Property owners bet on 2010 windfall
Owners are keeping their investment properties empty until the World Cup soccer tournament in 2010, said Seef Properties on Wednesday.
"I am increasingly being asked by owners to withhold their investment property to ensure availability during the World Cup," Jules Arnott of Seef Properties said in a statement.
Arnott said that Match, the Fifa-endorsed ticketing and accommodation booking agents for VIPs, sponsors and media to the World Cup, did not cater for the marketing of non-graded residential accommodation for the average fan.
He said there was "a huge demand" for beds predicted (65 000 in some cities on peak nights), especially in central areas with easy access to the Greenpoint stadium in Cape Town.
The number of beds available in graded accommodation establishments could probably not cater for the huge number of people expected into the country.
"It would certainly make sense to market your property for rent during the Football World Cup," Arnott said.
"It's a once in a lifetime opportunity and excluding peak holiday seasons when we accommodate our regular clients visiting from overseas, and paying on favourable currency rates, most homeowners will not see rental amounts like this being achieved, even in peak holiday seasons."
He said last month a home in Camps Bay had been listed that would be let out for R90 000 per day.
Arnott said property owners should take into account various considerations.
"If your investment property is already fully furnished and suitably equipped then it certainly makes good sense to market the property for the winter months at peak summer rates.
"However, and this is highly relevant, if this means turning down a longer term rental offer, the likelihood is you may be out of pocket in the long run," he said.
This could see the property standing vacant in the run-up to the tournament, and again afterwards during the notoriously quiet winter months.
"This will more than wipe out any expected windfalls from the tournament."
Arnott said his recommendation in this case would be to remain open-minded to both long and short term rental opportunities.
"If your investment property is currently unfurnished then it will almost certainly be prudent to keep it this way."
Arnott said to fully furnish and equip a one bed apartment cost in the region of R100,000.
"You need to ask yourself how long it will take to recoup this outlay.
"Furthermore, taking into account the current lack of unfurnished apartments and the oversupply of furnished apartments, I fully expect to see a glut of furnished properties standing empty later next year."
Arnott said an unfurnished property should stay that way, "albeit at a slightly lower but steady and predictable overall monthly rate."
Article from: www.iolproperty.co.za