TIS THE SEASON FOR EARNINGS

TIS THE SEASON FOR EARNINGS

Category Property News

Cape Town is regarded as one of the places to be over the December and January holiday season and while tourists will be soaking up all the city has to offer holiday property owners will be raking in the cash.

Depending on where in the city or province they are, owners of short let investment properties can earn thousands per night. In some areas, luxury homes can even generate more than R100000 a day.

The tourism industry is one of the most important aspects in Cape Town's economy and Chad Shapiro, an area specialist for Lew Geffen Sotheby's International Realty on the Atlantic seaboard and City Bowl, says it also "significantly" boosts the residential market as short term letting increases a property's income value. This, therefore, justifies higher purchase prices. "If a property features well in the short term sector, it will generate a lot more buyer interest as it has a greater potential to generate income."

Short term let properties offer more value for money than hotels, especially for those holidaying for longer periods. Self-catering accommodation appeals to travelers who are visiting with families or on tighter budgets, he says. Cape Town is always a holiday hot spot for tourists, says Corinne Ras of Knight Frank Letting on the Atlantic seaboard. "The good weather, food and weak currency for foreign tourists makes it a worthy destination."

Most holiday homes in the city have been purchased primarily for holiday lets as owners know the tourism appeal of the area. While a few locals who let their properties over the peak season December and January often head abroad or to a holiday home in another province, she says most have a secondary home specifically for holiday renting purposes and are either residents of another province or country.

With the water crisis over, Ross Levin, managing director for Seeff Atlantic Seaboard and City Bowl, says the city is expecting an increase in tourism and holidaymakers flocking to the "beautiful beaches and winelands of the Cape again this summer".

"The quality holiday and lifestyle mean you can enjoy restaurants and other entertainment which you might not be able to afford if you were traveling abroad." The city, its attractions and beaches are "usually packed" during the school holidays, he says, adding that the holiday and short term rental market is an important element of the city's property market.

During the peak season, Arnold Maritz, southern suburbs co principal for Lew Geffen Sotheby's International Realty, says there is a very wide choice of short term lets in Cape Town, from basic accommodation without sea views for two people for just under R1000 per night, all the way to more than R100000 per night for a large villa right on the beach. "It depends on a number of factors, with the key ones being location and proximity to amenities."

A small percentage of holiday property owners live in these homes for 11 months of the year and then let their properties out over the peak holiday season. "Many will visit family 'up country' or even opt to holiday in a caravan park for the same period somewhere in the Garden Route, for example. The funds made during this period can either fill a gap in the budget or go towards extras like an overseas trip during July."

Shapiro says: "Short term rental income can be substantial and a home owner will often relocate to reap that benefit. We find the most common time for Capetonian landlords to rent out their properties is over Christmas and new year and in March, during annual events such as Cape Town Cycle Tour and the Mining Indaba."

Author: Lew Geffen Sotheby's International Realty