Real Estate Investor Magazine South Africa April 2014 | Page 29

RESIDENTIAL
suburb to suburb. In family-oriented suburbs that
consist predominantly of family homes, proximity to
good schools, shopping centres and public transport
and/or arterial roads are important, for example,
Rondebosch in Cape Town’s Southern Suburbs.
Conversely, in more rural type settings, it is an
advantage to be out of sight and sound of arterial roads
and away from the hustle and bustle of retail centres.
The value in living on the famous Western Cape
Atlantic coastline is defined by proximity to the sea or
elevated views of the mountains and sea and, of course,
modern architecture.

“Generally speaking, the adage
still applies – it is better to have
a shack in a good position than a
palace in a poor one.”
Generally speaking, the adage still applies – it is
better to have a shack in a good position than a palace
in a poor one. Also, security and sufficient covered
or at least secure parking is important everywhere.
Investment properties are popular in established areas
where rental demands for apartments are high. Rental
returns are highest at the lower end of the market –
percentage wise, decreasing with increasing property
value. If you are growing a portfolio of properties then
having more, smaller properties versus fewer, larger
properties spreads the risks and will increase the rate of
rental return, although not necessarily capital growth.
Bear in mind that young working or professional
singles and couples and those at the other end of the
spectrum who are scaling down often opt for easy, low
maintenance, secure city living for the ambience and
style as much as the convenience and security.
As an investor it’s important to do one’s homework
and decide what you want. If your requirement is for
low risk tenancies then aim for an established area such
as Claremont or Sea Point and properties which appeal
to a mature, more affluent market.
Those looking for pure capital growth and who
are unconcerned about generating a yield on the
property until they dispose of the asset, tend to look
for trophy properties which offer special attributes
www.reimag.co.za

and are distinguishable from the general residential
property market. Along the sought after Atlantic
Seaboard these special and unique features include:
guaranteed panoramic sea views, protection from
prevailing winds, privacy from neighbours, direct
beach access and rarity value. The actual dwelling
house is often a secondary consideration as this can
always be changed – and may even be a brand new
house which the buyer elects to extensively alter
– it’s the position which is paramount. The pure
investment buyer, while wanting to include some of
the attributes set out above, is more concerned with
monthly property yields as well.

What about the layout?
The Cape Town metropolitan family home areas
should have three to four bedrooms with at least
two bathrooms, while a level garden with swimming
pool certainly adds value. However, most apartments
in Sea Point have only two bedrooms - with a new
trend among buyers demanding three bedrooms. If
all bedrooms are en suite – which is usually not the
case in older blocks – this will add value. Undercover
parking at one bay per bedroom also adds value as
well as views, appealing outlook, good maintenance,
attractive gardens, modern bathrooms and kitchens.
Newer areas such as Constantia and super luxury areas
such as Bishopscourt, Bantry Bay and Clifton demand
modern architecture with good f low, excellent
indoor-outdoor entertainment facilities, at least three
reception rooms, top security and irrigation, and
electronically controlled access. Homes with energy
saving features are attracting increasing interest
and becoming more and more important. Bear in
mind that apart from location, style and functionality
determine the initial attraction evoking the emotional
response of any buyer or tenant, so quality and finishes
will only be of any value if the response is positive.
In today’s market purchasers are looking for good
buys and value for money and may be more inclined
to compromise on their dream for a better value
offering.

Flow is important
Depending on affordability, many buyers today prefer
a modern, low maintenance home with an open-plan
layout with an emphasis on the flow of living and
entertainment areas from inside to outdoors. It’s

REALE ESTATE BUSINESS DIRECTORY

April 2014 SA Real Estate Investor

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