In the area 2 – Cape Peninsula

Buy to rent investors, said Steward, often look to the better areas for their investments in the belief that the tenants they will attract there will be more reliable than those in the less affluent areas.

“This is, however, quite frequently not the case – and right now investors in most cases get a better return on properties in the “affordable” areas than they do in the more expensive areas.”

Apartments in Lower Kenilworth and Lower Claremont, said Steward, are particularly good investment precincts at the moment – and investors are becoming aware of this.

APKF has a team made up of Carmen Maher and Vuyisa Qabaka which from 1st June to 30th September sold 18 flats, almost all in these areas.

Qabaka said recently that most of these were priced from R300 000 to R500 000 and the rents achieved on them tend to be from R2 900 to R4 600 per month.

“This,” he said, “means that we can offer investors returns from 8,5% to 11% - which, of course, is 20 or 30% above the average rate for residential property at Cape Town.”

Qabaka added, however, that although such properties will increase rapidly in value, annual rent escalations in these areas tend to be limited to 5 or 6%.

Article by: www.anneporter.co.za