Questions and Answers About Setting Up A Self-Catering Accommodation Business In Cape Town
If you’re looking for a way to make money from your Cape Town holiday home, then read on.
Starting a self-catering accommodation business In Cape Town is all about being informed. But where do you start?
You can start by deciding whether you want to manage and market yourself or use an agency. There are pros and cons of each option so it’s important to think about what will work best for your situation. Talking about cons; what are the risks?
Once you’ve made that decision, the next step is figuring out how much time and energy you have available to dedicate towards managing your property. Do you have enough time? Are there any other commitments in your life that might get in the way? These are all things worth considering before taking on this project.
Read these frequently asked questions for in-depth information about starting up a self-catering accommodation business in Cape Town!
Let’s look at the questions and answers you may have to set up your Cape Town Airbnb accommodation business.
|Table Of Contents: Setting Up A Self-Catering Accommodation Business In Cape Town|
|1. Setting Up A Self-Catering Airbnb|
|2. How To Make Money With Airbnb|
|3. How To Manage An Airbnb|
|4. T&Cs | Rules | Protection|
|5. Only School Holiday Owners|
Setting Up A Self-Catering Airbnb Accommodation Business In Cape Town
There are many benefits to starting up a self-catering accommodation business in Cape Town, but it’s important not to base your decision on purely financial incentives. A successful host, especially a SuperHost, can make money from Airbnb. But you must study it well. Ignorant is no excuse.
New owners are concerned, initially, with the daily rates we set.
“Setting High Airbnb Rates and I am happy. Rates are my measure of success!”
For example, I got this email from a new owner, after we notified him of his second booking.
I would have expected the going rate to be higher late in November….but I know you guys know what you are doing.
Although he says we know what we do, he is concerned. Correctly so.
And most owners, initially, feel the same way. Only high rates will ease their minds. But after they realise we are stacking snow, hand upon hand, building trust they get the idea.
Who can stop a snowball of trust?
Eventually, they happily bank a lot of money as the trust-snowball gets momentum and picks up speed.
Patience is the name of the game. We must crawl before we walk.
Unfortunately, rates are not based on fact.
It’s based on the time for guests to take action (speed to book or lack thereof – more below), the level of trust you established (reviews for example), perception etc.
At the moment your new house has no reviews and therefore no trust. No guest will take action (book your home) without an incentive.
Why Would An Airbnb Guest Be Your Guinea Pig?
Guests do not book willy nilly. They base their decisions on the ratings by other guests – positive reviews, Superhost status. Do they like the features, the photos, and the rates? There are more, like cancelation policies, etc.
You can have it all but with no reviews, your home will come second when compared to similar homes with many reviews.
Therefore, you really don’t have much of a choice but to make it more attractive and your only ally – competitive rates.
This means you can bring guests to take action faster with rates you may perceive as uncomfortable.
At ground zero you are buying reviews. You are paying a price to get trust.
Our only aim is to focus on achieving higher annual income. This will change your mindset. You now focus on the long term. One solid hand of snow at a time.
Let’s talk time/speed ….
The issue with maximizing rates, in isolation, is it ignores time-to-take-action – speed at which you get or don’t get bookings (more below) . Setting High Airbnb Rates are useless if over time you get no bookings.
Consider the “slower and faster” time to take action scenario:
- Let’s say you set setting high Airbnb rates and after two weeks you have no bookings. Well, you have nothing to bank and have no possible reviews to build trust. This is slow and useless. And you end up like the rest who try to make money with Airbnb.
- Let’s say you set a rate and get a booking for 28 days within a week, then another few bookings. Fast.
Use Feedback From Time-To-Action!
We are getting feedback from both above.
- The first one we know we are wasting our time. Zero money. Zero reviews. No launch.
- With the second option, we know people are interested and the snowball is being packed. By getting bookings so quickly we are going to get many reviews quickly. Trust. Even if the rates do not meet our expectations.
Action speeds up, due to high demand, we can conclude:
Our Airbnb rates are too low and we can now increase. If we cannot increase now we will increase the rates for the same time next year. Slowly over time, as we collect more reviews, increase occupancy we tweak the rates upwards. And the owner is happy.
If demand slows down we start all over again by reducing rates until guests start taking action faster. And slowly work our way up again.
On the other hand; if you are focusing on Setting High Airbnb Rates you may impress your neighbors but not your bank manager.
Allow us to do what we do best; focus on time to take action, get bookings and reviews and accumulate. Based on these multipliers we will get better than competitive rates. Why? As we build trust the time to take action reduces (higher demand) and due to demand, we increase the rates. Over time the tortoise wins the race.
Patience is the game now.
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All Airbnb guests should be reviewed fairly, firmly and truthfully by hosts.
Nothing else and nothing less.
We are all nice people with a twist. Some twists are not pleasant. Therefore being nice when we have to write an honest negative review is not easy. But it must be done.
Unfortunately, when we give the guests a dishonest positive review we defy the objective of building trust. Future hosts depend on an honest review from previous hosts. You depend on it.
As they say,
“what goes around comes around”.
We have had a case where 4 guys booked into a home with 4 great reviews. They were proper con artists and had parties every night. The last night they had [arranged?] a break-in . This puts the owner on the spot and he does not want a bad review with comments about a break-in. And then the hosts either not review they guys or shake hands and agree to share only positive stuff.
Well. We did not. We said they are not recommended. And we blocked them.
BTW: These guests never laid a complaint with Airbnb or the police. Who would not complain after a break-in? Odd.
And we expect our owners who manage to give us the truth as we know you want us to only send you good guys.
When you review a guest consider the following criteria:
- Overall experience. Overall, how the guest?
- Cleanliness. Did the guest leave the place in a reasonable state?
- Communication. How well did they communicate before and during the stay?
- Check-in. How well did they adhere to check-in procedure?
- House rules: how well did they follow the house rules?
How To Make Money With Airbnb Accommodation Business In Cape Town
You’ll read a lot of different opinions about making money with Airbnb. The following are some of the opinions you’ll likely read, and what they mean.
What is import? Trust. If you ignore trust with your guests you are going to fail. If your Airbnb guests don’t give you 5-star reviews – regularly you will be just another average Joe. You will read there is, nearly, a direct relationship between the number of reviews and occupancy. Get those reviews in quickly. Why quickly? Airbnb likes action. A dormant holiday home in Cape Town or anywhere is a waste; they’ll dump you to the bottom.
Obviously, Agency.CapeHolidays Management is biased but we are not really interested in managing a home the owner can manage herself. This should not stop us from giving you advice. So read what we share with this in mind.
Read these FAQ’s on setting up a self-catering accommodation business in Cape Town to profit.
How To Manage An Airbnb Accommodation Business In Cape Town
A holiday home in Cape Town can be managed by the host. A good host is someone who has a good attitude and is able to talk to guests; banking goodwill.
Managing hosts also need to set expectations for the guests that they are hosting and get five-star reviews from those people.
If you want to have a self-catering home, you should know how to manage time, resources extremely well. If not, it could become a disaster. Guests don’t mind a mistake but they will take revenge (bad review) if you are not responsive.
You need to meet people when they get here. You will show them the key amenities, like where is the pool or laundry room. You will also tell them about any other facilities, like WiFi codes. Setting expectations. If you are timid and afraid they will take advantage. Be firm but friendly.
Read these FAQ’s on setting up a self-catering accommodation business in Cape Town to manage it effectively.
Can you assist? I am looking for personal interaction with guests and not a corporate management approach!
I Don’t Want A Corporate Airbnb Management Company To Assist My Guests!
I never thought about this objection until I got a potential owner who said to me, “I want professionals to manage my mother’s home in Muizenberg, but I don’t want an impersonal corporate company to run it!”
Never in my worst dream did I expect this judgment. Unfortunately, she never read our FAQs and 100’s of 5 star reviews.If you read our reviews and our Airbnb profile carefully (here) you’ll notice what guests had to say about our personal hosting. You’ll see that we are called the Horak Clan. We host people as, “Johan, Elmarie, Nandi”. How personal is this? The only none personal thing is our logo.
Self-Catering Accommodation Business In Cape Town: T&Cs | Rules | Protection
Managing a Cape Town self-catering holiday home has its risks, fears, and worries. You read bad press about parties, people occupying houses, theft, and whatnot. Without getting way out-philosophical;
A ship in port is safe; but that is not what ships are built for. This saying has also been credited to Albert Einstein and John A. Shedd..
You have to address the risks, do foolproof audits, set up systems to reduce risk. Never assume. Fools like hosts who make assumptions.
The following FAQs are for owners who want an agency to manage but you can pick and choose what to read. Adapt it for your Cape Town self-catering business. And make it better.
Read these FAQ’s on setting up a self-catering accommodation business in Cape Town to make it foolproof (if there is such a perfect home – we should try).
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How To Short Term Rent My Cape Town Holiday Home During School Holidays Only?
Local Cape Town schools have a six-week break during December and January. For those who own a nice home in Cape Town, this is an opportunity to earn extra income by renting their property while the owner takes a break.
Many Cape Town “school holiday” owners want to rent their home but are worried about the work that goes into it. They’re also unsure of how to manage their home, and whether or not they should charge in a different currency. These people need someone with the infrastructure and marketing skills to help them rent their home on Airbnb. It’s not difficult when renting online but when it comes to pricing and management, guest liaison, checking on guests, parties, etc. they may decide that it’s too much for them.
You may read that it’s difficult to match the expectations of “school holiday” owners, and the impact of expecting guests. When you manage an annually available Cape Town holiday home you have various feedback loops; the house becomes more guest-ready or foolproof. Owners also learn the ins and outs.
I suggest owners ensure they are fully aware; high expectations will be deflated if the owner lives in a perfect world. Read as much as possible. We also share a Terms & Conditions dedicated to “School Holiday Owners” specifically. The T&Cs is designed to highlight the issues you may encounter.
Read these FAQ’s on setting up a self-catering accommodation business in Cape Town for owners with kids at school; meaning the home is only available during school holidays.