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Ideads to maximise your short term rental income


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You know that Cape Town is popular. Extremely popular. Airbnb's total self-catering listings in Cape Town is more than the second largest Airbnb country in Africa. And growing fast. In South Africa Airbnb grew by 163% in one year.

You may think this is good news. But is it? In the past owners could dictate. Now everyone with an internet connection is listing online. It can still be profitable but the game has changed forever. Those who do not compete on price will win the game. Instead we are in the business of creating experiences.  

And I am sure that you want to tap into this profitable opportunity, but where do you start?


Qualify Your Home For Listing

How to list and apply for listing at CapeHolidays

1 to 9: How To maximise short term rental income

On order to win this game we need to play by the rules. But that does not mean we can play to our advantage.

Let's try and make this read as easy as possible. We will be covering the following topics. You can skim through all our just click on a topic that may interest you. At the end of this read you'll know how we manage and market self catering accommodation in Cape Town. Hopefully you will learn how to do it yourself if that's what you want to do. Let's start......

Quick Content Guide Menu

1) Where to List?

Today Airbnb dominates the market. But that should not stop you from listing with Booking.com. There are many listing sites like Tripadvisor and it's affiliated sites; unfortunately these are insignificant. We therefore recommend Airbnb and Booking.com.

It's great to have your own website and Facebook page. Again your website can never compete with Airbnb or Booking.com. Your website will be a great brochure for reference on your business cards and marketing material. You can also advertise using Facebook, Google and Instagram but this is not for the faint hearted as these options are designed to take your money. And we don't recommend this if you are a novice.   

Agency Collaboration

In Cape Town, most great short term rental agencies pool their "stock". We have a joint database were we upload all our properties and other agencies can book these homes. Instead of paying a service fee to Airbnb we pay the booking agency the fee. We tend to book many exclusive and large properties via this channel. 

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Advertise Your Website or Facebook Page

You can use Google and Facebook etc. You are competing with the big guys when you do. For example Airbnb and Booking.com advertise on Google. You either pay Google or you pay a fee to your listing sites. We prefer to pay Airbnb etc when we have done a successful booking. Let Airbnb and Booking.com worry about Google ads. 

2) Will Your Accommodation Qualify?

Let my say that if you want to list (market) your own accommodation; you are the boss, you have the time and skills then do it. And we will not be the judge. But when it comes to our portfolio we choose only the best.

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Only Remarkable Homes Will Make Good Money

Airbnb has commoditized the market. Even though many homes will make money few will excel. And we need to find that unique and remarkable home. The effort to maximise the income of a remarkable home is similar to that of an average home. But the income will be many times more for the unique home.

First, I will list some of the most important criteria then share a short list of things we consider before we list a home.

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    Wowness! Guests are looking for experiences. To captivate them you need to demand higher rates. To demand this you need to ensure your home has that extra special appeal.
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    Direct beach access. Obviously everyone cannot be on the beach. But if your home is on the beach you will do very well when compared to the same home 5 km away from the beach. 
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    A pool. Now we all know a pool is a pain. But (most) guests want a pool. Full stop! And they pay more to stay here. Therefore these pool homes have higher occupancy than the same home with no pool.  
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    Jacuzzi or hot tub. Again a hassle. But come winter and you have no bookings, your neigbour next door with the hot tub will have some income. 
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    Location. For example: Camps Bay and Clifton are the premium areas. 
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    Views. If you have a view great. Many owners tell me the view makes their place. Unfortunately most holiday homes in Cape Town have a view. Therefore compare yourself to other similar places with views.
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    Parking, balconies and security​​​​
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    Luxury finishes, modern appliancesAgain guests are looking for experiences. If not they could stay with granny with all the family photos - nothing wrong with that but it's not for everyone. 
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    Business ready - Uncapped internet, faster than 5 Mbps.
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    Photogenic with professional photos. Never underestimate this. 
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    Lounging in the sun. Do you offer 2 sun loungers when your home accommodates up to 8 guests? What about the other 6 paying guests?Do you offer any loungers? Very few other criteria sell as well as a photo next to the pool with many sun loungers.
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    Reviews. Many reviews. More than 40 and your place is on a roll. Guests don't have to trust you. They only trust the views of guests who stayed at your home. 
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    Management and hosting: You either do it right or you don't do it. Guests are looking for....? Yes! Experiences. You need to give it all. 

How many of the criteria above can you find in this review?

"We have just returned from a 5 night at the French Breeze and it was the perfect ending to a wonderful holiday. The house is on the outskirts of Cape Town. We certainly didn't mind, because the tranquility of the house makes more than up for the driving time. French Breeze is equipped with every little gadget one can imagine: a huge kitchen with tons of appliances, a TV room, a jacuzzi, a little outside pool and even a trampoline. A very special "thank you" to Janene, the property manager who did not seem to mind that our arrival time became later and later, due to a flight delay - in the end it was 5 to midnight when we met. Even more, she went out of her way to buy a birthday cake, some candles and balloons for my daughter, who celebrated her 15th birthday in Cape Town.”

Klaus and family

How many of the above criteria can you find in this image?

3) Will You, As The Owner, Qualify?

I am sure you may think this is an arrogant question. It may be. But let's use this opportunity to discuss expectations. We do understand that owners are protective of their homes. And they should be. Let's look at a few issues.....

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    People You Don't Know Stay At Your Home: Many owners are worried as they only have long term rental experience and the accompanying horror stories. With short term rentals you get a guest who comes with a smile, to have fun and to go home. The guest pays all money upfront. They pay a deposit. But if you are reluctant don't do it. If you find it difficult to trust people then abstain.
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    Discrimination: Unfortunately if you are prejudice then this will not work.
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    Criticism. Your agent or your guests may have some issues they want to raise. If you are the defensive type- stay away. We have to use this criticism to improve.   
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    Focused on cost rather than income potential. Many owners are more worried about costs than income. For example; an agency may cost you more money than if you do it yourself. But a good agency will take all the hassles away and hopefully bring you more income than if you did it yourself. 
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    Income goal expectations. It's critical to establish the owner's expectations. We may be the experts but we use the owners income expectations to judge if we can assist the owner or not. A few owners have such inflated expectations that we will never be able to meet. And it's better to end the relationship before it starts. If the owner is reasonable we can guide the owner accordingly.   

"We must say that we are so happy to have met you. You are so professional and responsive. Everything about your business we like. We did not even consider another agency. The key is yours.”

Simon and Debbie - Owners

4) How do you protect your interest?

Let me start by saying that the Cape Town self catering market is massive. We have the ability to offer 3000 places and counting. I am saying this to show that many people are making lots of money already and they would not be in the market if it was a bad risk. But that does not mean we should not reduce risks....

Now for a the big one.....

5) What Income Can You Expect?

"We have to learn to crawl properly before we start running. We rather decline now than disappoint you later!

CapeHolidays

This is the question! The real question.

And it will depend on a lot of factors. Our experiences over time have helped us develop our own marketing philosophy.

We start off by asking the owners what annual income they expect. Many owner say to us, "but you are the experts! You should tell me!"

Yes. We are and we will use our expertise to maximise your income but before that we must know if this relationship will work.

Asking the owner what he expects is not intended to trick the owner. The only intention is to establish if we can work with the owner. And if so how will we work with the owner.

If the owner's expectation is way too high then we know we will have a problem. On the other hand if the owner's expectation is too low then we can correct it.

We believe we have a good idea of what you can get depending on the features of your home, the location (on beach or not), the luxury finishes, number of bedrooms and the suburb.

In Cape Town we have three seasons:

  • * High Peak: 20 December to 10 Jan
  • * Winter: 1 May to 30 Sept
  • * Summer before and after peak.

Summer after peak tends to be more popular than before peak with February the most popular of the summer months with the Mining Indaba, and foreigners escaping the winter for a month or more. (People can enjoy a holiday with less kids around and the wind tends to be better during Feb).

As a very general guideline you can use the number of bedrooms, the suburb and the season to get an idea. The best is to ask for a free rate consultation and we will assist you with our self catering rate calculator.

The further you move away from Camps Bay and Clifton, the lower your rates get. Let's say you have the exact same home in Camps Bay/Clifton, City Center, Southern Suburbs and Southern Peninsula.


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    Let say Camps Bay/Clifton is 100%. Then the other areas would be 50%. (NOTE: I am generalising). Let's look at an example: If you can get R50 000 per night in  Camps Bay/Clifton you will probably look at R25 000 for the same house in other areas.
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    • If high peak rate is 100% then winter would be 33% and summer about 50%. In rand and cents this would mean a Camps Bay home would get say R50 000 during high peak, R2500 during summer and R16 500 during winter. 
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    Bedrooms: Camps Bay/Clinton can be R4000 to R8000 per night per room during high season. This means about R2000 to R4000 per night during winter. Other areas would find it difficult to get R4000 per room during high peak - this is not factoring in your fully serviced, ultra luxury homes. Other areas with nice homes could expect more than R2000 per room. (Excluding entry level homes).   
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    Another idea is to look at what you could make with long term rentals as a guideline. Or decide what you want to make annually. We will take this amount and plug it into our calculator. 
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Our Philosophy When Maximising Income

If we believe it's possible to generate the annual amount you expect, at an occupancy of between 33% and 40% during year one, then we will be interested in assisting. If the occupancy must be above 50% or higher to make the target then we may not be able to meet your expectations. We must learn to properly crawl before we run. And we rather say no now than disappoint you later.

6) How Will You Manage Your Home?

 The goal: Get 5 out 5 stars all the time. Anything less than 5 out 5 is not good enough. All management tasks must focus on this. 

Management involves liaising with your guests from booking to pre-arrival to post departure. Ensuring your home always improves and that costs don't escalate. These are some of the crucial management tasks to ensure you get 5 out 5 stars all the time. 

New owners, and mostly owners who make their homes available for high peak and other holidays think they can get the money from the guest, and go sit on the beach, switch off the phone and hope the guest survives the broken geysers,  power outages, appliances breakages, flea attacks, etc. 

Management hassles and more hassles. Do you want that? Management will cost money, but pay for it and have peace of mind so you can enjoy your holiday and your investment.”

CapeHolidays

If things can go wrong- they will. And it will turn your holiday, your home, your investment into a disaster. You may have no idea how one negative review can set you back.

We are scoring 4.9 out of 5 on Airbnb. This is great. But not good enough. To maximise income we must work on maximising the experience. 

We have discussed how to set your home up for guests arriving. If you have done the basics well, and ensured your home is up to date with any and all maintenance issues your guests will have few problems. 

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    Creating experiences for guests - this includes ensuring the home is always in tip top condition. We constantly improve and work on the interior and exterior of the home. Therefore creating wowness with a host that has the right personality and attitude. 
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    Ensuring the homes meet our standards long before guests arrive. A thorough audit is conducted to establish suitability.
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    Meeting the guests upon arrival; brief them on the home, exchange keys, take care of any needs/concerns they have.
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    Liaising with the guests while they stay at the home. If something goes wrong, from a lack of water, electricity, broken items, flea attacks, burglary and other.
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    Collecting keys on departure; checking the home for issues, and refunding the breakage deposit.
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    Owner liaison: Overseeing maintenance and upgrades for owners not in the area.
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    Maintaining and distributing information and financial admin regarding the home. We start the process via the owner and see that the responsible people get access. (Giving access is a fee incurring activity.)
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    Cleaning -  once a week and or upon departure. This includes washing of linen, cleaning of the home.
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    Garden and pool - this is normally subcontracted by the owner while we ensure quality.
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    DSTV, WiFi, electricity costs the owner pays direct to providers.

Managing a home is to be on call 24 hours a day. The hassles get less with excellent maintenance free homes, an owner willing to re-invest and unforgettable experiences for guests.

 

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Our management Philosophy

Some agencies base their money making model on management costs. They ask for all kinds of monthly retainers. We don't. You pay a fixed management rate per incident. If there's no incident you pay nothing. If the house is maintenance free you pay no cost. If we arrange laundry we don't add money on top. You pay for the cleaning incident. (We can discuss the incident costs in detail when we meet)

Note 1. Although we provide a management function we only provide it if we have exclusive agreement to do marketing as well. Therefore we don't provide management if the owner is doing their own marketing. 

Note 2. For every booking we receive the guest pays a management fee that covers most of the direct management costs. Therefore your guest related management costs are reduced significantly.

 

7) Marketing Your Home

Every one can cook. But their are very few chefs.

"I have said it before; you can market your own home. Airbnb has made it simple. Very simple. And you can do it. But.......

The question is if you can beat Pareto? 

You know this guy? He said 20% of all houses on Airbnb earn 80% of all income generated.

Well. He did not say that exactly as he quoted the 80:20 principle in 1896. But the idea is applicable. Read more on Pareto here.

You have to ask yourself if you are willing to make a little money with the 80% or make proper money with the top 20%? This will depend on your love making skills with Airbnb as your partner. You can read more here

Note: Some owners are happy with little money to cover costs and then you design your marketing plan accordingly. Obviously this then depends on your lifestyle rules. 

When can an agency benefit you?

A short term rental agency can assist you (1) when you don't want to get involved, (2) when you are not present and/or (3) when you believe an agency can in any case generate more income than if you did it yourself.

Marketing is a skill and if you love online marketing, social media, setting up your own website, answering client enquiries then go for it. 

But as you may know; marketing is more than just listing it on a few websites; you need to know your rates, seasonal minimum stays, having terms and conditions, tax implications, indemnity, and third party insurance.

Are you looking for the cheapest way to market?

Note: If you focus on primarily on what our costs are and not on net income we can generate you then you should not work with CapeHolidays. Capable agencies are supposed to maximise your income while reducing costs.

In other words; although an agency will cost you money to market your home, the great ones should make you more money than if you did it yourself.

Okay......

You will save yourself 20% on commission if you do it yourself. And if you know the business then do it. But will you  get into the top 20% earners that made Pareto so famous? If you rank on page one on Airbnb then excellent. If you have 40 or more 5 star reviews then excellent. You are excellent. If not, remember we must crawl before we run.

Money Making With Marketing 

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    If you are an average marketer you may get 33% occupancy. If you already get 50% occupancy then keep on refining your skills. A great agency working on a remarkable home with nice and flexible owners can push this to 50% and even 80%.
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    • You may list your place on a few listing websites; you don't really know which ones. When you list on many live websites you'll have to manage many availability calendars. This is risky as live booking sites fine you if get a double booking. Good agencies will use services like Uplisting. Uplisting and others allow you to market on 20 or more booking sites while you manage only one calendar and one set of rates.
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    Instant Booking: Many owners are not interested in Instant booking as they want control. While you have so called control your neighbour with Instant Booking laughs all the way to the bank. One of the many criteria to get into the Top 20% is Instant Booking. And if you don't have integrated calendars across all your marketing sites you'll fail easier.
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    Setting your rates: We have seen many owners and marketers who have no clue how to set competitive rates. 


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Our Rate Setting Philosophy

You make money because of your many (+40) top reviews and your focus on increasing occupancy.

8) Why Give Exclusive Rights To Your Availability Calendar To Ensure Maximising Of Income?

This is a very simple question to answer.

If you want to do your own marketing you would not need an agency.

Why not?

CapeHolidays is an experience creator. We are not an e-commerce interface. Therefore we are not an advertising outlet. We are responsible from ground zero to lift-off and return.

CapeHolidays gives priority to our exclusive homes. These are the only homes we manage.

This means that we send all enquiries to sole-mandated homes first and when they are full or do need meet the guests needs we send business to non-sole mandated accommodation. 

Why Is The Exclusive Rights Important To You?

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    It is the only way we can maximise your home's income.
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    Honor bookings: Booking.com, Airbnb and other listing sites expect us to honor bookings. If we say your place is available, we get a booking and we have a double booking we still have to pay Booking.com fees. If we don't have full control of the calendar the risk is too high.
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    Instant Booking Priority: Booking.com and Airbnb gives priority to instant booking. If the guests meet the rules we set they can book and pay without enquiring. And we must honour the booking. If you have instant booking on Airbnb you may be visible on page one but if you don't you may only be listed on page 40. These listing sites dictate the terms. You either play to their rules are you wait for your ship to arrive :)
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You Can still Book Your own House

  • This does not mean you cannot block dates off for yourself; obviously you can and you should, but you need to do it well in advance and only after you have checked availability with us. Our bookings always comes first.

9) How To Set Your Home Up?

We need to add more value than expected. We need to captivate them and create a 5 star experience.

First impressions are lasting. Your guests may be tired when they arrive, they may be critical; they have spent a lot of money - now they want to get fair value back. If you fail on the first impression test you are in for a nasty ride.

“Give me six hours to chop down a tree and I will spend the first four sharpening the axe.”

Abraham Lincoln


Qualify Your Home For Listing

How to list and apply for listing at CapeHolidays

Thank you for reading

The Agency.CapeHolidays thrive not because we want to be the biggest. No. We only want to be the best Short Term Rental Agency in and around Cape. 

Brought To You By The Cape Holidays Experience Creators

If are not yet convinced about us why not spend a few minutes reading what our owners and guests have to say about us. 


Some Reviews

A Few Guest Reviews

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WOW Accommodation Application

Owner Name:

Owner Email:

Owner Phone Number:

Suburb:

Pool?

Location:

Bedrooms?

View?

WOWness?

Sleeps?

Management?

Are You Marketing?

Available?

Why is your place WOW?


WOW Accommodation Application

Owner Name:

Owner Email:

Owner Phone Number:

Suburb:

Pool?

Location:

Bedrooms?

View?

WOWness?

Sleeps?

Management?

Are You Marketing?

Available?

Why is your place WOW?

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