Buy-to-let investors target Brits property
In contrast to many areas in the country where the buy-to-let market is in the doldrums, this market is flourishing in the Northwest town of Brits.
Good returns on rental property thanks to strong demand among mine contractors are luring local cash investors, says Amelda Smit of the local RealNet office.
“We started noticing in the last quarter of 2009 that local residents were cashing in other investments and using the proceeds to buy investment property. They regard rental income as a better return on their investment and the trend shows no sign of levelling off thanks to continued strong demand in the rental sector.”
Rental apartments are sought-after by the many contractors working on six to 12-month contracts at the mines surrounding Brits. Bachelor units at monthly rentals of between R1500 and R2000 are in high demand, Smit says, but stock is very scarce at the moment. Two-bedroom apartments are rented out at around R3000 per month and investors regard this as a healthy return on a purchase price of around R400 000.
In the residential market, she says, three-bedroom family homes are also in better demand than last year and buyers are active at around the R800 000 mark.
The demand for game farms in the area of between 50 and 500ha has also increased dramatically since the end of last year. Smit says buyers from Johannesburg and Pretoria are in the market for weekend retreats but that little stock is available in their target range of between R2m and R8m.
“Unfortunately farms that do come on to the market are usually priced at between R15m and R20m, more than double the top price that retreat buyers are willing to pay,” she says.
Issued by RealNet