As demand for short-term rentals increases in South Africa's major cities, investors are moving away from the traditional buy-to-let model in search of higher-yield opportunities.
Source:Supplied. Derrick Tait, Managing Director of Wink Aparthotels.
Well-located urban short-term rentals are outperforming long-term rentals, reshaping local property strategies. In this emerging scenario, aparthotels are emerging as a compelling hybrid investment vehicle.
By combining the flexibility of short-term rentals with professionally managed operations, they offer investors a more practical approach while tapping into the growing demand for convenient, apartment-style accommodation in major metropolitan nodes.
Operators such as Wink Aparthotels – which will soon expand into Johannesburg through its partnership with the highly anticipated Saxon Square development – were early adopters of this hybrid model.
The short-term rental management group recognized that against a tourism backdrop that prioritizes flexibility above all, guests will embrace an experience that combines the convenience of hotel services with the space and functionality of apartment living.
“But while international tourism has again reached pre-Covid levels, it is local travellers, not international holidaymakers, who are the main drivers of demand for well-located ‘aparthotels’,” says Derrick Tait, managing director of Wink Aparthotels.
“Flexibility is an obvious attraction, but affordability is equally important. As remote work becomes more entrenched, professionals are looking for accommodations that allow them to stay longer, with apartment-style amenities like fully equipped kitchens and dedicated workspaces that help keep travel costs down.”
Unlocking Johannesburg's rental potential
Cape Town may have long dominated South Africa's short-term rental conversation, but Johannesburg remains a comparatively under-explored market – especially when it comes to professionally managed 'aparthotel' offerings.
It is precisely this gap that Wynk Aparthotels, known for managing a portfolio of trendy Cape Town properties, is now moving to capitalize on through its partnership with mixed-use new development Saxon Square, which marks the group’s first venture outside the Western Cape.
Set for completion in June 2026, Saxon Square is strategically located on Oxford Road, Rosebank – one of the city’s most vibrant and well-connected neighbourhoods – and achieved sales of over R70m within the first 10 weeks of launch, reflecting strong early demand for this type of mixed-use, investment-led development.
“Wink’s expansion into Johannesburg signals growing confidence in the city’s short-term rental potential, as well as positioning Saxon Square to meet the growing demand for well-located, professionally managed accommodation in a market that is just gaining momentum,” says Tait.
Why are managed models gaining popularity?
While the growth of Johannesburg's 'aparthotel' sector points to a clear opportunity, it also raises a practical question for investors: how practical do you want to be?
Short-term rentals can provide stronger returns than traditional leases, but they come with a different level of involvement. Managing bookings, guest turnover, cleaning and maintenance can quickly become a full-time job – especially for investors without experience in hospitality.
“Short-term rentals can be incredibly profitable, but it is not passive by nature,” Tait says. “There is a lot happening behind the scenes to keep units engaged and running smoothly.”
This is where managed models are starting to gain popularity. In the case of Saxon Square, Wink's team will oversee the day-to-day functioning of the participating units – handling everything from bookings and guest services to maintenance. For investors, it offers a strategic way to earn cash in the lucrative short-term rental market without needing to manage those moving parts themselves.
Income certainty in an uncertain market
Perhaps the strongest incentive for investors is to adopt the rental-pool model and the level of income certainty it provides to the market that is not typically associated with predictable returns.
Through Saxon Square's rental-pool structure, income is consolidated across all units and distributed proportionately based on unit size, meaning returns are tied not to the occupancy of an individual apartment but to the overall performance of the short-term rental pool. Operating costs such as levies, rates and taxes are also managed within the structure, reducing the day-to-day involvement of owners.
“The rental-pool model fundamentally changes the dynamic for investors – providing access to the benefits of short-term rentals, but with a level of income stability not typically associated with Johannesburg’s hospitality sector,” says Tait.
Apart from income certainty and reduced management burden, buyers of Saxon Square can also benefit from tax efficiency under Section 13 of the Income Tax Act, which allows qualified investors to claim deductions on new residential units over time. Subject to certain criteria, this could further strengthen the long-term investment case for those building short-term rental-property portfolios.
“What is changing rapidly in Johannesburg is not just the demand for short-term rentals, but also the model,” Tait concludes. “Investors no longer need to choose between high returns and a practical approach. Now, they can access both through professionally managed, short-term rental solutions that are designed for the way people live and travel today.”
Source: Johannesburg property market opens up new opportunities for aparthotel development
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