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Professional migration stimulates buy-to-let opportunities in at least two NC towns

Northern Cape empty road

An interesting investment opportunity exists in Northern Cape towns like Postmasburg and Daniëlskuil, said Leonie Olivier, Seeff agent in Postmasburg.

“The mining industry here is growing tremendously and it is estimated that around 12 households move to Postmasburg every year,” she added. “A small town like ours simply does not have this much housing on offer and guest houses are literally overflowing for months on end with contractors who can’t find suitable furnished accommodation.”

According to Olivier the average rental of a family home in Postmasburg range between R12,000 and R16,000 per month, two bedroom apartments fetch between R6,000 and R8,500 per month and bachelor apartments are priced between R4,500 and R5,000 per month.

Typically a family home fetching these rentals would sell for between R1,6m and R2,5m. Buy-to-let investors are looking at gross yields of between 7.6% and 9% in the first year.

Sandy-Ann Alberts, Seeff agent in Daniëlskuil, said that, although the town is comparatively small it is also experiencing a significant increase in demand for rental stock. “Accommodation is so scarce at the moment that the school’s hostel is being rented out to contract workers as single quarters,” she explained.

According to Alberts the new NorthGate development, a complex with 16 two-bedroomed units, offers investors an exciting opportunity. “The units are priced from R640,000 to R698,000 and will easily be able to fetch rentals of between R5,500 and R6,500 per month,” she speculated.

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