PROPERTY: Three Popular Cape Town Suburbs for Holiday Apartment Investments
Recent Western Cape Business News
IF YOU want to invest in a holiday apartment and capitalise on rental income when you are not using the property, then you should be sure to invest in the right suburbs, says Jason Paans, Sales Manager for the Coastal Property Group.
It is now widely accepted that you cannot go wrong with Cape Town property with the Atlantic Seaboard and City Bowl undoubtedly topping the list for holiday makers. During season, you are unlikely to find a booking anywhere as accommodation tends to be booked up months in advance, he says.
While areas such as Clifton, Bantry Bay and Camps Bay rank as the most sought-after when it comes to holiday bookings, apartment prices here now range well into the upper millions and it is beyond the reach of most buyers. All is not lost though as Paans says there are other suburbs that are just as popular for rentals where you can still find an investment apartment for under R3m.
Sea Point for example enjoys an excellent location with quick access to the Blue-Flag beaches of Clifton and Camps Bay. It has no shortage of street cafés, diners and bars with a whole host of establishments lining Main Road. You are also just a short walk from the beautiful palm-tree lined Sea Point Promenade. Here, there is also a large lawned area for relaxing or picnicking along with an outdoor gymnasium and a boardwalk that stretches along the sea all the way to the Waterfront.
The suburb offers a substantial selection of apartment complexes with a mix of older and newly renovated apartments which can be located anywhere from higher up to close to Main Road or close to the promenade. Average selling prices around R1.8m-R3.8m on average depending on the size, finishes and location. The closer you are to the beach, the more expensive the apartments are and a beach front location, which rarely comes onto the market, can easily range to R20m.
Average apartment rental rates for long-term residential purposes are around R14 000-R28 000/month while short-term daily rates in season are around R1 000-R3 000/day.
The second popular suburb for holiday rentals, is neighbouring Green Point which also benefits from its proximity to the CBD and Waterfront as well as the attractions of the Atlantic Seaboard. It is a smaller suburb with fewer apartment complexes and prices are generally a bit higher. Expect to pay around R2m-R4.8m on average although new developments and top end units range upwards of R9m, especially with views.
Rental rates are around R16 000-R26 000/month for long-term residential purposes and around R1 800-R3 800/day during the holiday season.
The third hot spot for investment apartments, is the CBD, an area which also benefits from its excellent proximity to the Waterfront and Atlantic Seaboard. It is conveniently located for business visitors and to the Cape Town International Convention Centre and Cape Town Stadium which hosts high demand events such music concerns and sports such as the Rugby 7s tournament.
The CBD offers excellent facilities with a fabulous selection of attractions includes coffee shops, restaurants, cafés, bars and clubs along with retail and other facilities located across the city, but concentrated in popular high streets such as Kloof, Long and Bree Streets.
There are plenty of apartment complexes in the city, some with mixed-use facilities. Prices range from around R1.4m-R2.8m on average, but can go much higher for a hotel suite or top end unit with views. Monthly rental rates average at about R15 000-R20 000/month while daily rates are around R800-R2 800/day.
Paans cautions though that investors should be careful about hedging their bets on short-term rental income only. The short-term rental sector is highly seasonal and influenced by the economy. During the 2007/8 global economic crisis, tourism suffered and bookings dropped significantly, so balance your expectations, he concludes.
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