STAFF WRITER
In the property world, which has fast become one global village, making the right asset pick remains every property investor’s priority. How many of us have invested in properties for no other reason than affordability? You may have picked on an asset for hedging purposes. Whilst these remain critical variants in decision-making, legendary investors have always gone for gross rental yield.
Simply put, gross rental yield is the total gross rent collected from a property in a calendar year compared to the property market value or purchase price. Gross rental yield is expressed as a percentage, calculated as gross annual rent divided by the property’s current market value.
A deep dive into the global property markets would tell you that at an average of 9.06%, South Africa has one of the best gross rental yields in Africa. In South Africa, it only takes a property investor an average of 11 years to recoup the full market value of their property investment.
In the Middle East, Qatar leads the pack with a gross rental yield of 8.43%. For Europe, Lithuania (7.81%) and Ukraine (7.43%) are the top two destinations for global property investors on account of their attractive gross rental yields. In Latin America, Panama commands a fair rental yield of 6.68%, whilst the United States leads North America with a gross rental yield of 6.12% respectively. Crossing over to Asia, Georgia enjoys a spectacular gross rental yield rating of 10.73%, making it a world contender. (Source: Globalpropertyguide.com)
It is critical to note that the statistics shared above are regional averages. Therefore, with the right property advisors, one can identify blue ocean locations with even higher rental yields in these regions for a more lucrative return on investment (ROI).
Contextualizing the issue to the Zimbabwean property market, astute investors are those who have managed to go beyond gross rental yields in their property ratings ahead of the acquisition. Salient aspects such as potential oversupply of properties, property demand forecasts, capital gains and income tax laws, tenant and landlord legislation, property rights, legitimacy of the property, the long-term appeal of a property or development to investors, and affordability, as mentioned earlier, all add up to the decision-making process of a nimble footed property investor.
It is this volatile and complex maze that creates unique challenges and opportunities for property investors across the globe. The million-dollar question is, can property investors do it alone?
Prophetically, in Mark 12 verse 17 in the holy bible, Jesus amazed his followers when he said to them, “Give to Caesar what belongs to Caesar, and give to God what belongs to God”. In relation to this metaphor, it remains critical for property consultants to take their position in guiding property investors toward making rewarding property investment decisions. In fact, your property investment maze is the property consultant’s everyday lane.
Did you know that there are property investment options with a gross rental yield of up to 17% in Zimbabwe? Have you ever gained insights into the future property values of Zimbabwe’s sprouting peri-urban locations? Are you aware of the market value of your current property portfolio, and what investment opportunities it can unlock for you? The above questions are the first steps toward a rewarding investment decision.
In summary, as the adage goes, “The best time to ride an elephant is when it is lying low”. The cost of engaging a professional property consultant has always been a fraction of the potential risks of making uninformed property investment decisions. Zimbabwe remains a fertile ground for rewarding property investments.