live no matter what the situation is.

Just my opinion.

Marno Fourie · Answer

@Jason Malyon - Thank you so much for sharing your opinion. I had a strong feeling this is probably the case and was hoping someone could confirm or at least share the same thought process. In my opinion, I would also think this is the perfect time to start buying as some people are fleeing the country, with the thought of their property and safety being at risk and selling their homes - they should desperately be looking for buyers and willing to negotiate great deals to speed up the process. Or perhaps some will be selling and moving into rental units to ease up the process of packing up and leaving in case things go south here - putting us in a great position to buy and let.

@Charl Ellis - I fully agree with your statements and share your views on this. It's great to hear some logical and rational thoughts of other local investors - even though we are not exactly sure what is planned or how bad it will end. I guess my main concern was just to make sure I'm not being overly optimistic before I get myself into this game of investing locally, so thank you all so much for your reply and input on this post.

To everyone else, including @Tchaka Owen, a big thanks - I really do appreciate the feedback and I remain very excited to start my journey as an investor - be it locally, then eventually hopefully international. You guys are all rock stars and I admire you! I will consider each opinion on my journey and continue to seek supporting information through my research before jumping into any market.

Jonathan Sikombe · Answer

5 years later, how have the responses to this question been accurate or way off the mark? Money is still being made in real estate with some cities seeing property values gaining much more than can be dreamt of in other markets.

John T. · Answer

Due to the current political climate in South Africa, I would NOT invest any money in the South African economy.  It seems that there is a strong trend toward socialism and other forms of legalized theft  in South Africa.  Get out of South African and invest your time and money elsewhere.

Nathan Gesner · Answer

If you are white, I would seriously consider finding another country to live in. I have a friend that moved here from South Africa. His family had a very successful farm taken from them about 15 years ago and it's now a dust bowl and in ruins. He immigrated here but is still trying to convince the rest of his family to get out.

Jason Malyon · Answer

Elections is this year

Newbie - Is it worth investing in South Africa right now?

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