Property profitability. Let's talk about the numbers that you can use to determine property profitability.
0.1. Income and expenses. You need to know all the numbers including rates, taxes, levies, insurance as well as rental income.
1. Return on Investment (ROI) - What is your annual return compared to your total cash invested? Aim for at least 12% ROI.
2. Capitalization Rate (Cap Rate) - What is your net operating income as a percentage of the purchase price? Target a minimum 10% cap rate.
3. 1% Rental Factor - This rule states that your monthly post-expense rental income should be at least 1% of the purchase price. For example, if you buy a property for R400,000, you need R4,000 monthly income AFTER deducting rates, taxes, and other costs. HOWEVER YOUR BOND IS EXCLUDED FROM THIS CALCULATION. Calculation however it should give you minimum shortfall.
These calculations give you a good starting point to evaluate the property's current profitability. But don't forget to also consider long-term factors like capital appreciation, tax benefits, steady tenant base, and property maintenance over time.
Personally I like the last one. And combining this with tax breaks such as section 13 sex and like there's a like can be profitable.
Are you on an entrepreneurial journey?
Our Founder and CEO, @ThatNaledi, will speak at the @UCTGSB on 05 December. She will share insight on ‘Entrepreneurship in Practice’.
We believe in the power of entrepreneurship in SA, in building a stronger economy.
#CherryRepbublik
Up next at the #CGCSASUMMIT2023 is Prof. Suzan Oelofse for an enlightening talk on ‘Rethinking Packaging for Circular and Sustainable Food Supply Chains of the Future’.
She is the Principal Researcher in the Sustainability, Economics and Waste Research Group @CSIR
What does the future of packaging look like?
Is just not sure of what the future looks like. Packaging and overpacking is a problem. During Covid-19 pandemic there was a shift for more packaging. - Prof Oelofse.
#CGCSASUMMIT2023#CreatingConnections#BuildingBridges#Together
Packaging contributes to #foodwaste. Plastic does prolong shelf life for certain foods, some of the positive uses. However, packaging that is difficult to empty, too big or small and misunderstanding of best before date, contributes to food waste - Prof Oelofse
#CGCSASUMMIT2023
L'Oréal invest in Research and Innovation and all products are based on science.
We have a lab in Woodmead, here in South Africa to help solve new needs for the unique SA needs. - Serge Sacre
#CGCSASUMMIT2023#CreatingConnections#BuildingBridges#Together
They are experiencing dynamic growth in both physical stores and e-commerce.
All divisions are growing with the beauty industry being a dynamic industry.
The company is growing in emerging markets.
#CGCSASUMMIT2023#CreatingConnections#BuildingBridges#Together
We have many executives that are experiencing the magpie syndrome, these are some of the symptoms:
- Obsessed with shiny things
- Not afraid
- Consider themselves as pioneers
- Stuck in the nest of legacy.
It becomes everything for everyone. Weighing down the business operations