Summary

Secure a high-performing investment with this dual-unit Airbnb property in Cape Town, offering an impressive 10% yield. Held within a VAT-registered company, this property ensures significant savings, with zero transfer duties or VAT payable if purchased by another VAT-registered entity. Perfectly managed by a professional Airbnb management company, this business provides effortless operations and consistent income. Located in one of South Africa's premier travel destinations, the property attracts year-round demand from both local and international guests. Its turnkey setup makes it an ideal opportunity for investors seeking passive income or seamless entry into the lucrative short-term rental market. Key Features: -Dual-unit property delivering a 10% yield. -VAT-registered company structure offering tax and transfer duty savings. -Professionally managed for hands-off operations. -Prime location with high tourist demand throughout the year. -Well-maintained and fully equipped for immediate bookings. -This is a rare chance to own a profitable, low-maintenance investment in the vibrant Cape Town market. Contact us today to explore this exciting opportunity!

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Fully describe the business's activities?

The business owns and manages a property in the heart of Cape Town that has been sub-divided (awaiting approvals from municipality) for two units that are currently rented out on Airbnb, operating as a short-term rental business.

Apartment A - on the short term market with a managing agency since October 2024 - the agency was changed in December to our current service provider "Elevate" due to mis management
Apartment B - on the short term market with a managing agency since December 2024 - with Elevate management agency.

How does the business operate on a daily basis?

The business owns a property with two rental units that are listed on Airbnb and operated as a short-term rental business. The property is fully managed by a professional Airbnb management company based in Cape Town (Elevate) ensuring streamlined operations and a high-quality guest experience.

Key Activities:

Property Ownership:
The business retains ownership of the real estate assets, benefiting from both rental income and potential property appreciation.

Management Delegation:
Contracts with an Airbnb management company to handle all operational aspects, including:
Listing creation and optimization.
Guest communication and booking management.
Cleaning, maintenance, and restocking.

Revenue Generation:
Generates passive income through short-term rentals.
The management company employs dynamic pricing to maximize rental yields based on market trends and occupancy.

Guest Services:
The management company ensures guests have a seamless experience, from check-in to check-out, and maintains a high standard of hospitality.

Compliance and Administration:
The Airbnb management company ensures compliance with local short-term rental regulations and manages guest reviews and feedback. Elevate uses the platform Hostaway for transparency regarding owner financials and bookings.

What Advertising/Marketing is carried out?

www.airbnb.com, booking.com and other short term rentals.

What competition exists?

Other short term rentals in the area as identified on the loom video explanation that was sent through.

What are the main assets of the business?

2 Airbnb rented out units in the heart of Cape Town - this is currently registered as one unit and is in the late stages of sub division. As a result of the sub division rates would reduce as they are currently marked business and the levies would be split with each apartment taking 50/50.

Strengths?

-PROFESSIONAL MANAGEMENT: The property is managed by an experienced Airbnb management company, ensuring smooth daily operations and high guest satisfaction.
-PRIME LOCATION: Situated in Cape Town, a popular tourist destination with strong demand for short-term rentals, especially in peak season.
-TWO RENTAL UNITS: Multiple income streams from two separate units increase revenue potential and diversify risk.
-ESTABLISHED ONLINE PRESENCE: The Airbnb listings are already active and have guest reviews, helping to build trust and attract bookings.
-HANDS-OFF OWNERSHIP: Owners benefit from passive income with minimal day-to-day involvement, thanks to management delegation.

Weaknesses?

-SEASONAL DEMAND FLUCTUATIONS: Significant revenue variability between peak and low seasons due to Cape Town’s tourism cycle.
-DEPENDENCY ON MANAGEMENT COMPANY: Heavy reliance on the management company for operations means potential risk if service quality declines or the partnership ends.
-LIMITED CONTROL OVER GUEST EXPERIENCE: Owners may have less direct influence on guest interactions and property upkeep.
-POTENTIAL REGULATORY RISKS: Short-term rental regulations in Cape Town could change, impacting operational legality or costs.

Opportunities?

-EXPANSION POTENTIAL: Opportunity to increase occupancy and revenue by adding additional units or diversifying into other short-term rental platforms.
-OFF-SEASON MARKETING: Targeting niche markets (business travelers, remote workers) or offering promotions to improve low-season occupancy.
-TECHNOLOGY INTEGRATION: Implementing smart home features or improving listing optimization to enhance guest experience and booking rates.
-PARTNERSHIPS: Collaborating with local tour operators or businesses to offer bundled experiences and attract more guests.
- DEDICATED MANAGER: Employ a property manager on a fixed salary to oversee the incoming and outgoing guests and the bookings.
-OPPORTUNITY - This is an opportunity to buy 2 recently refurbished properties without attracting VAT or Transfer Duty.

Threats?

-MARKET COMPETITION: Increasing competition from other Airbnb listings and hotels could pressure occupancy rates and pricing.
-ECONOMIC DOWNTURNS: Economic challenges or travel restrictions (e.g., pandemics) could severely impact tourism and rental demand.
-REGULATORY CHANGES: Stricter local laws or taxes on short-term rentals may increase operating costs or restrict bookings.
-NEGATIVE REVIEWS: Poor guest experiences or online reputation damage can reduce bookings and income.