Property investing in South Africa 1% rule

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Property investing in South Africa 1% rule

Рет қаралды 50,871

2 жыл бұрын

If you're starting out in real estate investing, then you need to know about the 1% rule of thumb of buying property in South Africa!
This rule is a basic math equation geared to help you quickly estimate the cash flow of potential real estate investment properties quickly!
Monthly Rent / Property Value = 1% or above
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Goodluck with #BuyingPropertyinSouthAfrica💰
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#1%rule #RealEstate #property
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Пікірлер: 77

@louisreynhardt 2 жыл бұрын

What do you think about this rule?

@thabanemkhize9228 Жыл бұрын

Thanks Louis, this helps a lot been wondering how to know if a deal is a good one. Helps a lot ! Louis id like to pass something by you via email, would you be so kind to share your best email? thanks again.

@louisreynhardt Жыл бұрын

Sure my friend. You can send me a email at louisreynhardt@gmail.com 💪🏻

@monkeycrunch9324 Жыл бұрын

I think it's pretty awesome and even more it is efficient, especially if you have the credit score and so on already to just walk up and buy the place! I am getting into the property game now though and I am wondering what is the point of breaking even, isn't the idea to make profit? So what's the strategy here? Break even on 5 properties so own 5x R 800 000 and they effectively pay for themselves? Then what? You know what I mean? I hope that makes sense.

@MultiScotty24 10 ай бұрын

Sorry but in my area a 1.1 to 1.2 mil property can only get 9k rent. Don’t know how you do it, but if I include levies etc. I would make a loss monthly

@louisreynhardt 10 ай бұрын

@MultiScotty24, you don't have to say sorry. It just doesn't work in every area or with every strategy. It's also just an indication to see if it's worth spending more time on the deal. It's only based on your rental income and purchase price. Once it passes the rule, you can do ROI calculations. Im in BFN, and I reguraly see deals like this in JHB/ Pretoria as well. It will not work with higher income properties. it's focused on the lower to mid income marker. Hope this makes sense. Thanks for watching

@hhhhh-il6lp Жыл бұрын

I've been using this rule unconsciously. Great tip!

@louisreynhardt Жыл бұрын

Great stuff, thanks for commenting brother 💪🏻

@tien3097 2 ай бұрын

You may never know the value of that little money you have until you go bankrupt the bad experience I had last year really made me feel our school curriculum should have more financial literacy and education... It is never enough to have a good job, a huge salary and all the luxuries at your disposal,... But putting some money aside and investing it wisely is never a bad idea,... I learned to invest, no matter how small but life really taught me the hard way.... Investing gives you an edge over tomorrow.... I hope everyone learns too God bless you in your efforts to educate others, it is always interesting to watch your contents.

@louisreynhardt 2 ай бұрын

Thank you very much for the support and thanks for your comment. Appreciate it 🙏🏻

@calmmusic6374 2 жыл бұрын

Best way to analyze deals quick

@ZitaFilmz 2 жыл бұрын

Baie cool ou. Jy leer my baie. keep on. :)

@louisreynhardt 2 жыл бұрын

Baie dankie Zita, ek is bly om dit te hoor. Dankie vir jou support 👊🏻

@Asanda82 9 ай бұрын

Hi Louis, thanks for the tìps and info. Im a novice with one property. I only now subscribed

@louisreynhardt 9 ай бұрын

Thanks for watching, and well done. Owning one property is good, and congrats for taking the first step to building generational wealth. If you want to check out my latest 2 or 3 videos on the channel

@sihlemasondo2898 Жыл бұрын

Thank u I'm gona start using this 1% rule

@louisreynhardt Жыл бұрын

Great stuff. I hope it will help you 👍

@armandbadenhorst Жыл бұрын

So I am knew into buying investment properties and this is my first residence I Recently bough,t a 1 bedroom duplex in a well established neighborhood for R380000 and the market value is around R600000 with the rates,taxes,bond and leavy I am currently making a good R1200 out of the deal 😀 🙂 can't believe I found this Dimond

@louisreynhardt Жыл бұрын

Great stuff man, thanks for sharing. This sounds like a really good deal, especially in these high interest rate environments. You've got yourself a good asset

@waterblomrandvaal34 2 жыл бұрын

Morning doing my rounds as always .Ayanda Nobatana from midvaal.

@louisreynhardt 2 жыл бұрын

Great to have you Ayanda 💸🚀🙌🏻

@blankmedia01 10 ай бұрын

Fair rule. I like it....

@louisreynhardt 10 ай бұрын

Thanks for watching 👊🏻

@jehukhomola4920 Жыл бұрын

Louis this is a very good tip. Thank you

@louisreynhardt Жыл бұрын

Pleasure my friend 😁 🙌🏻

@Ak3chi1 Жыл бұрын

Ek wil graag in eiendomme in gaan, maar hier in Mosselbaai is dit meer soos 0.5% rule. Eiendomme is bitter duur hier.

@louisreynhardt Жыл бұрын

Dit is baie duur ja, daar gaan mens nie sommer cash flow eiendomme kry nie. Dit is waarvoor mens die 1% rule gebruik. Daai kant se eiendomme gaan meer oor appreciation en goed soos refinancing kan lekker daar werk.

@NonnyPali Жыл бұрын

Very handy tips, especially to me as a novice in this industry. How about writing a handbook/pocket book on tips to spot good potential real estate deals. Pdf forms are way these days.

@louisreynhardt Жыл бұрын

Thanks a lot. I'm glad you could learn from the video. Check out my real estate playlist for similar videos. I will eventually bring out a book/pdf 💪🏻

@yanelamtati8131 9 ай бұрын

Thank you for this 😊

@louisreynhardt 9 ай бұрын

My pleasure, thanks for watching 🙏

@malcolmdunkeld7866 Ай бұрын

Hi Louis, thanks for the great videos. I own a property but my new employment includes housing. How do I best decide whether is should keep my property and rent it out or sell it? I assume the 1% rule is slightly different as I have been paying off the bond for a while. Do I calculated on what I still owe on the bond?

@louisreynhardt Ай бұрын

Thanks for commenting and supporting the channel. You can still use the 1% rule as a first step. How much can the property be rented for now ? Lets say R7000 per month ? What is the value of the property now ? Lets say R700k Then it meats the 1% rule.

@celebrityscoop981 2 жыл бұрын

Danki Louis

@louisreynhardt 2 жыл бұрын

My pleasure , Thank you for Watching 💸 🚀

@RL-we7dg Ай бұрын

Basically you’re looking for a 12% rental yield. Is this to match the bank interest rate?

@louisreynhardt Ай бұрын

Yes, gross yield. But remember, this is simply a first measurement. If it doesn't even pass this rule, it doesn't help to analyze it further. Once it passes, then you do your ROI calculations. Hope it answers your question

@Meu6244 Жыл бұрын

Hey, Louis. I am looking to go into property wholesaling, and I'm confused about certain things: 1. Do I need a FFC to start, or do I just go in as a sole proprietor? 2. I have a self-drafted contract, do I need to send it in at the PPRA, do I need to pay to get the contract approved stamp or go to a property lawyer? Your help would be appreciated.

@louisreynhardt Жыл бұрын

Hi there, Thank you for your comment. I am not a professional in wholesaling, so it would be best to consult with someone who has done it before. I would say that you can still wholesale as a sole prop because you won't be acquiring any property. I would suggest setting up a bulletproof contract. You can speak to a lawyer for free to get some advice on whether a self drafted can work. Either way, I would let someone look over it.

@nadiadomingoselebedi Жыл бұрын

Hi Louis, what do you think about fractional property investing? I saw neighbourgoods advertising this. I’ve never heard about it until now

@louisreynhardt Жыл бұрын

Have a look at Easy Properties. I made a few videos about the platform, so just search for that on youtube. You can let me know in the comments if you have soecific questions. There are some advantages and some disadvantages. I only invest a small portion in this.

@peetvanstaden1990 Жыл бұрын

I have not seen a property in cape town that's above 1%. Maybe not looking in the right places?

@louisreynhardt Жыл бұрын

Overall Cape Town prpperties won't pass this rule. The market there is much different and more focused on appreciation instead of cash flow. The areas where it might work is lower income areas and student accommodation or multi lets

@kingofbuuwa 8 ай бұрын

That is 12%annual return that is ridiculously high! Where do you find such properties?!

@louisreynhardt 8 ай бұрын

12% is consiodered average. The short answer is Mulit lets !

@Herr_Vorragend_HH 2 ай бұрын

What is the reason for the 1 % rule? What is the math behind that rule? I did not get it.

@louisreynhardt 2 ай бұрын

Its effectively like Gross yield. You can google Gross yield for a better explanation. The 1% rule is like gross yield on a monthly basis.

@erikbritz8095 5 ай бұрын

*Hi Louis i want to ask can this be applied to vehicles when buying them for your business etc. reason is this might be a good way to know if a vehicle makes sense to buy at all or not*

@louisreynhardt 5 ай бұрын

Not sure if it makes sense for vehicles unless you generate some sort of income from the vehicle. You can elaborate on the bussiness if you want to. Otherwise generally I would say buy a Toyota 🤣

@erikbritz8095 5 ай бұрын

We think the same on the toyota part haha but no i mean can a 1%-2% rule be used to gauge if a certain car is worth the down payment or not for example if we pay 2% of the cars total cost PM and it fits inside the budget and time window would that make sense to use? Now this is post budgeting and seeing that after expenses this is what is available to pay off a new vehicle.(for context mine will be used to haul stuff weighing less then 500kg so a bakkie or truck is not the aim. thanks for any input and for a great video i will share it today. @@louisreynhardt

@aaronlamula6949 Жыл бұрын

Good afternoon my brother 💪... As a real estate beginer, what advise can you give me, starting from buttom?💪 I'm a student at North West University. I'm not interested to my course, I want to become an Rela Estate 😢

@louisreynhardt Жыл бұрын

Whatsup my guy, Firstly I would say congrats on starting with this insanely rewarding journey. The best advice I could give is to educate yourself. Watch all my videos where I talk about real estate so you can get all the necessary information. Read everything you can get your hands on and find yourself a mentor that can guide you. Lastly remember to save asuch as you can so you always have a reserve fund

@aaronlamula6949 Жыл бұрын

@@louisreynhardt Thank you sir ✌️✅

@siphamandlathusi5674 Жыл бұрын

hello sir.I have one question to ask please assist. if I did you the equation and keep on giving me 1% and the number after the comma please kindly explain if this still the right decision to invest in this property

@louisreynhardt Жыл бұрын

When it passes the 1% rule, it just means you can do further analysis on the deal. The 1% alone is not the only way to analyse the deal. Any nr. More than 1 passes the rule. From there, you have to do ROI and cash flow calculations. Check out my property investing playlist to learn about this.

@Adonis298 Жыл бұрын

Louis how manny properties are in your portfolio?

@louisreynhardt Жыл бұрын

I try to buy 3-4 properties within a separate entity and own multiple entities. If you want to find out more, you can book a session with me where I feel more confortable to share details. 💪🏻

@mzwandilemahlangu2765 Жыл бұрын

Hi Louis. Does this rule only apply to the purchase price or do you also have to take into account the other expenses like attorney fees and renovation fees?

@louisreynhardt Жыл бұрын

This is only a quick indication of whether a deal will be cashflow positive or not. So you only use the purchase price and the rental amount per month. You can watch my " Return on investment " video to understand more detailed calculations. Browse around on my channel, I am sure the real estate videos will be very helpful.

@mrdcza4961 Жыл бұрын

HI Louis, so essentially anything over 1% is a good deal?

@louisreynhardt Жыл бұрын

Not necessarily, if it passes the 1% Rule then you can invest more time to analyse the deal further doing ROI calculations etc. The 1% Rule is just a quick way of sorting deals

@dannyarcher6163 Жыл бұрын

The rule gives you 12% ROI

@louisreynhardt Жыл бұрын

In this example yes, thats why its not the only metric to use to analyze deals this is just to scan through potential deals quickly. If it doesnt pass the 1% your ROI willl probably be quite low

@thurstonhaynie1611 Жыл бұрын

Hi Louis I'm 19 in Cape Town and I'm wanting to invest in small cash flow real estate e.g apartments but I don't know the whole legal procedure and fees that come with it I want to know by you personally if you would love to show me how this business idea works and mentor me ?

@louisreynhardt Жыл бұрын

Hi Thurston, Thank you for your comment. There's quite a few things that are important to understand before investing in property. Stuff like the structuring, your stategy and your risk appetite. Just to het you started, focous on building a good credit score. You can send me an email at louisreynhardt@gmail.com if you would like to schedule a one on one session because it won't be possible to talk about all the details via text

@loyisongcobo6371 Ай бұрын

him or 🥴🥴

@louisreynhardt Ай бұрын

🤣🤣🙌🏻

@jacovanheerden7081 Жыл бұрын

Wat is jou persentasie geld wat Jy in beleggings het, of is alles in eiendomme

@louisreynhardt Жыл бұрын

Dit is tans omtrent 45% investments, 28% cash , 2% crypto en die res is Eiendom 🙌🏻

@jacovanheerden7081 Жыл бұрын

@@louisreynhardt Ek het net 10% in investment, nou wil ek alles in eiendom sit omdat rente koers weer opgaan. Maar ek glo Jy kan nie al Jou eiers in een mandjie hé nie 🤣🤣

@louisreynhardt Жыл бұрын

Dit hang maar af wat is jou plan/strategie en eind doelwitte. Almal se strategie verskil so jy moet doen waarmee jy gemaklik is. Eiendom is 'm great manier om jou net worth te groei