Question:
I just sold an investment property and made a profit of approximately R200 000. I want to buy another investment property, but I’m not really sure when so the profit is currently sitting in my bank account.

What should I do with it in the meantime as I do not want to tie it up in a two or five year fixed investment?

Answer:
Firstly, make sure that you have made provision for capital gains tax.

If you want a short term investment you could look at the money market. Shop around though as rates vary from bank to bank. You could also consider a short term fixed deposit.

You need to look at the big picture. Do you have debt that you need to pay off? Is your retirement fund fully funded? It would really benefit you to chat to a financial advisor who can help you structure a long term investment strategy.

If you do want to buy another property it is a good strategy to wait a few more months. Experts are saying there will be a lot of distressed property sales in the next six months and there will be some bargains on the market especially in the R1-million region. Many people bought buy-to-let properties in this price range and are now struggling with the interest rate hikes.