With 120 sectional title units currently fully tenanted at ‘The Paddocks’ in Dainfern, there is an excellent investment opportunity for those looking to invest in property in the Gauteng area.
Units in this security estate are in high demand as it has all the lifestyle components that would suit young professionals and young couples, with use of tennis courts, swimming pool, basketball courts, laundry and 24-hour security added to the ‘extras’ here.This is according to Nelio Mendes, marketing manager of IHPC, who says units for sale vary from 32sqm studio apartments priced at R592 000 to two bedroom, two bathroom units with 65sqm priced at R1.138 million. All purchase prices include VAT and transfer costs.
The Paddocks development, which has 384 units in total, was built in 2012 by a well-known developer and has had good rental returns for all investors to date. Two bedroom units currently rent for R7 800 per month, giving a gross yield of 8.2% per annum. One bedroom units, renting at R4 900 per month are, surprisingly, offering a better yield of 9.9% gross and 7.9% net.
Units in this security estate are in high demand as it has all the lifestyle components that would suit young professionals and young couples, with use of tennis courts, swimming pool, basketball courts, laundry and 24-hour security added to the ‘extras’ here.
There is ample parking for residents at The Paddocks, with each unit allocated either a parking bay, single garage or both depending on the size of the unit bought.
In addition, its locality is almost ideal, as it is situated just behind the well-appointed Dainfern Square and within easy driving distance of Fourways Mall and various other local retail centres. This location is also ideal for those commuting in any direction as it has easy access to Witkoppen Road and William Nichol Drive.
Mendes says many people who live in this area often work in areas such as Midrand, Randburg, the West Rand or Sandton, and find that the commute from here is manageable.
Two bedroom units currently rent for R7 800 per month, giving a gross yield of 8.2% per annum. One bedroom units, renting at R4 900 per month are, surprisingly, offering a better yield of 9.9% gross and 7.9% net.He says levies are currently at a reasonable level at R672 per month for the smallest studio unit and R1 365 per month for the largest unit (a two bedroom, two bathroom apartment).
He says investment in this scheme has proven more than satisfactory in terms of capital growth, with median values listed at R567 000 (according to Lightstone) in 2012 to R1.15 million in 2016 (which could still change as this figure was taken from a Lightstone report dated 1 August 2016).
Moreover, Mendes says investors of five or more units can take advantage of the tax write-offs for buy-to-let investors in Section 13sex of the Income Tax Act. The tax write-offs that are obtainable through Section 13sex come into effect when property investors buy a minimum of five residential units with the aim of renting them out.
Mendes says buyers can off-set their investment by depreciating the cost of the units at an accelerated rate of 5% a year over 20 years. In addition, the allowance is not prorated, so a property purchase on the last day of the tax year still qualifies for the full 5% depreciation, he says.
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