How to cash in on property in 2010
are set to make easy bucks letting out properties to soccer fans. Sepp Blatter,
estate agents give the low-down.
Football for many people is about the glory of the sport but when South Africa won the bid to host the FIFA 2010 Soccer World Cup, it opened a whole lot of economic opportunities for citizens to explore.
A year to go before the event, to be held in June 2010, news has emerged that the country is facing serious accommodation shortages for the over 400 000 foreign soccer fans expected to race our shores.
The big question on every citizen's lips is likely to be: where are these people going to be accommodated? We know that MATCH, responsible for finding accommodation for FIFA VIPs, sponsors and the international media has been focusing on working with graded accommodation to house the delegates. All of this is about to change and ordinary home owners will get a chance to rake in extra cash by letting out their homes for the duration of the soccer event.
Speaking to Moneyweb (JSE: MNY) FIFA president, Sepp Blatter said his biggest worry at the moment is that there could be a shortage of accommodation for the 450 000 foreign visitors expected next year. He added that the shortage will be particularly acute in Bloemfontein.
In an interview with Shine 2010 earlier this year, MATCH executive chairman, Jaime Byrom said according to MATCH requirements 55 000 "units" are considered adequate capacity for an estimated 450 000 soccer fans and FIFA delegation expected to visit South Africa in 2010.
He mentioned concerns about the accommodation shortage, saying MATCH could look into private housing and universities so the target of 55 000 is met by 2010.
Some property experts may have known about the looming housing glitch for a while and until now, MATCH has shown very little interest to smaller short-let landlords who have made inquiries about adding their stock to the official pool.
Now, a number of operators have unveiled plans outside the MATCH arrangements for what could be a significant income-generator for ordinary home owners who want to earn extra pocket money by handing over their homes to soccer fans.
Seeff Properties chairman, Samuel Seeff and football icon, Gary Bailey, were among the first out of the starting blocks in a joint venture aimed at finding fans for home-owners and vice versa.
Realestateweb.co.za visitors have been asking questions including: how one actually participates in this venture; how much money they can expect to make for the 30-day period or whatever time the property is let out - and how Seeff will ensure valuable assets are protected. For example, one visitor asked: If a home owner were to list their home for short term letting, what experience does Seeff has for vetting short term tenants from other countries and what benefits a home owner derives by paying some of their income to Seeff.
In response to these questions, Seeff said it will require all prospective tenants to pay a damage or security deposit and Seeff will carry out initial and outgoing inspections - and ensure that the inventory is checked at the end of the lease prior to refunding any deposits.
Homeowners need to ensure that they have household insurance and personal liability insurance for the duration of the rental. Seeff said its agents have experience in these types of rentals.
Emarie Campbell, general manager at Seeff Properties told Realestateweb.co.za that agents charge home owners anything between 20% and 25%, depending on the service options they choose.
The rentals being achieved are expected to be in the range off 30% and 40% higher than normal rentals achieved for prime seasons over the Christmas period. Deposits for renting these properties will range from 20% to 40% of the total fee depending on the type of accommodation, adds Campbell.
Shana Kagan, who heads up Channel Estates - an established specialist in short-term letting in the Atlantic Seaboard area - said her agency is looking at finding opportunities for its clients as well.
Kagan specialises in privately-owned apartments which are mainly let to visitors and are core investment properties. She said the 2010 accommodation shortage provides an opportunity for property investors to make money from the 30-day period in June 2010.
Currently, a two bedroom up-market apartment in high season on the Atlantic Seaboard, Cape Town, can be priced from between R1 200 to R1 500 per day.
Dino Joannu, director of Just Letting, Western Cape, says Just Letting has entered into an arrangement with a company offering exposure to targeted overseas markets.
Landlords using Just Letting services will therefore have access to international markets. The properties will be paid for upfront and agents will earn less than 6% provided that the landlord supplies limited cleaning services to their tenants, said Joannu.
Joannu says landlords will be paid upfront before the tenant moves into the property, however, 30% will be retained for 14 days to ensure that all services have been rendered accordingly and this allows visitor right to recourse if they did not get what was promised by the landlord during the signing of the lease.
Home owner tips to cash in on 2010: Joannu
Article by: Denise Mhlanga - www.realestateweb.co.za