Real Estate Investor Magazine South Africa March/April 2019 | Page 7

EDITORIAL
JOHANN RUPERT
VIEW
How to keep growing:
lead change through
innovation and digital
Today it is a completely different story
with an abundance of quality, well-lo-
cated and very well-priced properties
and rooms for rent that many hotels
cannot match in quality, location or
price. Airbnb and short-term rental
models have really flipped the hospitali-
ty industry on its head. Since the launch
of the Airbnb platform back in 2008,
more than 5 million ‘hosts’ have hopped
onto this bandwagon. Last take the
company was raking in a jaw-dropping
$2.7 billion, enough to get any investor’s
interest.
Statistics show that worldwide more
and more rental professionals are joining
the game and leveraging the multi-bil-
lion-dollar Airbnb industry. In South
Africa it is common for investors to sell
their properties in prime locations ad-
vertising ‘already running Airbnb and
holiday rentals’. In fact, a trend in the
market shows owners of long-term leas-
es offering short-term leases as a sub-
lease to tenants for additional income.
This model at first seemed a bit strange
for traditional landlords and property
managers who have historically made
their cash off long-term leases and an-
cillary rental services. When you actu-
ally do a deep dive down, you will see
that there is a lot of cash to be made
with shorter term tenants. In South Af-
rica the rental market is under pressure
due to the poor economic situation and
growth in co-sharing accommodation.
In the struggling office sector, as a result
of over- supply and lower demands, we
are seeing the same trend in the growth
of shared office and co-working envi-
ronment.
At the recent Digitalisation of real es-
tate conference hosted by Real Estate
Investor Magazine in both Cape Town
and Johannesburg the market was ex-
posed to many new innovators using
technology and digital innovation to
drive their real estate business models.
Not only are these trends catching on as
they are all cheaper more effective and
accessible, but they are viable business
models of the future.
DigsConnect is the largest student
accommodation marketplace and has
connected thousands of landlords with
student tenants, and students with digs
mates. HouseMe, growing digital lead-
ers in the rental space, connects prospec-
“
tive tenants to landlords with full auto-
mation of the letting agency process all
for a fraction of traditional fees. Players
like these are making a big dent into tra-
ditional property managers’share of the
pie. Blockchain expert Werner Riekerts
shared the future of real estate using
blockchain . The secure ledger system
currently used by crypto currencies and
the benefits once adopted in the indus-
try will reinvent the real estate industry.
The role of technology and innovation
in real estate going forward will still
experience its flaws in the development
phases. However, one thing for sure is
the saving in the reduction of costs in
buying, selling and managing properties,
accuracy in reporting and the way we
transact is good news for the industry as
it will play a bigger role in everybody’s
portfolios.
Successful investing.
NEALE PETERSEN
FOUNDER & EDITOR-IN CHIEF
BARACK OBAMA
Change will not come if we wait for
some other person or some other time.
We are the ones we’ve been waiting for.
We are the change that we seek.
“
T
he advent of Airbnb has been a
real game changer and disrupter
in the property industry, partic-
ularly in the short-term rental sector of
the market. In the beginning their val-
ue proposition was limited as there was
a lot of inventory of properties on the
portal for rent with few quality listings.
Businesspeople, travellers and holiday
makers would log on only to find a really
poor selection of accommodation.
SA Real Estate Investor Magazine MARCH/APRIL 2019
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