Buying real estate in South Africa?

We've created a guide to help you avoid pitfalls, save time, and make the best long-term investment possible.

How much rental income can I make in Cape Town?

Last updated on 

Authored by the expert who managed and guided the team behind the South Africa Property Pack

property investment Cape Town

Yes, the analysis of Cape Town's property market is included in our pack

Cape Town's rental property market offers substantial income potential, with gross yields ranging from 8-15% depending on property type, location, and rental strategy.

As of September 2025, rental income in Cape Town varies dramatically by neighborhood, with Sea Point apartments achieving R12,000-18,000 monthly for one-bedroom units, while luxury Camps Bay properties can command R60,000-100,000+ for three-bedroom homes. Short-term Airbnb properties average R35,660 monthly revenue with 71% occupancy rates, though seasonal fluctuations significantly impact earnings between summer peak season (December-March) and winter low season.

If you want to go deeper, you can check our pack of documents related to the real estate market in South Africa, based on reliable facts and data, not opinions or rumors.

How this content was created 🔎📝

At The AfricanVestor, we explore the South African real estate market every day. Our team doesn't just analyze data from a distance—we're actively engaging with local realtors, investors, and property managers in cities like Cape Town, Johannesburg, and Durban. This hands-on approach allows us to gain a deep understanding of the market from the inside out.

These observations are originally based on what we've learned through these conversations and our observations. But it was not enough. To back them up, we also needed to rely on trusted resources

We prioritize accuracy and authority. Trends lacking solid data or expert validation were excluded.

Trustworthiness is central to our work. Every source and citation is clearly listed, ensuring transparency. A writing AI-powered tool was used solely to refine readability and engagement.

To make the information accessible, our team designed custom infographics that clarify key points. We hope you will like them! All illustrations and media were created in-house and added manually.

What type of property should you rent out in Cape Town for maximum income?

Apartments in Sea Point and the Atlantic Seaboard generate the highest rental income per square meter in Cape Town.

One-bedroom apartments in Sea Point achieve R12,000-18,000 monthly, while two-bedroom units command R18,000-30,000. These properties attract young professionals, expats, and tourists willing to pay premium rates for coastal proximity and amenities.

Houses in luxury areas like Camps Bay and Clifton can generate R60,000-100,000+ monthly for three-bedroom properties, but require substantially higher initial investment. Guesthouses and dedicated short-term rental units in tourist areas typically outperform standard residential properties, with average monthly revenues of R35,660 for well-managed Airbnb units.

Student accommodation in Observatory and Rondebosch offers consistent demand with yields of 8-12%, though individual unit rents are lower at R8,000-12,000 monthly. Family homes in Northern Suburbs like Bellville provide stable long-term rental income of R15,000-25,000 monthly with lower vacancy rates.

It's something we develop in our South Africa property pack.

Which Cape Town neighborhoods offer the best rental returns?

Sea Point and the Atlantic Seaboard consistently deliver the highest rental rates and strong tenant demand in Cape Town.

Sea Point apartments achieve R12,000-18,000 for one-bedroom units and attract both local professionals and international tenants. The area's proximity to beaches, restaurants, and the CBD makes it highly desirable for premium rentals.

Observatory and Woodstock target the student and young professional market, generating R8,000-12,000 monthly for one-bedroom units with high occupancy rates due to proximity to UCT and trendy cafes. The CBD and City Bowl appeal to working professionals with rents of R10,000-15,000 for one-bedroom apartments.

Camps Bay and Clifton command the highest absolute rents, with luxury three-bedroom properties achieving R60,000-100,000+ monthly, though purchase prices are correspondingly high. Emerging areas like Bellville and Durbanville offer attractive yields of 9-12% with lower entry costs, targeting families and achieving R7,000-15,000 monthly for various property sizes.

Rental demand and pricing vary significantly even within neighborhoods, with sea-facing properties commanding 20-40% premiums over inland units.

How does property size affect rental income in Cape Town?

Larger properties in Cape Town generate proportionally higher total rental income, but smaller units often achieve better yields per square meter.

Property Size Sea Point Monthly Rent CBD Monthly Rent Yield Per Sqm
Studio (30-40 sqm) R9,000-13,000 R8,000-11,000 R250-350/sqm
1-Bedroom (50-70 sqm) R12,000-18,000 R10,000-15,000 R200-300/sqm
2-Bedroom (80-120 sqm) R18,000-30,000 R14,000-20,000 R180-250/sqm
3-Bedroom (120-180 sqm) R30,000-60,000 R20,000-35,000 R150-200/sqm
4+ Bedroom (200+ sqm) R60,000-100,000+ R35,000-50,000 R120-180/sqm

Three-bedroom properties in family-oriented suburbs like Claremont and Durbanville achieve R18,000-30,000 monthly and attract stable long-term tenants. Additional bathrooms significantly impact rental potential, with two-bathroom units commanding 15-25% premiums over single-bathroom properties of similar size.

Which amenities boost rental income most in Cape Town?

Secure parking adds R1,500-3,000 monthly to rental income across all Cape Town neighborhoods due to crime concerns.

Sea views command 30-50% rental premiums in coastal areas, with Atlantic Seaboard properties achieving R5,000-15,000 additional monthly income for unobstructed ocean views. High-speed fiber internet is essential for professional tenants and adds R500-1,000 monthly value, particularly in areas like Observatory and the CBD.

Swimming pools increase rental income by R2,000-5,000 monthly in luxury areas but require ongoing maintenance costs of R800-1,500 monthly. Modern kitchens with quality appliances attract premium tenants willing to pay R2,000-4,000 extra monthly, especially in areas targeting young professionals.

Balconies and outdoor spaces add R1,000-3,000 monthly value, with larger terraces in Sea Point commanding higher premiums. Air conditioning is increasingly important and can add R1,500-2,500 monthly value during Cape Town's hot summer months.

Security features like access control, CCTV, and 24-hour security significantly impact tenant demand and allow for 10-20% rental premiums across all price segments.

Don't lose money on your property in Cape Town

100% of people who have lost money there have spent less than 1 hour researching the market. We have reviewed everything there is to know. Grab our guide now.

investing in real estate in  Cape Town

Should you furnish your Cape Town rental property?

Furnished properties in Cape Town achieve 20-40% higher rental rates but require substantial upfront investment and ongoing maintenance.

Short-term Airbnb units must be fully furnished to hospitality standards, including quality linens, kitchen equipment, and modern furnishings, which adds R50,000-150,000 initial cost but enables daily rates of R1,682 average. Long-term furnished rentals targeting expats and young professionals can command R2,000-5,000 monthly premiums in areas like Sea Point and the CBD.

Unfurnished properties remain more popular for family rentals and longer leases, particularly in suburban areas like Claremont and Durbanville where tenants prefer to bring their own furniture. Partially furnished options with major appliances and basic furniture appeal to students and young professionals in Observatory and Woodstock.

Furnishing costs typically require 8-15% of property value for quality items that withstand rental use. Insurance costs increase by R200-500 monthly for furnished units, and replacement/maintenance adds R1,000-3,000 annually per property.

The break-even period for furnishing investment is typically 18-36 months depending on area and rental premiums achieved.

What are current monthly rental rates by Cape Town neighborhood?

Cape Town rental rates vary dramatically by location, with Atlantic Seaboard properties commanding the highest prices in September 2025.

Neighborhood 1-Bedroom Monthly 2-Bedroom Monthly 3-Bedroom Monthly
Sea Point/Atlantic Seaboard R12,000-18,000 R18,000-30,000 R30,000-100,000+
Camps Bay/Clifton Luxury R20,000+ R30,000+ R60,000-100,000+
City Bowl/CBD R10,000-15,000 R14,000-20,000 R20,000+
Observatory/Rondebosch/Woodstock R8,000-12,000 R12,000-18,000 R18,000-30,000
Bellville/Northern Suburbs R7,000-10,000 R10,000-15,000 R15,000-25,000
Claremont/Southern Suburbs R9,000-13,000 R13,000-19,000 R19,000-32,000

Studio apartments in the CBD achieve R9,000-13,000 monthly, while equivalent units in Sea Point command R11,000-16,000 due to coastal location. Luxury penthouses and sea-facing properties can achieve significantly higher rates, with some Camps Bay properties reaching R150,000+ monthly for exceptional units.

It's something we develop in our South Africa property pack.

How much can you earn from Airbnb in Cape Town?

Cape Town Airbnb properties average R35,660 monthly revenue with 71% occupancy rates as of September 2025.

Daily rates average R1,682 across Cape Town, with Atlantic Seaboard properties achieving R2,000-4,000+ nightly during peak season (December-March). Camps Bay and Clifton luxury units can command R5,000-10,000+ per night for exceptional properties with sea views and premium amenities.

Occupancy rates fluctuate seasonally, reaching 80-90% during summer months but dropping to 50-60% during winter (May-September). Many hosts set minimum 30-night stays during low season to attract extended visitors and maintain cash flow.

Annual gross revenue for well-positioned Airbnb properties ranges from R300,000-600,000, with exceptional luxury units achieving R800,000+ annually. After platform fees (3% Airbnb + 14-18% VAT), cleaning costs (R300-800 per turnover), and management fees (15-25%), net revenue typically represents 60-75% of gross bookings.

Properties requiring minimal seasonal adjustment and year-round appeal in areas like Observatory and CBD maintain more consistent occupancy compared to purely tourist-focused coastal units.

How do seasonal trends affect Cape Town rental income?

Cape Town rental income peaks during summer months (December-March) when tourist demand and rental rates increase by 25-50%.

Short-term rentals experience the most dramatic seasonal variation, with December-February achieving 85-95% occupancy at premium rates, while June-August occupancy drops to 45-60% requiring rate reductions of 20-30%. Many Airbnb hosts increase minimum stay requirements to 7-30 nights during low season to reduce turnover costs.

Long-term rental market remains relatively stable year-round, though new lease signings peak in January-February when many expats and students arrive. University areas like Observatory see increased demand during academic terms (February-November) with slight softening during December-January holidays.

Atlantic Seaboard properties benefit most from seasonal tourism, with sea-facing units achieving 40-60% higher rates during peak summer compared to winter months. Inland areas like Bellville and Claremont show minimal seasonal variation for long-term rentals.

Successful investors often switch strategies seasonally, operating as short-term holiday lets during summer and longer corporate rentals during winter months to maximize annual income.

infographics rental yields citiesCape Town

We did some research and made this infographic to help you quickly compare rental yields of the major cities in South Africa versus those in neighboring countries. It provides a clear view of how this country positions itself as a real estate investment destination, which might interest you if you're planning to invest there.

What are the monthly costs that reduce your net rental income?

Municipal rates, levies, and utilities typically consume 15-25% of gross rental income in Cape Town properties.

Municipal rates have increased 8-20% year-on-year in 2025, with monthly costs ranging from R2,000-5,000 for standard apartments to R8,000-15,000+ for luxury properties in premium areas. Sectional title levies for apartments cost R15-50 per square meter monthly, meaning R1,500-4,000 monthly for typical units.

Utility costs depend on rental arrangement - landlords covering utilities typically budget R1,000-3,000 monthly for electricity, water, and internet in furnished units. Property management fees range from 8-12% of rental income for long-term lets and 15-25% for short-term Airbnb management.

Maintenance costs average R500-2,000 monthly for apartments and R1,000-4,000 for houses, with additional costs for pools (R800-1,500 monthly) and gardens (R500-1,200 monthly). Insurance for rental properties costs R300-800 monthly depending on property value and location.

Vacancy allowance should account for 5-10% of annual rental income, though well-located properties often achieve higher occupancy rates.

What regulations apply to Cape Town short-term rentals?

Cape Town short-term rental regulations remain relatively lenient as of September 2025, but body corporate rules often restrict holiday letting.

Most residential areas permit short-term rentals without special licenses, though hosts must register properties and comply with basic safety standards for guest accommodation. Some sectional title complexes prohibit or restrict short-term letting through body corporate rules, requiring approval before operating Airbnb units.

Zoning regulations in certain areas limit commercial activity in residential zones, potentially affecting dedicated guesthouse operations. New developments increasingly include specific clauses regarding short-term rentals in title deeds and building rules.

Tourism levies may apply for larger short-term rental portfolios, and operators must register for VAT if annual turnover exceeds R1 million. Fire safety compliance, appropriate insurance coverage, and guest register maintenance are required for all short-term accommodation.

Recent trends indicate potential future regulation increases, with discussions around mandatory registration systems and occupancy limits in residential areas. Always verify current body corporate rules and municipal bylaws before purchasing property for short-term rental purposes.

How much do property management services cost in Cape Town?

Cape Town property management fees range from 8-12% for long-term rentals and 15-25% for short-term Airbnb management.

Full-service long-term management typically costs 10-12% of monthly rental income and includes tenant screening, rent collection, maintenance coordination, and monthly statements. Basic management services focusing only on rent collection cost 6-8% of monthly income.

Airbnb management companies charge 15-25% of gross booking revenue and handle listing optimization, guest communication, cleaning coordination, and key management. Premium services including interior styling and revenue optimization can cost 20-30% but often increase booking rates significantly.

Self-management of long-term rentals saves fees but requires time for tenant management, maintenance coordination, and legal compliance. Airbnb self-management is more demanding, requiring daily guest communication, cleaning coordination, and pricing optimization.

Additional costs include professional photography (R2,000-5,000), cleaning between guests (R300-800 per turnover), and emergency maintenance callouts (R500-1,500). Quality management services typically increase net income despite fees through reduced vacancy, higher rental rates, and better tenant quality.

It's something we develop in our South Africa property pack.

What returns can you expect on Cape Town rental property investment?

Cape Town rental properties typically generate net yields of 6-12% annually, with well-managed short-term rentals achieving the highest returns.

Long-term rental yields average 6-9% net after all expenses, with student accommodation in Observatory achieving 8-12% and luxury properties in Camps Bay generating 5-7% due to higher purchase prices. Properties under R2 million often achieve better percentage yields than luxury units over R5 million.

Short-term Airbnb properties generate 8-15% net yields when properly managed, though income volatility is higher due to seasonal fluctuations and tourism dependency. A Sea Point apartment purchased for R3.5 million generating R25,000 monthly achieves approximately 6% net yield after expenses.

Capital appreciation in Cape Town has averaged 3-7% annually in recent years, providing additional investment returns beyond rental income. Total returns combining rental yield and capital growth often reach 10-15% annually for well-positioned properties.

Properties requiring renovation or in emerging areas like Woodstock and Observatory may achieve higher total returns through forced appreciation, though requiring additional capital investment and carrying higher risk profiles.

Conclusion

This article is for informational purposes only and should not be considered financial advice. Readers are advised to consult with a qualified professional before making any investment decisions. We do not assume any liability for actions taken based on the information provided.

Sources

  1. CrowdSq - Top 5 Neighborhoods in Cape Town for Rental Properties
  2. The AfricanVestor - Average Rent Cape Town
  3. Pam Golding Properties - Strong Demand for Rental Properties
  4. Airbtics - Annual Airbnb Revenue in Cape Town
  5. AirROI - Cape Town Market Data
  6. Hoom - Cape Town's Rental Market
  7. Private Property - Cities with Highest Rental Demand
  8. Steer - Cape Town's Rental Market in 2025