Industry boosts Delmas rental market

Extensive industrial development in and around Delmas in the Mpumalanga coal belt is opening up opportunities for investors in new rental units, according to Koos Pretorius, owner of the local RealNet franchise.

4 Bedroom House for sale in Delmas

“The fast pace of new industrial development, such as new mines and manufacturing facilities, is putting strain on the small existing pool of rental properties in Delmas, with contractors at the mines and staff at new facilities like the Sephaku cement plant that started operations at the beginning of this year, vying for accommodation for the duration of short contracts, and in the case of new employees, until they find suitable homes to buy," he says.
Local investors are now stepping into the breach and are increasingly buying up large stands which they subdivide to build between four and eight rental units, he says. And these units of between 180sqm and 235sqm are taken up by tenants at monthly rentals of between R4800 and R6600 as soon as they are released on to the market.
Building costs in the area now range between R4000 and R5000/sqm, depending on finishes, so units like this cost around R800 000 or R900 000 to build.
"And the trend is likely to continue for the foreseeable future due to additional commercial developments planned for the area, such as a casino and amusement park between Delmas and Bronkhorstspruit, as well as an industrial park to accommodate increasing demand for manufacturing facilities," Pretorius says.
Specialist area agent, Karin van Rooyen, adds that there is also great demand currently for three-bedroom family homes at rentals of between R5000 and R6500 per month. Although a fair proportion of contractors relocate their families to Delmas for the duration of contracts of between 18 and 24 months and rent family homes, many other contractors rent homes in the same category for teams of colleagues.
"Thus homes with three or four bedrooms can be rented to accommodate up to 12 residents, but in this case rentals are usually calculated per head, like a student commune. In most instances, these rates are around the R1000 per month mark, which allows landlords to achieve excellent returns," she says.
RealNet Delmas offers tenants who work long shifts additional services such as home cleaning and garden services at a small monthly fee. "This option is very popular among teams of contractors, who basically only eat and sleep on the premises and do not have time to maintain the property in terms of rental contracts," she says.
Meanwhile properties for sale are also in great demand and interest is very high in the R650 000 to R850 000 price range, but stock is extremely limited, she says. "Average sales prices are now between R900 000 and R1,2m and there is marked buyers' resistance above this level. Top properties with prices of up to R3,5m are, however, taken up on occasion by top-level mine managers and executives in the business sector with permanent employment contracts.”

  Comment on this Article

  Please login to post comments

Post to my facebook wall
Characters remaining

    Latest Property News
    • 22 Jun 2018
      While estate agents can help the seller with correctly pricing the property and marketing a property to the right pool of potential buyers, at the end of the day it’s the impression that the property will make on buyers that counts the most.
    • 21 Jun 2018
      Anyone who’s ever been involved in a building project that’s gone wrong will appreciate the importance of adequate insurance cover in the construction industry.
    • 21 Jun 2018
      A recent news story about a blind tenant caught in a legal battle with his body corporate over letters and notices he was unable to read and consequently comply with has raised the question: what are the legal obligations for landlords with disabled tenants?
    • 21 Jun 2018
      A trend that’s taken the world by storm in recent years is that of hygge (pronounced: hue-guh), a Danish concept that is about creating intimacy, connecting with loved ones and taking pleasure in small, ordinary things.
    • 20 Jun 2018
      Buying or selling real estate isn’t as easy as it is portrayed sometimes, especially if there is a death of a party during the transaction which can make it awkward, tricky and inconvenient.
    • 20 Jun 2018
      With interest rates remaining at historic lows and banks continuing to compete for mortgage finance business, first-time buyers with funds at their disposal are currently well-placed to gain that initial foothold on the property ladder, particularly in the light of the slightly lower growth rates currently experienced in residential property values.
    • 20 Jun 2018
      The average size of bond granted in SA has grown 7,7% in the past 12 months to R934 000, according to BetterBond, the country’s biggest bond originator.
    • 19 Jun 2018
      In the current market, letting out a property can be a good option as rental demand remains strong, especially in the northern suburbs of Johannesburg. This is according to Chris Renecle, MD of Renprop. However he says that before homeowners let their property out, there are five key points they should make sure are covered before they market the property for rent and sign any lease agreements.
    Subscribe to the MyProperty Newsletter

    Last Name  
    Email Address  
    Email Frequency
    Share this Page

    For Sale Property
    Rental Property
    More Options
    Connect with us