Updated: Dec 9, 2020
South Africa has been in a recession for nearly all of 2020 and November is no different.
This has led to many of my students, potential real estate investors and beginner investors to be concerned about investing today due to the poor economic environment.
This shouldn’t be the case. Here’s why: Despite the country being in its second recession in as many years, I have closed over 20 deals, acquired projects over R240 million rands and hosted the country’s largest virtual real estate investment summit.
I don’t say this to brag. I say it to show you that the current economic environment does not have a bearing on your success as a real estate investor.
It may sound unlikely, but South Africa’s stats back me up here.
In Q1, 17.6% of homes were sold to first-time buyers
Major banks are accepting more bond applications than ever before- a whopping 73%
The average home loan interest rate is currently 7%- the lowest it’s been in 50 years
Now is the perfect time to invest in real estate- during a recession. Here’s why:
Real estate is a reliable investment
When looking for properties to invest in, you may notice that property prices have remained relatively the same. This is because the real estate industry does not fluctuate as much as other types of investments like stocks or bonds.
Real estate also consistently appreciates in value, which means that when you land a good deal, you will rarely see a low ROI.
There is less competition
Many South Africans were unprepared for the current recession. They are scrambling to make ends meet. Purchasing a property is outside the realm of possibility for most of them.
This is good news for you because it means that there is less competition in the market. Less competition means that you will not only be able to find more high quality deals, but you’ll be able to get them at better prices than before the recession hit.
Interest rates are lower
Home loan interest rates almost always decrease during a recession. This year, South African banks have cut interest rates 5 times, which is almost unheard of.
In fact, the current home loan interest rate is sitting at 7%- the lowest it’s been since 1966! Lower interest rates mean that you can invest in property right now and pay less for a loan than you could have any other time in your lifetime!
Banks are accepting more bond applications
Because of the recession, less people are buying homes right now, which means that banks are desperate to give out bonds. So desperate, in fact, that they have started to approve a higher rate of 100% loans!
On top of that, your chances of being approved for a typical bond are extremely high. In 2018, the approval rate for bond applications was 60% on average. This year, that rate has increased to 73%.
You can prepare yourself for the next recession
According to results from a recent survey, 94% of investors want to generate rental income from their investment property. That’s good news because rental income is the steadiest form of passive income.
We may be in a recession, but people still need somewhere to live.
If you invest in the right market and can find tenants that will stay in good standing, you will be able to make a steady passive income consistently. That way, you will be prepared regardless of the state of the economy.
The South African rental market is booming and experts predict it will only get better. So...are you ready to get started?
Take action towards building wealth through real estate investment today. This 10-minute survey will help you find out what kind of investor you are.
From there, you can book a call with us and get in touch with some of our students who can source you great deals!
If you’re ready to take the next step in your real estate investment journey, I would love to help. I have created a no-nonsense course that can help you go from beginner to profitable real estate investor in the next 90 days. Click HERE to find out more!
Interested in learning about how to invest in real estate with no money down? Grab your copy of my ebook How to Invest in Real Estate with No Money HERE! I am giving it away for FREE! In it, I reveal my proven strategy to building wealth through real estate investment without spending my own money. This strategy includes several of the income streams I created without paying any money down.
So- are you ready to start building wealth through real estate? If the answer is “yes,” then it’s time you followed these steps:
1. Register for my upcoming live stream
2. Download my ebook
3. Join our Program
4. Watch our previous Live Stream on the YouTube Channel.
5. Join our Facebook Community to plug into a mastermind of like-minded individuals.
6. Book a FREE Mentorship Call with me