Purchase a 2nd Property or to Wait - Durban, South Africa
Hi there,
I have no doubt that this is a silly question, and I have already an idea of what the answer is, but I thought I would ask for some advice from experienced real estate investors.
I am 4 months into owning my first investment property which has increased by 40% in value due to me having bought the property off-plan a year ago and the low interest rates in South Africa which have helped the properties in Durban increase significantly.
I am now looking to refinance my property and then add an addition amount that would allow me to put down a substantial deposit on a second investment property.
The rental from my current property exceeds the monthly costs and produces a profit of around 10% of the rental income. If the tenant in this property were to cancel their lease, I would be able to cover the expenses myself from my salary.
Being 28 and open to the ideas of taking more risk than someone more mature than myself, would you advise that I purchase a second property similar to the one I currently own, or go for a smaller property?
I would be able to cover the costs of 1 property, but if both had similar monthly costs, and both sat untenanted for an extended period, I would quickly find myself in a pickle, financially.
Any advice of comments would be greatly appreciated.
Regards,
Ben