Real Estate Investor Magazine April 2024 Edition | Page 119

INVESTING

Short-term rentals offer three key advantages :

1 . Flexibility : Hosts adjust availability and pricing to suit demand ; guests book tailored stays for weekends or extended vacations , enhancing the travel experience .
2 . Affordability : Costing less than hotels , short-term rentals suit longer stays or larger groups , providing budget-friendly options without sacrificing comfort .
3 . Personalization and Local Experience : Reflecting local charm , rentals offer authentic stays . Hosts provide personalized recommendations , enriching experiences and fostering connections .
THE BASE INVESTMENT OPTION 1 – Short-term rentals
SHORT-TERM RENTALS JAN 2024
Year 1 ( Cash Deal )
Year 1 ( 80 % Bond Deal )
Property Value
R650,000,00
R650,000,00
Furniture Pack
R70,000
R70,000
Less Developer Rebate
-R30,000
-R30,000
Total Investment
R690,000,00
R690,000,00
Total Cash Layout
R690,000,00
R138,000,00
Expected Rental ( 19 days @ R500 per night )
R9 500,00
R9 500,00
62 % Occupancy
Utilities
-R1200,00
-R1200,00
Levies
-R650,00
-R650,00
Rates & Taxes
-R180,00
-R180,00
Management fee @ 12 %
-R1080,00
-R1080,00
Bond 80 % 30 yr @ 10.75 %
-R4704,00
Net Rental
R6190,00
R1686,00
Yield ( Annual nett rental as % of total cash outlay )
10,76 %
14,66 %
Net Positive Cashflow Yr 1
R74,280,00
R20,232,00
Capital Growth 6 % end Yr 1
R39,000
R39,000
60 APRIL 2024 Real Estate Investor Magazine