It’s been a bumper holiday season for the owners of rental homes on the “Riviera” of Cape Town – the ribbon of prime coastal property that stretches from the V&A Waterfront on the north shore of Table Mountain all the way down the west side of the Cape Peninsula to Hout Bay.
That’s the word from Charl and Adél Louw, principals of the Chas Everitt International franchise on the Atlantic Seaboard, who note: “Daily rentals of R5000 to R6000 for a two- to three-bedroom apartment in Bantry Bay or Clifton are easily obtained, while a spacious eight-bedroom multilevel villa with every conceivable mod-con and panoramic views that we have on our books achieves as much as R150 000 a day in season.”
These rocketing rentals are being driven by high demand from both foreigners and locals seeking to spend their downtime in South Africa’s tourist capital, confirms Colleen Ricketts, rental specialist at Chas Everitt International Atlantic Seaboard. “Unsurprisingly, most landlords want to capitalize on the holiday season, making their properties available for short-term tenancies at daily rates from the beginning of December to the end of February, and, thereafter, renting them out on a nine or 10-month ‘winter lease’”.
“This ensures maximum profitability for the property owner, but of course also makes things difficult for those seeking long-term leases in the suburbs most coveted by holidaymakers: Camps Bay, Clifton, Bantry Bay, Bakoven, Fresnaye and Llandudno. And when annual leases can be found, they usually come at a premium.”
For example, a renovated three-bedroom freestanding home in Camps Bay (not necessarily with views) will fetch between R35 000 and R45 000 a month on 12-month lease, while a three-bedroom sectional-title property situated on or above Victoria Road in Clifton will go for R55 000 to R65 000 a month, with rates and levies on top of that, she says.
Drop down into the elite coastal enclave of Llandudno and rentals rise even further. “High-end properties in this suburb can command over R100 000 per month, although these are predominantly corporate lets,” says Janene Loxton, rental specialist at Chas Everitt International Hout Bay.
Around the headland, in the predominantly residential community of Hout Bay, rentals have increased by up to 25% over the past 18 months, she notes. “While we have no difficulty securing tenants for short lets over the holiday season, the greater demand in Hout Bay is definitely for long-term leases,” she says, adding that new listings can attract up to 30 enquiries within the first 24 hours and, if correctly priced, will be let within a day or two.
“With the entry-level price for a three-bedroom home in Hout Bay currently at around R3m, first-time buyers struggle to gain a foothold on the property ladder and are compelled to rent instead,” Loxton explains. “Also, the steady stream of of Joburg semigrants, who favour the suburb for its good schools (which include the International School), relaxed lifestyle and proximity to the city, has created a severe shortage of rental stock, thus driving up prices even further.”
She says Hout Bay landlords are currently making a handsome return on their property investments. “A R1,995m apartment will achieve a monthly rental of up to R20 000, a R3m home can fetch R30 000 a month, and a R6m house at least R45 000 a month.”
Added to these profits is the ease of letting one’s property – be it short or long term – through an accredited rental agent. “On a Managed Lease arrangement, we handle everything on the landlord’s behalf, from finding the tenant, conducting the necessary background and credit checks and drafting the lease to collecting the deposit and rent, performing the inventory checks and managing repairs,” says Loxton.
Her advice for buy-to- let investors seeking to profit along the Atlantic Seaboard: “The sum of the parts remains greater than the whole. For maximum returns, rather buy two smaller properties than a single large one.”