Hermanus: 1/2 The Town For Sale

Reader GH writes:

Just came back from a few days in Hermanus. I'm not lying when I tell you that virtually every 2nd house is for sale.

Anyone out that side got more information?

Rent Vs Buy: Hermanus - Let's Be Realistic

Here's a house in Hermanus on sale for R1 800 000. It rents for R5 000 and has a cottage on the property that produces another R2 500 a month in rent for a grand total of R7 500 a month in rent. The house was previously listed for R1 990 000 but the seller chopped R190 000 (almost 10%) off the price to 'be realistic'. That being said if you took out a full bond the difference between the rent and the bond is double the rental itself. Here's the income yield and payment graph.
So paying for the place in cash gets you a dismal 5% return on investment (about half current inflation). You're cash flow positive with 67% downpayment (well over R1 million) and even with a 50% downpayment you need 2.68% capital appreciation to not lose any money at all. And once again that's before rates, maintenance (which will be considerable on a property this size) and vacancy costs.