Mthuthu Msibi is a worldly woman. She was born in exile in the USA in 1992, and her family returned to South Africa in 1994 after our first democratic elections, where she lived in Johannesburg. This is where you will find her today, where she’s taking strides to be Johannesburg’s next property mogul.
Mthuthu, who is now based in the Gauteng, spent six years in Cape Town after finishing high school. During her time in the Mother City, she got her post-graduate degree in entrepreneurship, and charged with this entrepreneurial fervour started her own retail fashion business. Sadly, her business eventually had to close in 2016, which is when she left the Western Cape and settled in the City of Gold for good.
“It was at this stage that I got into property, almost by accident”, says Mthuthu. “After closing my business, I was offered the opportunity to manage a property that had once belonged to my mother.”
The house, in Brixton, was fully paid off, and an already established tenant in place. But very soon, Mthuthu decided she wanted to renovate and ‘flip’ the house. “I saved every Rand I could during this time and put everything into the renovation. By the time we put the house on the market, it was snatched up in an instant, and I started looking around for the next property I could sink my teeth into.”
“When I first started looking for new properties to refurbish, I thought of my aunt’s apartment in Killarney. It was big and perfect for flipping, but the more I explored properties throughout the city, the more I felt like Joburg Central was growing faster and would be a better investment.
“Using what I had saved from the sale of the Brixton house, I found my current apartment on auction and was able to snatch it up way below market value. This allowed me to spend some money on the refurbishment, including adding a second bedroom, and fixing it up as if I would want to live in it.”
Shortly after wrapping up with this project Mthuthu put the apartment on the market, and while she had a lot of interested buyers, she found that on the whole due to the downturn in the market, banks were not approving bonds and loans. She went so far as to try and auction it again but wasn’t happy with the offers, and reluctantly opted instead to hold on to it.
And what a good decision she made. Even though it cost her money, and she didn’t want to open up the property to full-time tenants, Mthuthu was advised to list the apartment on Airbnb.
“I had to invest a little more into the property, by kitting it out with furniture and Wi-Fi, and I had to live in it for a while to understand what my guests might experience in terms of the little things like lighting and water pressure, but on the whole it sounded like the best option for earning money off my property, while keeping it listed.”
The apartment has been on the booking platform ever since and is almost permanently occupied by everyone from tourists and travellers, to business people and overnighters. “So far the income that is generated via this model pays all the bills and allowing me some capital to put back into the property for further improvements so that I can get it listed on executive databases.”
Mthuthu goes on to say:
“Owning this property has so far provided me with a steady income while I’m able to explore other interests and avenues, all the while operating in an industry I am passionate about. So it allows me to grow my entrepreneurial ventures further.”
“What I am really passionate about is entrepreneurship and as a child always thought the only way one could be an entrepreneur was to either be born into a trust fund, get outside investment, or do your entrepreneurial thing as a side-line gig.”
“I was afforded a very special opportunity though, and had a chance to engage with Elizabeth Sangion, Chairperson of AWCI, and she advised me of all the options in the property sector, and how to create a property portfolio so that I wouldn’t need that side-line gig anymore.
I now realise how misguided I was, and I recognise that I can use the property to pay bills and as collateral. My first business cost me dearly; this venture, so far, has a solid base and income stream.”
She still goes to a lot of auctions, both public and private, just to see what is out there, to see what will and won’t work for Airbnb, and is steadily saving towards buying a second property. But Mthuthu admits what she actually has her eye on is buying an entire building in the future, that way turning herself from a small-time property owner into a bona fide mogul.
ABOUT THE AIRBNB MODEL
Airbnb is an online marketplace which lets people rent out their properties or spare rooms to guests. You can rent a place to stay through Airbnb – or you can rent out your own home or apartment if you’d like to make some extra cash. Airbnb takes 3% commission of every booking from hosts, and between 6% and 12% from guests. According to one study by the platform in 2017 the typical Airbnb host in South Africa earns R28 000 a year by sharing their space for just 19 nights a year.
There’s plenty of criteria to list for/search a property: from a shared room to an entire house, to having a swimming pool to having a washing machine. There are photos of the property, and the hosts/guests, with full map listing. It is simple to register and start advertising property by simply signing up at airbnb.com.
Similarly, on a local front, investors can also sign up to afristay.com, which specialises in South African properties.