To the editor
What will happen if we encourage the public to purchase property for letting out to tourist during this period? Will it have a positive or negative on the property industry in the long run?
I have compiled information for you regarding the general rental of units in SA for investors and also the change of the rental income and impact over the world cup period..
As a development investment rental company, our focus to date has been to deliver quality and well priced units for investors to bond, for the sole purpose of rental income to cover the bond, and enjoy capital growth In the product, while we strive to give the investor equity in the property from the start.
A typical property for the general investment rental market and with the world cup in mind, would be the THABANI development where we have recently completed and commenced sales and rentals, which lies
2 blocks from the Ellis Park stadium and standard bank arena.
A total of 64 units in a security complex, offering the investor a studio unit, a 1 bed, 2 bed, and a 3 bedroom option, ranging from R 188 000 to R 620 000, all incl.
The normal investment calculator will show the investor a return as attached, wit out taking the world cup into account. This is based on the studio unit.
If the investor wanted to rent this unit out for 30 days to world cup fans he could fetch a daily rate of R 1000, giving him an income of R 30 000. The unit would need to be cheaply furnished with second hand furniture
Which would cost no more than R 10 000 for the purpose of 2 guests. This would increase the investors income of R 20 000, and would then be able to continue to rent the apartment after the world cup, as furnished and enjoying a higher rental for the future, or re sell the furniture and recover the R 10 000 back.
The investor would bond the property with a local bank and actually pay nothing for the property to make the investment return happen, and simply enjoy capital growth over the years and put some rental income every month in the pocket.
To ensure the success of this investment, Development Services have mandated the Seeff Sandton office to market and source the managed tenant clientele, and have also employed Trafalgar properties to manage the complex as the sole managing agency, so the investor has peace of mind, while he sits back and counts the income. Seeff Sandton also have
an extensive marketing program designed to source the correct soccer fanatic from abroad for those investors who wish to capitalise over that period. THABANI also falls within the UDZ, so the investor also enjoys tax breaks for purchasing property for the sole purpose of supplying a dwelling for someone else to live in.
We also received the following comment from one of our subscribers in Vietnam regarding the National budget;
It is well established that housing/construction is an engine that can propel growth in the economy the linkages to hundreds of industries as well as employment to millions of workers seems to have not found any priority in the FMs budget. Overall, the budget doesnt address the needs of the housing industry at all.
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