New developments often make great rental investments

New developments often make great rental investments

Category Rentals

New developments, especially apartments, often make great rental investments for a variety of reasons according to the Seeff Property Group.

These developments tend to be in ideal locations which would have been researched by the developer. The properties would therefore generally be close to good amenities and offer access to transport and arterials to business and commercial areas. They may often also be close to tertiary education institutions, making these highly sought after by tenants.

One of the advantages of investing in a new development is that there is usually not a massive upfront cost investment needed. You are able to finance your investment by way of a mortgage loan and the rental can help pay off our investment. At the same time it will also accumulate value and ultimately, you will have an asset of substantial value.

Some great rental investment opportunities currently exist at The Hub in Woodstock and Alphen Glen in Wynberg, bordering Constantia. Both developments are pet friendly and offer the latest mod cons in addition to high speed fibre and top class security. They also offer excellent rental yields.

The Hub, Woodstock
Chad Belcher, an intern agent with Seeff Southern Suburbs says The Hub is one of the trendiest new complexes in Woodstock. It offers a mix of studio, one- and two-bedroomed apartments with all the mod cons, secure parking and high-speed fibre connectivity. The units are also pet and bicycle friendly and close to the MyCiti bus network, and the complex offers a rooftop gym with a running track with fabulous panoramic views of the Mother City.

The development is exceptionally well priced. Prices range from just R915,000 to R1.46 million. These apartments require no investment upfront with no deposit required, and 100% approved home loans available for qualifying buyers. There are no transfer costs/conveyancer fees and all sales up to R1.1 million are automatically exempt from transfer duty.

These apartments are ideal for those looking for a rental investment. The units offer an existing rental revenue stream with pre-vetted tenants, lease agreements and a net yield of around 7%.

The Hub offers an excellent location in an up and coming area with price points which are more accessible compared to the nearby CBD and Atlantic Seaboard area, yet is mere minutes away. Woodstock offers excellent centrality and quick access to the CBD and Atlantic Seaboard, UCT, Groote Schuur and surrounds.

For more information, visit https://www.thehub-woodstock.co.za/.

Alphen Glen, Wynberg
Located on the border of Constantia, the Alphen Glen development is another example which offers outstanding investment potential with above average rental returns projected based on actual rentals achieved.

Stephan Cross, manager for Seeff Hout Bay says the appeal of Alphen Glen includes a mix of lifestyles. The development offers a mix of one and two-bedroomed units as well as a limited number of three-bedroomed units, ideal for families or those looking for more space and two grand penthouses with expansive terraces.

Alphen Glen is located in a wind-sheltered area and boasts 24-hour security with access control and secure parking. There is a luxurious foyer and concierge service along with a landscaped atrium with seating and Wi-Fi. The development is also pet-friendly and equipped with high-speed fibre connectivity, ideal to work from home.

Prices range from R1,595 million for one bedroom, R2,325 million for two bedrooms and from R4,395 million for the three-bedroomed family units. The penthouses are priced at R4,995m and R5,2m respectively.

Rental yields range from 6.8% to 9% on a one-bedroomed unit and this could potentially increase further over a 6-year period. Using the example of a standard one-bedroomed unit with one bathroom and a parking bay and around 47sqm, which, depending on the units is priced between R1,595,000 and R1,925,000 (with no transfer duty payable) could yield a monthly rental of R11,000 to R12,000.

At a projected rental escalation of 8% per annum over the next 6 years, the investor could see a rental yield of 7.9% in year 1, 8.87% in year 2, 9.61% in year 3, 10.39% in year 4, 11.22% in year 5 and in year 6 the yield could reach 12.12%.

For more information, visit https://alphenglen.co.za/.

Author: Gina Meintjes