Rent or not to rent

[distant dreamer]

Hi everyone,

Had a bit of a discussion with various people whilst visiting our apartment in El Gouna recently, about our new apartment in El Andalous, Sahl Hasheesh, as to whether to rent it out or not. The problem I have is that the prices I've been quoted so far for furniture packs seem pretty expensive to me, and the figure thats been mentioned if we buy from the developer will be even higher. Thats when I started questioning whether its actually going to be worth renting our apartment out, as it could maybe take a few years just to get the money back on the furniture pack! My husbands idea is just to lock it up and leave it in "as new" condition, and hopefully sell it a few years down the line. Mind you, for me, the idea of furnishing it is going to be the "fun" part - at least I hope it is!!!! I know prices in Egypt (certainly when Egyptians buy things) are very reasonable. The guy who looks after our apartment in El Gouna, went out, looked for, found, purchased and delivered a very good quality double mattress to our apartment for only £60. On another occassion again he went out, sourced, purchased and actually fitted overhead lights and wall lights for £15!! So I'm quite astonished at how expensive the overall cost to furnish apartments seems to be. (We purchased a fully furnished resale in El Gouna, so never had to worry about furnishing it).

When speaking to friends that regularly rent their apartments, either by local management companies or their own efforts, several only reckon they fill their apartments around 50% - 70% of the year. So once you've taken off management costs, insurance, your time and effort, plus replacing bits and pieces as they wear out, is it really going to be worth doing?

If reasonably priced furniture could be obtained, then I think we'll give it a go, but otherwise will certainly have to think about! I'd be interested to hear any ones views!

[realestatemart]

Originally Posted by distant dreamer

Hi everyone,

Had a bit of a discussion with various people whilst visiting our apartment in El Gouna recently, about our new apartment in El Andalous, Sahl Hasheesh, as to whether to rent it out or not. The problem I have is that the prices I've been quoted so far for furniture packs seem pretty expensive to me, and the figure thats been mentioned if we buy from the developer will be even higher. Thats when I started questioning whether its actually going to be worth renting our apartment out, as it could maybe take a few years just to get the money back on the furniture pack! My husbands idea is just to lock it up and leave it in "as new" condition, and hopefully sell it a few years down the line. Mind you, for me, the idea of furnishing it is going to be the "fun" part - at least I hope it is!!!! I know prices in Egypt (certainly when Egyptians buy things) are very reasonable. The guy who looks after our apartment in El Gouna, went out, looked for, found, purchased and delivered a very good quality double mattress to our apartment for only £60. On another occassion again he went out, sourced, purchased and actually fitted overhead lights and wall lights for £15!! So I'm quite astonished at how expensive the overall cost to furnish apartments seems to be. (We purchased a fully furnished resale in El Gouna, so never had to worry about furnishing it).

When speaking to friends that regularly rent their apartments, either by local management companies or their own efforts, several only reckon they fill their apartments around 50% - 70% of the year. So once you've taken off management costs, insurance, your time and effort, plus replacing bits and pieces as they wear out, is it really going to be worth doing?

If reasonably priced furniture could be obtained, then I think we'll give it a go, but otherwise will certainly have to think about! I'd be interested to hear any ones views!

good point distan I wish you all of the luck and I hope if need any help let me know

[Rivermead Global Property]

If you let it out for 50-70% of the year you are going to have a pretty good income i should think.

[lyndsay552]

Hi Neil,

Do you think 50-70% occupancy is realistic? We had been told to aim for about 12 weeks a year. Also, whats the best way to go about renting out your apartment?

Thanks

Lyndsay

[distant dreamer]

Guess it depends where your property is as to how many weeks occupancy you get. In a good location I'd hope to get at least 50% occupancy (and more if the apartments are marketed with some of the main tour operators)and around £200 a week for a 2 bed apartment, maybe a bit more. You may have to pay up to 20% for a decent management company. Then remember there's officially local tax to pay (not that I think anyone does), but anyway, money earned abroad is taxable in the UK. Depending on your agreement, you may also have to pay for the electric and water used in the apartment, plus repair bills, public liability insurance etc etc. Generally in the Hurghada area occupancy levels for hotels are pretty good (over 80% in El Gouna), so providing the flights are available theres certainly the potential.

[lyndsay552]

Thanks for the info. At the moment I'm hoping that Property Hotspots will get their act together and sort out the rental management for our apartment in Regency Towers but it'll be available for rent from 10th May and we still haven't heard anything from them.

Lyndsay

[Rivermead Global Property]

Originally Posted by lyndsay552

Hi Neil,

Do you think 50-70% occupancy is realistic? We had been told to aim for about 12 weeks a year. Also, whats the best way to go about renting out your apartment?

Thanks

Lyndsay

Hi Lyndsay, i was just taking the figures from the post above as they have friends who rent theirs out for this amount of time. As it is a new market to everyone i think the next 12 months with Desert Pearl being completed will give a good idea to rental incomes. I know WWD have contacted someone to offer a rental service to Desert Pearl owners. You could try finding an agency or use a web portal like holidaylettings.co.uk and then find a cleaning company. Depending on why you bought it if you can get a long term tennant in like a holiday rep or diving instructor it would make very good sense. The only downfall is if you bought it to use yourself.

[bedouin]

Originally Posted by realestatemart

Hello Members and friends
If any one here wana offer his flat for rent i can list it to you for free and when any rent request come through my site i charge only 10% what you think about this offer

I'll do it for 5%

[crombiestone]

I do think 50%-70% occupancy is very optimistic on holiday rentals unless you have a tour operator on board .The rental Market in the area is becoming saturated very quickly and there is already plenty of competition (In El Gouna). IMO in Hurghada it will be even tougher to find rentals and until Sahl has any level of completed facilities ,there also .

We managed about 18 weeks in the last 12 Months in EG which if my maths serves me well is about 35 %. To be honest I was surprised that it was this high.

If you are prepared to rent out long term ,you would get a lesser return PCM and have extra wear and tear on the apartment.

I dont think rental returns are a potential money maker ,but you should be able to keep the place ticking over and get a free holiday out of it
and bank on some capital appreciation.

[queenie40something]

The way we see it is any rental will be a bonus to help pay for the apartment. The sooner we pay for it the quicker we can re locate to Sharm. It would be great if we could rent it for 2 weeks each month but very doubtful and we are not banking on it.
We can easily rent it long term but would only get about £200/250 a month so we will take the chance and let it short term because we can get around £200 a week. Hence only if we let it once a month the wear and tear would be minimal compared to long term and you would get the same return.
Intasure policy will cover you for rental and liability for an extra £25 which is well worth it.