I'm just playing around with a hypothetical investment here:

I purchase a 1 million rand House

- I pay a 20% cash deposit of R200 000
- The bank finances the remaining 80% at a fixed interes rate of 9% which amounts to R6000/month (800000 x .09 / 12)
- Capital repaiment is over 20 years = R3333/month (R80000/20/12)
- total Bond repayment = R9333/ month

- Rental income is R12 000/month
- I deduct 5% for repairs and 5% for vacancies monthly
- From the R10800 remaining income I deduct rates and taxes of R400/month and insurance of R300/month = R10100
- I then deduct the bond payment of R9333 from R10100

This investment is making a net profit of R767/month off a cash investment of R200 000, return is 4.6%. Am I better off investing in a REIT and not worry about the hassles of managing tenants? Do the numbers make sense?