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BRIEF: : Our Danish client asked us to
find an investment property which would offer good capital
growth and an excellent rental return over the next ten
years.
AREA: Hout Bay, Tokai (Both catchment
areas for major private schools)
BUDGET: Up to 3.25 - 3.5 million
OPTIONS PROPOSED: : Three and four bedroom
homes in Tokai and Hout Bay.
Our client had never been to Cape Town before so approached
Space to advise on possible areas for his purchase and
type of property which would give him the best return,
to source and select a short-list which matched his stringent
criteria and to advise him on anticipated rental return.
Space handle many rental requests from people relocating
mainly from Europe and the USA, and was in a very strong
position to comment and input on both locations, property
style and layout and likely rental incomes per property.
The short-list comprised mainly four bedroom homes in
Tokai (giving great access to Reddam school) and Hout
Bay (near to one of the International Schools in Cape
Town,) On the day prior to their arrival, we came across
a five bedroom house in one of the private estates in
Hout Bay. This house priced at the top end of the shortlist
at 3.25 million Rands, we felt, offered 25% more value
than the rest of the shortlist, and as a result, we included
it as a final option. From a rental perspective it offered
something that none of the others possibilities did –
24 hour security. That was on top of an indoor swimming
pool and extensive sea views. These three elements alone
put this home into a league of it’s own in terms
of “desirability” as a rental home. This property
outshone the rest of the list, despite the fact that is
needed a cosmetic upgrade, and we felt it was very keenly
priced. Being situated in a security estate also meant
that it’s expected capital growth was also higher
than the other options.
After the first viewing, the agent contacted us to say
that they house had been re-valued by other agents to
3.7 million Rands. Our client wished to second-view this
and three others, and it was clear that this was the favourite,
even at a higher asking price. Ultimately the owner raised
the price to 3.5 million but we still felt this offered
good value. We secured this property for 3.4 million Rands.
An excellent rental house, with a potential monthly income
of around R20,000 per month once it has been redecorated,
which we strongly believe would always be in demand due
to the space, views and security.
Space have no doubt that this property will be continually
let out by international families relocating to South
Africa on transfer.
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