Great returns on offer in Mbombela’s hot rental market

Ongoing commercial and industrial development in the bustling city of Mbombela has created a shortage of quality homes for sale and to let – and excellent opportunities for residential property investors.
“Investors with cash can currently make between 9 and 11 percent annual return on their properties here,” says Juan Botha, principal of the local RealNet franchise, “which is certainly better than they would get on cash in the bank. What is more, strict bank lending criteria are keeping property prices down, so investors can obtain excellent value for money now.”
Residential rentals in the city, he says, are running at between R6000 and R9000 a month for three-bedroom family homes, and between R8000 and R12 000 a month for upmarket houses.
“There is also huge demand for lock-up-and-go homes in secure complexes. Two-bedroom townhouses are letting for around R5000 a month and three-bedroom units for up to R7000 a month, while full-title clusters can rent for up to R11 000 or R12 000 a month.”
Most of the demand, says Botha, is coming from employees of the new manufacturing, retail and business enterprises in the growing city, where many national companies are now establishing regional offices.
“The Kruger Mpumalanga International airport just outside Mbombela and the city’s strategic location on the route to Maputo means it is increasingly being seen as a gateway to Africa and the rest of the world, and this is encouraging the establishment of many new businesses, too.
“As a result, the residential market is very active and energetic, and sales are going well now in the lower price range of R400 000 to R700 000. We are also seeing rising demand at R1,5m and above.
“But many in the middle-income group are still struggling under big debt burdens and there is a reluctance to borrow in this sector, as well as the reluctance by the banks to lend, and this is what is really driving our rental market.”
And, he says, with experts predicting that interest rates must start to rise again soon, the situation is expected to remain positive for investors for quite some time.

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