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Monday Sep 11, 2017

Airbnb continues inroad into Cape Town property market

Airbnb has made its mark on Cape Town, but despite its growing popularity, all is not that rosy.

This is according to Richard Hardie, a property professional at Knight Frank Residential, who has observed that although "roughly" 50% of homeowners on the Atlantic seaboard, in the City Bowl and Hout Bay, are considering Airbnb as an income option - an enticing opportunity to make a killing over the peak season - this theory is "flawed".

"As more and more Cape Town properties are offered on the Airbnb platform, simple economics will ensure that this greater supply results in diminishing prices for eager visitors to our beautiful city. Increased competition will possibly mirror the rules of longterm lets.

"It will no longer be the case that you can Airbnb any old property, and that the high demand will ensure an exceptional occupancy rate and high yield."

When considering a property with Airbnb potential, Hardie says think of location, parking, views, standard of accommodation, security, outside space, and other value-adds that will increase a property's competitive edge in this increasingly crowded marketplace.

But Airbnb may not always be the ideal option for certain properties or individuals and there is still merit in considering income-producing properties with long-term rental potential.

"Airbnb has affected the long-term rental market, making it increasingly harder for locals to find properties to rent, especially if they need their lease to start around November. The appeal to landlords of inflated Airbnb rentals trumps that of leasing long-term to a local who wishes to sign for a year or more."

Despite this, the security of longer tenure and the low-maintenance nature of this option also has its appeal, and there are enough tenants chasing this space to make it a viable business option.

Also, many sectional-title body corporates are considering amending their rules, to stop holiday renting.

"Resident owners and long-term occupants find the practice to be disruptive, and security is compromised by a continuous stream of strangers coming and going and not respecting the rules governing the block. There is always the possibility that the goalposts could be moved after one has purchased a property with a view to let short-term."

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