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Words: Candice Botha | Image: Supplied

Investing in property is considered one of the best ways to increase your wealth. Savvy investors in KwaZulu-Natal have recently started to invest in vacant land in newly launched estates and have seen excellent growth on their investments.

“The first time we saw really incredible returns on land was in Simbithi Eco-Estate,” says Stefan Botha of specialist property marketing firm Rainmaker Marketing. “People who bought plots in 2004 for about R300,000 were about to sell for R1,2m in 2014, quadrupling their money in a decade.”

Devon de Lange, sales director of Dwell Properties based in Elaleni Coastal Forest Estate, says that although Simbithi Eco-Estate was exceptional, there are still plenty of opportunities to see excellent returns on your investment if you’re able to get in on the right estate at the right price. “We’re seeing upwards of 50% growth on land values at Elaleni with nothing but the roads developed. It’s expected to rise by another 20% when the amenities go in later this year.”

The structure of launch investments is beneficial to investors, with many developers expecting buyers to pay a deposit with no monthly outlay for a bond repayment or levies until transfer occurs later. This means that buyers are realising enormous capital appreciation with very little outlay, allowing them to make money when selling on the land at a later date.

Getting finance for this kind of purchase can prove tricky, however. “The banks don’t consider land to be the soundest investment and they will often only approve 70% of the purchase price, meaning the buyer will need to fund the other 30% themselves, leaving speculation here open to a smaller pool of buyers,” says Botha.

De Lange also notes that this kind of appreciation is not the norm in every estate in the province. “The North Coast has seen a particular boom and choosing the right estate with trustworthy developers is key to seeing your investment grow. Choosing the right piece of land which will be attractive to future buyers when you are ready to sell is also essential. Privacy, views and proximity to protected green areas are desirable features.”

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