If one had to invest R1000.00 monthly for 10 years at average interest annually?

[Mr_S]

How much would that be? by average income i mean, returns a NORMAL lol person would earn per year.

[Mr_S]

sorry didnt finish.. my thinking is that if one had to get at least R1.5 - R2 million by the end of that 10 years, that would be suffiecient to at least start investing in rental property. eg: (if i had R2 million, R500 000 deposit in a +/- R1 million would allow me to 1) see appreciation in porperty value and 2) receive positive cash-flow monthly, as the R500 000 would reduce repayments. Had an argument with my father abt this the other day, he thought i was crazy. would like to hear yr opinion

[#3]

Assuming you can earn a return of 5% over inflation every year, you will need to invest approximately R16 000 a month to have the equivalent of R1.5 million in 10 years. These are approximate figures. A whole lot of my friends are starting to work and I am in the process of starting a fund where: 1. We all chip in R150 000 2. Pay in R5000/month (still under discussion) 3. Leverage up 3 times 4. Buy property with specific investment criteria in the range of R350 000 to R1.4 mil. Mix of 25% commercial 75% residential. Advantage is that you diversify your holdings. Even though you can only afford 1 property, you get exposure to many. If 1 tenant gives huge issues not a massive problem. You also get exposure to different areas etc. Finally, investors try find tenants they know (or themselves for my new working buddies) to stay in properties, reducing tenant problems. Fund will be buy start buying in Nov 09. If you want to get involved in property I suggest buying into a fund, starting one or buying 2-3 cheaper properties. Diversification is the key (ps watch out for hidden costs like management, legal etc fees)

[Hibiscus]

The real yield of 5% you are referring to would obviously have reference the rate of appreciation in property (property inflation)?

[louisg]

By my calculations one would need an average annual return of 46.7% to achieve R1.5m. If one invests 2k then one will need a return of 34%. If one invests 5k then one will need a return of 17.4%. If one invests 10k then one will need a return of 4.4%.