The Upper Fernwood precinct, says Tony van der Lith, Rawson Properties’ franchisee for Newlands, Cape Town, has always been the most expensive section in his territory.
Up for rent now in this area, he said, is a home in Orange Street that epitomizes all that Fernwood can offer. It has three large bedrooms, one with a sunroom extending into a courtyard, an open plan living/dining area, a laundry connected to the kitchen, an outside office cum study and undercover parking for two cars. The fence is electrified and, in addition, the house is protected by beams.
The home, said van der Lith, is available at R20, 000 per month – and although this will seem high to some, such rentals are achieved regularly in Newlands and surrounding areas. Another three bedroomed house (with domestic quarters) is also available in the precinct at R22 000 per month.
“Rentals,” he said, “have taken off throughout the area we serve, i.e. in Rondebosch, Claremont, Newlands, Kenilworth and, to a lesser extent Bishopscourt. A rent of R20, 000 is quite common (and we have one home priced at R125, 000 per month) but rents of R5, 000 to R10, 000 are being achieved daily and any house or flat in this bracket will seldom stand empty for more than one month after the tenant has vacated it, provided the tenant has given the required two months’ notice of his/her intention to vacate the unit.”
Buy-to-let investors, he said, have become aware of the growth in this market and are returning to it. These days they can expect to get an 8% to 9% net return (prior to the deduction of levies, maintenance costs, rates and taxes) and to see a similar annual rise in rents year-on-year.
Asked to what he attributes this big rise in demand for renting, van der Lith said that although many people want to live in these areas (“for some, it is an absolute necessity – they simply will not contemplate other areas”), a fairly high percentage, even those earning large salaries, do not qualify in terms of the National Credit Act for the sort of bond they require – and, he added, even in the top brackets,many potential buyers have been disqualified for bonds on account of often minor credit payment lapses which they have failed to put right timeously.
Van der Lith said that he now has four agents and one administrator working purely on rental properties – and with over 200 units in his portfolio, he is determined to increase this number by 30% before the end of this year.
“The rental market is very buoyant. Many sellers have decided to rent their properties while waiting for a sellers’ market before they put their homes back on the market for sale,” said Tony Van Der Lith.
