Short-term or long-term rental: which earns more in South Africa?

It’s the first question almost every owner asks us: will I really earn more with short-term guests than with a long-term tenant? Sometimes yes, by a wide margin. Sometimes no. Here’s how to work it out for your property.

The long-term baseline

A 12-month lease gives you one number: the monthly rent, minus your agent’s fee if you use one. It’s predictable, low-effort and, with a good tenant, low-risk. Your costs (levies, rates, insurance, the bond) are the same either way.

What short-term income depends on

Short-term income is the nightly rate multiplied by the nights you sell, and both move every month:

• Nightly rate. Depends on the area, size, finish, photos, reviews and the season.
• Occupancy. The share of nights booked. In most South African city markets the typical listing is booked around 25 to 35% of nights, while well-run listings reach 50 to 70% or more.
• Platform fees. Airbnb, Booking.com and others take a cut, typically in the mid to high teens of the booking value once commission, payment and service fees are added.
• Running costs you don’t have with a tenant. Cleaning and laundry between stays, Wi-Fi, electricity and water (usually included for guests), guest supplies, and management if you don’t do it yourself.

A simple way to compare

1. Write down the realistic long-term rent for your unit.
2. Estimate a short-term nightly rate and occupancy for your area. Our free revenue estimate does this from real market data.
3. Multiply: nightly rate × booked nights per month = gross booking revenue.
4. Take off platform fees, cleaning and utilities, and the management fee if you use a manager.
5. Compare what’s left with the long-term rent.

Where short-term wins

• Areas with steady business travel or tourism: Sandton, Rosebank, Umhlanga, the Gqeberha beachfront, Cape Town.
• Well-finished one- and two-bedroom apartments with secure parking and backup power.
• Owners who want the property available for their own use some of the time. With a long lease you can’t block a week in December for family.

Where long-term can be the better choice

• Areas with little visitor demand, where occupancy stays low all year.
• Complexes with conduct rules that restrict or discourage short stays.
• Owners who would rather trade upside for one predictable deposit a month.

The middle ground

Some owners mix the two: mid-term stays of one to three months for corporate guests and relocations, which sit between nightly and annual letting. It’s something we do for teams like Nissan and EconoFoods.

The honest answer is “it depends”, but it depends on numbers you can find. Get your free estimate, then talk to us about what it means for your home.