PROPERTY NEWS - With the holiday rental market growing rapidly, especially in areas such as the Western Cape, short-term rentals might seem like an appealing option to property investors. 

The key to making these kinds of rentals profitable is to understand both the regulations and the nuances of property selection to maximize both guest satisfaction and return on investment.

According to Adrian Goslett, Regional Director and CEO of RE/MAX of Southern Africa, there are risks when choosing to do short-term rentals over long-term rentals. 

“Managing short-term rentals is far more time-consuming than having long term tenants. With short-term rentals, property owners become the host rather than the landlord – this comes with a lot more responsibility to keep guests happy. 

"On top of this, property owners will need to worry about vacancy rates and will need to do constant marketing of the property to ensure a steady flow of bookings,” he warns.

But, for those who are willing to take up the challenge, owning a short-term rental home can be very profitable – as long as the owner has purchased the right sort of property and are aware of the regulations that govern these kinds of rentals.

If you are going to be financially reliant on the home’s potential for short-term rentals, then Goslett warns of the importance of closely monitoring the upcoming regulatory changes. Currently, new rules are in the whitepaper phase and are expected to be enacted sometime in 2026. 

These new rules will enforce some form of restrictions or thresholds (for example, a maximum number of nights a home is allowed to be available for short-term letting) and will require property owners to comply with the same taxes and regulations as the rest of the tourism industry.

Apart from these upcoming regulations, Goslett also warns that if you purchase a property in a sectional title governed by a body corporate or HOA, you will have to comply with the rules they set out. 

“While the complex might allow short-term rentals initially, they are free to change this at future AGMs if they get enough votes from the residents,” he cautions.

Once you understand the regulations, it’s time to start searching for the perfect property. 

RE/MAX of Southern Africa shares the top things to consider when searching for an investment property that has the potential to generate short-term rental income:

• Safety & location
  It is important to find a property in trendy areas, but foreign guests will most likely want to walk to local restaurants and hot spots. Some streets are safer than others. To ensure the safety of future guests, it could be useful to park outside the property to see what happens under the cover of darkness.
• Drawcard, or maintenance money pit?
  Luxury features like a rooftop pool is a great drawcard for holiday makers – but it can also be a nightmare for property owners who will need to fix any leaks, cracks, or damages cause by the pool being on the roof. The best kind of investment property is a lock-up-and-go kind of home that requires little to no maintenance.
• Less is more
  Sometimes, owning two or three small apartments can be more profitable than owning one large and luxurious property. Small, affordable rentals are easier to fill than large, costly rentals.  

"Successful property investment for short-term rentals hinges not only on market trends but on a comprehensive understanding of both the regulatory landscape and the practical considerations of property maintenance. My advice to investors is to partner with a real estate professional to help you find a property that can generate long-term success in this competitive market,” Goslett concludes.

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