Investment property - Short term rentals

[Drol]

Hey all

A friend of mine is considering investing in a Cape Town property for short-term rentals - this can be in the city or nearby such as Franschoek, Stellenbosch, Paarl etc.

Beyond the usual suspects like Camps Bay and the Waterfront, are there any up-and-coming suburbs or hidden gems with promising rental opportunities? Any personal recommendations from your local knowledge? Would it be best to just stick to the areas surrounding the Waterfront?

And then there's the property itself. Apartments, houses, boutique stays etc. What type of accommodation typically rocks the short-term rental scene? Any insights on size, features, amenities, or target demographics would be incredibly helpful.

Please share any tips, tricks, or even cautionary tales from your own short-term rental experiences. Every perspective would help the decision.

Cheers,
Drol

 

[Drol]

Specifically looking at Airbnb for now, let's say around R6 million.

 

[SteveIndeed]

Consider Rondebosch. One building I know has a lady who runs several units as Airbnbs for the units' owners. She says she consistently has an 86% occupancy rate throughout the year.

 

[Drol]

Consider Rondebosch. One building I know has a lady who runs several units as Airbnbs for the units' owners. She says she consistently has an 86% occupancy rate throughout the year.

Do you know what attracts people to the Rondebosch area. Mostly tourists or business people for example?

 

[albaster]

Do you know what attracts people to the Rondebosch area. Mostly tourists or business people for example?

That’s the right question.
Decide on a target market and then purchase.

Personally I think Rondebosch is more geared around students and long term rentals. Same goes for Mowbray and observatory. If I had the R6bar I would invest in student housing from Rondebosch to Woodstock. A room gets you around 5k per month and you just leave them be with minimal maintenance.

Airbnb I would go more towards the cbd or along the beaches. Higher income potential but you need the right location for this. I’ve been asked to move out of my apartment for the December and January period at a rate of R2800 per night and then fetching R4500 - R5500 per night for the last week of December and the first week of January. Promised full booking every night for the entire duration that I’m gone… in fact I would have gotten paid up front for the entire duration. Unfortunately timing was out and I did not capitalise on the potential. This is however a tourist friendly area and I see one unit in our block is busy year round with Airbnb. Marketing/sales done by an agent who puts their own cut onto the rental and they arrange cleaning services. However R6bar won’t get you a unit over here.

Cbd is great for business, tourists and even students. Bonus if you can get foreign students as they find accommodation cheap due to currency. Some nice new apartments that went up and well within the budget.

From a customer point of view. I would like something close to shops and entertainment with not too much noise. Keep these in mind when shopping for places as well. Easy access and comfortable with basics like tv, fridge and Aircon. We just had guests visit us and they stayed in sea point. Their apartment was just a simple bachelor pad where they could sleep, clean and eat. The Aircon helped with the heat and the tv helped when one of the kids felt a bit ill. They were barely inside and ate out daily. At the same time they were comfortable enough when they did spend time inside.

I unfortunately don’t have enough stellies/franschoek experience, but just thinking about it I don’t think I would do an Airbnb out that side. Stellies for students maybe, but for an Airbnb area I don’t think it generates enough of those type of clients all year round.

Unfortunately waterfront and surrounds is the best place to go for Airbnb investments… or at least that’s my opinion.

 

[SteveIndeed]

Do you know what attracts people to the Rondebosch area. Mostly tourists or business people for example?

Certainly students for longer-term rentals - the building I'm referring to is pretty much a 10 minute walk from UCT.

But on the Airbnb side, it's a healthy mix of tourists and business travellers, asI understand it.