South African Property
Investment Calculator
Analyse residential, Airbnb, storage and commercial property investments in minutes. Calculate monthly cash flow, yields, ROI, and long-term wealth creation.
Bond Finance Analysis
Investment Projections Calculator
Property Details
Financing / Own Capital
Negative means below prime
Income & Operations
Tax Benefits (Sec 13quin)
Typically 55% of purchase price
Standard is 5% over 20 years
Max Annual Allowance
R 3 836
Data Summary
Purchase Price
R 139 500
Transfer Costs
R 13 619
Bond Reg Costs
R 12 571
Total Capital Req
R 165 690
Gross Property Yield
13.49%
Net Property Yield
11.24%
Investor Return Real Return
7.43%
Monthly Net Cash Flow
R 295
Annual Net Cash Flow
R 3 536
Proj. 5-Year Return
20.20%
Proj. 10-Year Return
25.00%
Sec 13quin Savings (Yr 1)
R 1 036
Tax saved
WHY ARE THESE NUMBERS DIFFERENT?
Developer brochures usually advertise Gross Yield or Net Property Yield. Investor Return is the more conservative measure of actual investment performance.
Gross Yield
Measures rental income before any expenses are deducted, calculated against the purchase price only.
Net Property Yield
Measures true property performance after operating expenses (levies, rates, collection fees) are deducted.
Investor Return
Measures your actual return after factoring in all acquisition costs (transfer, bond registration) and financing assumptions.
| Metric | Year 1 | Year 2 | Year 3 | Year 4 | Year 5 | Year 6 | Year 7 | Year 8 | Year 9 | Year 10 |
|---|---|---|---|---|---|---|---|---|---|---|
| Rental income | R 18 816 | R 19 945 | R 21 142 | R 22 410 | R 23 755 | R 25 180 | R 26 691 | R 28 292 | R 29 990 | R 31 789 |
| Less: Operating costs | (R 3 131) | (R 3 318) | (R 3 517) | (R 3 729) | (R 3 952) | (R 4 189) | (R 4 441) | (R 4 707) | (R 4 990) | (R 5 289) |
| - Body Corporate levies | (R 1 117) | (R 1 184) | (R 1 255) | (R 1 330) | (R 1 410) | (R 1 494) | (R 1 584) | (R 1 679) | (R 1 780) | (R 1 887) |
| - Rates and taxes | (R 603) | (R 639) | (R 677) | (R 718) | (R 761) | (R 806) | (R 855) | (R 906) | (R 961) | (R 1 018) |
| - Rental collection fees | (R 1 411) | (R 1 496) | (R 1 586) | (R 1 681) | (R 1 782) | (R 1 889) | (R 2 002) | (R 2 122) | (R 2 249) | (R 2 384) |
| Operating profit | R 15 685 | R 16 627 | R 17 624 | R 18 682 | R 19 803 | R 20 991 | R 22 250 | R 23 585 | R 25 000 | R 26 500 |
| Net Yield (on Purchase Price) | 11.24% | 11.92% | 12.63% | 13.39% | 14.20% | 15.05% | 15.95% | 16.91% | 17.92% | 19.00% |
| Total ROI (Yield + Growth) | 17.24% | 17.92% | 18.63% | 19.39% | 20.20% | 21.05% | 21.95% | 22.91% | 23.92% | 25.00% |
| Less: Finance cost | (R 10 182) | (R 10 014) | (R 9 829) | (R 9 623) | (R 9 394) | (R 9 140) | (R 8 858) | (R 8 545) | (R 8 197) | (R 7 811) |
| Net profit before tax | R 5 504 | R 6 612 | R 7 795 | R 9 059 | R 10 409 | R 11 851 | R 13 392 | R 15 041 | R 16 803 | R 18 689 |
| Less taxation payable @ 27% | (R 450) | (R 750) | (R 1 069) | (R 1 410) | (R 1 775) | (R 2 164) | (R 2 580) | (R 3 025) | (R 3 501) | (R 4 010) |
| Taxable income | R 5 504 | R 6 612 | R 7 795 | R 9 059 | R 10 409 | R 11 851 | R 13 392 | R 15 041 | R 16 803 | R 18 689 |
| Less: s13quin allowance | (R 3 836) | (R 3 836) | (R 3 836) | (R 3 836) | (R 3 836) | (R 3 836) | (R 3 836) | (R 3 836) | (R 3 836) | (R 3 836) |
| Net profit after tax | R 5 054 | R 5 863 | R 6 726 | R 7 649 | R 8 634 | R 9 687 | R 10 812 | R 12 015 | R 13 302 | R 14 679 |
| ROI on own capital | 7.43% | 8.62% | 9.89% | 11.24% | 12.69% | 14.24% | 15.89% | 17.66% | 19.55% | 21.57% |
Notes:
Average bond registration cost: In most investor scenarios, the investor will buy several units, adding up to a total value. One bond can be registered over all units together, which results in a much reduced bond cost per R1 investment. Such average bond cost was used, with the assumption of a minimum loan of R 750,000. The higher the loan, the lower the average bond cost will be.
Inflation: It is assumed that the effect of inflation is counteracted by the capital growth on the fixed property, thus the ROI is not calculated on inflation adjusted capital values as there is no opportunity cost - i.e. as the inflationary increase on capital will be realised and paid to the investor upon sale of the property, there is no opportunity cost of capital for the investor and as such ROI should not calculated on inflation-adjusted capital values.
Commercial bonds: It is still to be determined what the exact loan structure will be. In practice, most banks currently provide loans over commercial properties in 5-year intervals, with a balloon payment at the end of the 5-year period which can be refinanced for a further 5-year period. As such it was assumed that the finance period would be 20 years as for residential bonds, but this may vary in practice.
Cash Investor Analysis
Investment Projections for Cash Buyers
Property Details
Income & Operations
Tax Benefits (Sec 13quin)
Typically 55% of purchase price
Standard is 5% over 20 years
Max Annual Allowance
R 3 836
Data Summary
Purchase Price
R 139 500
Transfer Costs
R 13 619
Total Capital Req
R 153 119
Gross Property Yield
13.49%
Net Property Yield
11.24%
Investor Return Real Return
8.15%
Monthly Net Cash Flow
R 1 041
Annual Net Cash Flow
R 12 486
Proj. 5-Year Return
20.20%
Proj. 10-Year Return
25.00%
Sec 13quin Savings (Yr 1)
R 1 036
Tax saved
WHY ARE THESE NUMBERS DIFFERENT?
Developer brochures usually advertise Gross Yield or Net Property Yield. Investor Return is the more conservative measure of actual investment performance.
Gross Yield
Measures rental income before any expenses are deducted, calculated against the selected returns base.
Net Property Yield
Measures true property performance after operating expenses (levies, rates, collection fees) are deducted.
Investor Return
Measures your actual return after factoring in all acquisition costs (transfer costs) and taxation.
| Metric | Year 1 | Year 2 | Year 3 | Year 4 | Year 5 | Year 6 | Year 7 | Year 8 | Year 9 | Year 10 |
|---|---|---|---|---|---|---|---|---|---|---|
| Rental income | R 18 816 | R 19 945 | R 21 142 | R 22 410 | R 23 755 | R 25 180 | R 26 691 | R 28 292 | R 29 990 | R 31 789 |
| Less: Operating costs | (R 3 131) | (R 3 318) | (R 3 517) | (R 3 729) | (R 3 952) | (R 4 189) | (R 4 441) | (R 4 707) | (R 4 990) | (R 5 289) |
| - Body Corporate levies | (R 1 117) | (R 1 184) | (R 1 255) | (R 1 330) | (R 1 410) | (R 1 494) | (R 1 584) | (R 1 679) | (R 1 780) | (R 1 887) |
| - Rates and taxes | (R 603) | (R 639) | (R 677) | (R 718) | (R 761) | (R 806) | (R 855) | (R 906) | (R 961) | (R 1 018) |
| - Rental collection fees | (R 1 411) | (R 1 496) | (R 1 586) | (R 1 681) | (R 1 782) | (R 1 889) | (R 2 002) | (R 2 122) | (R 2 249) | (R 2 384) |
| Operating profit | R 15 685 | R 16 627 | R 17 624 | R 18 682 | R 19 803 | R 20 991 | R 22 250 | R 23 585 | R 25 000 | R 26 500 |
| Net Yield (on Purchase Price) | 11.24% | 11.92% | 12.63% | 13.39% | 14.20% | 15.05% | 15.95% | 16.91% | 17.92% | 19.00% |
| Total ROI (Yield + Growth) | 17.24% | 17.92% | 18.63% | 19.39% | 20.20% | 21.05% | 21.95% | 22.91% | 23.92% | 25.00% |
| Net profit before tax | R 15 685 | R 16 627 | R 17 624 | R 18 682 | R 19 803 | R 20 991 | R 22 250 | R 23 585 | R 25 000 | R 26 500 |
| Less taxation payable @ 27% | (R 3 199) | (R 3 453) | (R 3 723) | (R 4 008) | (R 4 311) | (R 4 632) | (R 4 972) | (R 5 332) | (R 5 714) | (R 6 119) |
| Taxable income | R 15 685 | R 16 627 | R 17 624 | R 18 682 | R 19 803 | R 20 991 | R 22 250 | R 23 585 | R 25 000 | R 26 500 |
| Less: s13quin allowance | (R 3 836) | (R 3 836) | (R 3 836) | (R 3 836) | (R 3 836) | (R 3 836) | (R 3 836) | (R 3 836) | (R 3 836) | (R 3 836) |
| Net profit after tax | R 12 486 | R 13 173 | R 13 901 | R 14 673 | R 15 492 | R 16 359 | R 17 278 | R 18 253 | R 19 286 | R 20 381 |
| ROI on own capital | 8.15% | 8.60% | 9.08% | 9.58% | 10.12% | 10.68% | 11.28% | 11.92% | 12.60% | 13.31% |
Notes:
Cash Purchase: This calculator assumes a 100% cash purchase with no bond financing involved. All returns are calculated based on the total capital required (Purchase Price + Transfer Costs) or the base purchase price, depending on your selection.
Inflation: It is assumed that the effect of inflation is counteracted by the capital growth on the fixed property, thus the ROI is not calculated on inflation adjusted capital values as there is no opportunity cost - i.e. as the inflationary increase on capital will be realised and paid to the investor upon sale of the property, there is no opportunity cost of capital for the investor and as such ROI should not calculated on inflation-adjusted capital values.
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