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This age old topic has led to many arguments over the years and it has got me thinking about the issue due to recent problems with tenants in one of my properties. To cut a long story short they didn't pay rental for 2 months and I thought I was going to be in for a long drawn out battle to evict them and despite getting plenty of legal advice I was resigned to the fact there is no short cut in the eviction process! I tried to reason with them in order to find a solution and obviously to hopefully get the overdue rental paid but last Sunday evening I got a text from them to say they'd moved out and then when I went to the property saw they had left it in a really disgusting state so this week I've been thinking why do I need all this stress especially now that I'm coming up to retirement age later this year? Right now my priority is to fix the property up in order to rent it out again or put it on the market and sell it and I've been going through the sums this week to see where my best options lie.

Total equity in the props I've got would be around R5.2m so with a 15-20% growth per year (it is still achievable isn't it? ) that would give an annual return of about R750k to R1m+ so what am I waiting for? Talking to a few agents also this week and their figs for the props I have show an average price growth of about 10% per year so the decision needs to be made in the coming months do I opt for the route of no tenant stress, no maintenance issues, no damaging of property, etc or the easier route of getting invested in the numerous products available with a lot less work involved?

Anybody else in a similar scenario or maybe you guys have your own views on the subject? Would be good to hear opinions.
 

I got out of property in favor of the stock market, and I'm very happy I did.

I think to do rentals well you have to take an educated and calculated approach to it. The pros have specific formulas and acceptable rates for cash on cash returns and won't touch a property that doesn't meet their targets, and also know when to jump on a deal. They work things out like cash on cash returns, and use the 70% rule for flipping houses. Take a look at the biggerpockets forum if you want to learn more about this.

The rest of us, like me in the past, used to buy something we kind of liked and kind of had a reasonable idea that we could rent out. That's a terrible strategy and I can attest for the fact that's it's not a good way to build wealth.

Then of course there's the risk factors and the amount of work going in to properties which are quite significant in both cases.

I think it's far simpler just buying as many shares of my global ETF as possible and just ignoring everything else. I don't have to have things fixed, chase after rent, look for tenants or any of that other work. I don't even have to pay taxes unless I decide to sell.

The downside is the lack of cashflow. You can get far more cash for your money with renting than collecting dividends.

Thanks guys and pretty much as I thought and I'm definitely going to start offloading property and start investing a bit smarter with hopefully less stress involved! I'm sure a 15-20% annual return is achievable so any ideas on that? Are ETF's the only answer?

Yozzi - I think there are a few matters you need to consider whilst or before you build up a portfolio. Time - if you have plenty of time whilst the market is open then you can get onto your brokers platform and watch price movements frequently during the day. If time is not on your side than select an ETF that gives reasonable returns and shows a price growth over 5 years or more. This at start of your investing in the stock exchange is a realatively safe way to start. The next big step is reading up on companies - if you can use your broker platform and can create a watchlist then do so and add companies that you are considering investing in. On my brokers platform they have a statutory section which is a bit like a fact sheet listing all directors what the companies purpose is all about what subsidiaries they control, what dividends they have paid over the years. It may also show you the companies high/low price for the last 12 months - this could indicate where the company is in a price cycle.
Once you have checked all the companies on your watch list then select 3 -5 of the better companies invest in them. Also read the companies sens bulletins to see how they are operating
Its also important (well it is to me anyway) as to who the competitors are in the sector that your selected companies operate in and whether the company you are selecting is the best in that sector

Have fun learning