3 popular Cape Town suburbs for holiday apartment investments

If you want to invest in a holiday apartment and capitalise on rental income when you are not using the property, then you should be sure to invest in the right suburbs, says Jason Paans, sales manager for the Coastal Property Group.

It is now widely accepted that you cannot go wrong with Cape Town property with the Atlantic Seaboard and City Bowl undoubtedly topping the list for holiday makers.

During season, you are unlikely to find a booking anywhere as accommodation tends to be booked up months in advance, Paans said.

While areas such as Clifton, Bantry Bay and Camps Bay rank as the most sought-after when it comes to holiday bookings, apartment prices here now range well into the upper millions and it is beyond the reach of most buyers.

All is not lost though as Paans said there are other suburbs that are just as popular for rentals where you can still find an investment apartment for under R3 million.

Sea Point for example has quick access to the Blue-Flag beaches of Clifton and Camps Bay. It also has no shortage of street cafés, diners and bars with a whole host of establishments lining Main Road.

“You are also just a short walk from the beautiful palm-tree lined Sea Point Promenade. Here, there is also a large lawned area for relaxing or picnicking along with an outdoor gymnasium and a boardwalk that stretches along the sea all the way to the Waterfront,” Paans said.

The suburb offers a substantial selection of apartment complexes with a mix of older and newly renovated apartments which can be located anywhere from higher up to close to Main Road or close to the promenade.

Average selling prices are around R1.8 million-R3.8 million depending on the size, finishes and location. “The closer you are to the beach, the more expensive the apartments are and a beach front location, which rarely comes onto the market, can easily range to R20 million,” Paans said.

Average apartment rental rates for long-term residential purposes are around R14,000-R28,000/month while short-term daily rates in season are around R1,000-R3,000.

The second popular suburb for holiday rentals, is neighbouring Green Point which also benefits from its proximity to the CBD and Waterfront as well as the attractions of the Atlantic Seaboard.

It is a smaller suburb with fewer apartment complexes and prices are generally a bit higher. Expect to pay around R2 million-R4.8 million on average although new developments and top end units range upwards of R9 million, especially with views, Coastal Property Group said.

Rental rates are around R16,000-R26,000/month for long-term residential purposes and around R1,800-R3,800/day during the holiday season.

The third hot spot for investment apartments, is the CBD, an area which also benefits from its excellent proximity to the Waterfront and Atlantic Seaboard.

“It is conveniently located for business visitors and to the Cape Town International Convention Centre and Cape Town Stadium which hosts high demand events such music concerns and sports such as the Rugby 7s tournament,” Paans said.

The CBD offers a good selection of coffee shops, restaurants, cafés, bars and clubs along with retail and other facilities.

There are plenty of apartment complexes in the city, some with mixed-use facilities. Prices range from around R1.4 million-R2.8 million on average, but can go much higher for a hotel suite or top end unit with views.

Monthly rental rates average at about R15,000-R20,000 while daily rates are around R800-R2,800, the property group said.

Paans cautioned investors over hedging their bets on short-term rental income only. The short-term rental sector is highly seasonal and influenced by the economy, he said.

“During the 2007/8 global economic crisis, tourism suffered and bookings dropped significantly, so balance your expectations,” he said.

Read: 10 of the most expensive houses currently for sale in South Africa

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3 popular Cape Town suburbs for holiday apartment investments