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Tuesday Nov 03, 2020

Holiday letting opportunity on Thesen's Island

The holiday season is fast approaching, which means that the holiday-letting market is about to warm up along with the weather. While investors might not see their usual returns this holiday season owing to the travel restrictions, they might be able to find good investment opportunities within the current market.

Travel restrictions will limit the amount of tourist activity this season; but, as things stand, foreigners will be granted access to South Africa if they are travelling for business purposes or if they intend to stay for a minimum three-month period. According to Adrian Goslett, Regional Director and CEO of RE/MAX of Southern Africa, this means that investors who purchase in the right areas can still expect returns this season.

"Most areas are still in a buyer's market, which means that real estate investors have room to negotiate on price. If they get into the market now, they stand to make higher returns when tourist activity returns to normal post-pandemic," Goslett explains.

Those seeking holiday-letting opportunities are advised to consider the coastal regions, as these tend to be more popular among tourists. According to Airbnb, areas along the Western Cape dominate the top 10 most welcoming destinations in South Africa, with Knysna claiming one of the top ten spots.

A unique opportunity in Thesen Islands has arisen for investors who are looking to purchase within this area, where holiday letting averages around R8 000 per day. An immaculate 5-bedroom apartment on the world-renowned Thesen Islands has just become available. "There are only two this size and these seldom come on the market. Dry Mill Apartment block really is the flagship of the apartments in the area. Unfurnished, the owner of this property will be able to charge around R30,000 per month on a long-term basis. On a short-term basis, the owner would be able to charge an all-inclusive rate of R7 000 per day during low season and as much as R8 000 - R9 000 per day during the peak seasons," explains local area expert, Sue Abernethy of RE/MAX Coastal.

The property is currently on the market for R12 600 000. Levies amount to R8 500 and rates and taxes will set owners back by R5 000. Bond repayments on the full purchase price taken over a 30-year loan at the current interest rate of 7% amounts to R 83 828. If the homeowner is able to rent out the property at R8 000 per day for even just 15 days of the month, they stand make a net profit of R22 672 per month. 

"Typically, with these sorts of purchases, it is seldom that the buyer will take out a home loan to the full value of the property. Many buyers within this price bracket will either purchase cash or put down a sizeable deposit. This helps them generate even greater returns on their investment," explains Goslett.

Those who are interested to learn more about this unique opportunity can contact Sue Abernethy (sue-AT-remaxcoastal.co-DOT-za) or view the listing on www.remaxcoastal.co.za. For more real estate advice or to get in touch with a real estate professional from the world's number one brand in real estate, visit www.remax.co.za.

    
 

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