The rental market in Beacon Bay near East London is booming and investors are snapping up properties with a view to generating income.
So says Kim Wood, sales agent for leading local agency Homenet on the Bay who notes that properties in the R500 000 bracket are particularly buoyant right now and that enquiries relating to such properties are pouring in.
Beacon Bay has become a popular node in recent years, known for its great beaches, laid back lifestyle, friendly people, low traffic volumes and mild climate, he says.
"This stimulated much development in the boom years and created many units that are now being rented by the large public service contingent in the area. However there is a big gap in the market for entry-level units at affordable rentals and this is what buy-to-let investors are now targeting."
One and two bedroom, bachelor type units are proving the most popular with investors who are renting them out to up and coming professionals and young, working couples.
Meanwhile, bureaucracy is putting a damper on further development in the area. A major road connecting Beacon Bay and Gonubie is on hold due to expenditure debates and service bottlenecks. And the fact that developers are increasingly being expected to pick up the full cost of servicing their builds means that many planned projects are not viable right now.
This will no doubt help to limit the supply of flats and townhouses in the area and help to underpin the value of existing properties, which in turn will in due course provide buy-to-let investors with capital growth as well as rental income.
ISSUED BY HOMENET