Even if property investment is not your game, if you happen to own a home in one of the country’s most exclusive areas, you can rake in the cash by doing nothing more than renting it out for a few weeks.
Just ask Neil*, the owner of a one-bedroom apartment in Cape Town’s Atlantic Seaboard who is basically getting paid a huge amount of money for going on holiday himself.
He and his partner are heading to Hartbeespoort Dam to spend a month with family and friends in December, and got the idea to rent out their sea-facing apartment from colleagues .
“I initially got an estate agent in to help with the short-term let and they advised that I could ask for about R3 500 a day. I decided to try market the property myself and so took some photographs and put together a write-up on the property. I sent these to my family and friends who live overseas to share with their friends.
“Within a week I had someone contact me about renting it for the four weeks I was away. We negotiated the price and rounded the sum down to R90 000.”
Neil says that when he bought the property he was told that it would be a good investment, and is now especially pleased that he bought one with an ocean view.
“If I ever move out I now know that my bond will be covered by short-term lets.”
Western Cape
Arno de Wit of Pam Golding Properties Property Rental and Management for the City Bowl, De Waterkant, and Foreshore, says average holiday lets on the Atlantic Seaboard vary from R1 500 to R6 000 a day for apartments, and R9 000 to R50 000 a day for villas.
“The Cape Town holiday rental market is set for a post-pandemic boom this summer. Occupancy figures are expected to be high as tourists locally and from abroad are anticipated to visit in numbers.”
Echoing much of this, Nick Pearson, chief executive of Tyson Properties, says the price of short-term lets along the Atlantic Seaboard varies drastically depending on the property and the time of year they want to rent.
“The average rate is somewhere around R10 000 per day, however, this price escalates in peak season and the most expensive I know of is a rental that Tyson Properties concluded in excess of R100 000 per day.”
James Carney, a Double Diamond agent at Tyson Properties Atlantic Seaboard, says studio apartments in Sea Point range from R850 per night upwards for off-season rentals and normally reach R1 500 per night in the peak season.
“A modest four-bedroom home in Camps Bay can reach up to R25 000 per night over summer and more modern homes in the same area have fetched R70 000 per night.
“Large villas in Clifton and Bantry Bay usually fetch the highest nightly rental rates which ultimately go back to the value of the property. I have concluded rentals for over R100 000 per night for two-week rentals in Clifton, however, if clients want services added, such as private chefs, drivers, security, etcetera, then this nightly rate swiftly increases.”
He adds: “South Africans are usually more knowledgeable and specific with their area selection. Clifton and Bantry Bay are known as ‘wind-free’ suburbs so these are usually the first areas to go. International clients usually need to be educated on areas. They would usually request Camps Bay because of the restaurants and retail aspects, not knowing that Cape Town is relatively small and that Clifton and Bantry Bay are very short drives away.”
Cape Town and the surrounding coastal towns and villages boast a significant short-term rental market which Ross Levin, managing director for Seeff Atlantic Seaboard and City Bowl, says is set to once again boom this summer.
This could be a “massive summer season” for Cape Town with rates and occupancies expected to reach, and possibly exceed, pre-Covid levels, he says. Following the two-year Covid chaos, there is pent-up demand for travel from both the local and international market.
Levin says most establishments are fully booked, and the expectation is for a full recovery this summer. International visitors are also eagerly looking to return to the sunny shores of South Africa.
“While flats in Sea Point and the CBD are more affordable at R2 000 to R20 000 per day, the average for the Atlantic Seaboard is around R15 000 to R30 000 per day, but can go as high as R500 000 per day for a super luxury villa in the likes of Clifton. These, however, are rare and often tend to be international bookers usually paying in Dollars, Euros, or Pounds, although wealthy South Africans have been known to pay as much as R100 000 per night for a super luxury home on the Atlantic Seaboard.”
Ciska de Vries, short-term rentals agent for Seeff Hermanus, says their market has bounced back very well with bookings increasing by about 71.55%. This year, normal weekend bookings have doubled while long weekends and school holidays have been fully booked.
She adds that Seeff Hermanus’ short-term rental stock is already booked well in advance for 2023, with guests expected to arrive from around mid-December with booked periods ranging from 14 to 21 days.
“After the difficulties of the Covid period, property owners can again look forward to earning good rentals this summer, although rates have remained flat and have come down in some instances. In view of the economic challenges, guests are still looking for a good deal, or they book for shorter periods as their budgets are more restricted.”
De Vries says short-term rental rates for Hermanus and surrounds vary greatly depending on the time of year and the property. You could for example rent from around R1 000 per day or even R3 750 to R7 750 per night for a top-end home.
Margie Smalberger, rentals manager for Lew Geffen Sotheby’s International Realty in Knysna, compares the volume of rentals between the pre-Covid period and today.
She says the franchise currently has eight properties available for the Christmas period, and they range between R2 500 and R7 000 per night.
“There are an additional 18 properties that we usually rent out but they are being used by the owners/families this year.
“And two other properties from our short-term rental pool have been rented out long-term for now and will only be available again for holiday rentals next year.”
The short-term let market in Hartenbos was “very busy” last year, resulting in depleted stock, says Lezanne Schutte of Lew Geffen Sotheby’s International Realty in the area.
"But so far this year seems to be quieter with fewer enquiries. We have six properties available for holiday rentals and, so far, there are only bookings from December 23 up till January 3.“
She says rental prices have risen in the area and, unfortunately, owners aren’t willing to adjust their prices for now. Rates are between R3 000 and R4 000 per night.
Nadine van Zyl of Lew Geffen Sotheby’s International Realty in Sedgefield, reports that her office currently receives up “a maximum of 15 short-term rental enquiries throughout the year, although 2021 was very quiet”.
“Sedgefield is very small so there aren’t that many properties available in general, and those who frequent the area for their holidays tend to be the same families or friends of locals who return each year.
“There are also a few long-standing annual visitors returning to their holiday homes after renting them out on a medium-term let throughout the winter.”
She adds: “Covid definitely impacted the short-term rental market which was booming prior to its onset and, as a result, many homeowners have since opted to rent on a long-term basis to ensure income, return to stay in their own properties, or have sold and relocated elsewhere.
“What we have also noticed is that additional space in homes, such as flatlets that could be rented to holidaymakers, are now filled by extended family members.”
KwaZulu-Natal
In KZN, David Cameron, Pam Golding Properties area principal in Ballito and Zimbali, says holiday bookings for December this year are better than they were last year.
“We are up 12% from last year and it’s only November. I believe we will fare well this festive season.
“Out of 21 homes that we have listed in Zimbali, we have managed to book 12 properties so far. Some of their owners will be using them themselves over the peak season. We still have about eight properties available over Christmas as they have bookings over New Year only.”
He says the cost to book the available properties ranges from R6 000 per night to R12 000 per night for a three- to five-bedroom home.
“The properties are still available due to affordability. We are receiving enquiries, but the prospective tenants are negotiating rates despite the fact that we are still charging the same rates that we were charging three years ago.”
Andreas Wassenaar, licensee for Seeff Zimbali on the KZN North Coast agrees: “Holiday bookings are expected to be back to pre-Covid levels with people set to flock to certain areas such as the North Coast, Ballito, and Zimbali.”
Peak season rental rates have, however, been fairly flat since the pandemic.
“Smaller units range from around R1 500 to R6 500 per night, while luxury properties go for of R6 500 to R12 500 per night,” he says.
The KZN South Coast also remains extremely popular for its fabulous weather, many Blue Flag beaches and holiday-friendly coastal towns and villages, says Joleen Giraudeau, manager for Seeff South Coast. It is also very accessible for inland visitors and only about one to two hours from Durban.
“The area is expecting an influx of holidaymakers over December. It is still very affordable and most people book for one to two weeks, but many come for up to four weeks.”
She says the average rates are around R1 300 to R3 000 per night.
Sabrina Errico, Lew Geffen Sotheby’s International Realty broker principal in Ballito and Umhlanga, says the average rental is between R700 to R2 000 per night out of season, and between R1 500 and R4 000 in peak season.
“The rates can go as high as R8 000 to R10 000 per day for upmarket houses and larger apartments. We only market from Ballito to Sheffield, and in this coastal strip, I would say that Ballito and then Chakas Rock are the most popular areas.”
Pearson adds, however, that if you are buying a holiday home that you want to rent out when you are not using it, you must do your homework before signing.
“For instance, investigate which short-term agents are respected in that area, what parking and security is available – especially during peak season, and if your short-term guests will be permitted to enjoy activities on the estate that would entice them to rent your home – such as fishing in the dams and mountain biking.”
* Name changed
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