1,000,000 Reasons to Sign a Villa Secrets Mandate

For Luxury Villa Rental & Sale Mandate

By Nick Ray Ball 16th September 2016

Index

1. 3-Year guaranteed PR, marketing and web development budget of ZAR 1,000,000
2. Choose from the best vetted bespoke Property Managers
3. Best Rental Return on Investment
4. Prepare for Sale
5. The Villa Secrets Network – Big Spender Firepower

 

1. Villa Secrets Offers a 3-Year guaranteed PR, marketing and web development budget of ZAR 1,000,000 ($70,000) for suitable properties (as is pictures above) worth about ZAR 40,000,000 ($2,800,000)

For a ZAR 40-million-rand villa, a ZAR1,000,00 outlay in dedicated marketing and development is a great deal more than any other villa rental agency we know. In fact about 95% more.

It is also over twice the amount a real estate agency would make from the sale after referrals and agent commission. (Although we do not know how much of that commission they allocate to direct marketing, but we can be relatively certain that they will not spend more than they earn)

Please note when we say ‘paid for from commission,’ we mean ‘commission’ this package is paid for from our commission. It is not a ZAR 1,000,000 marketing expense that we would recover from your booking revenue.

Lastly on this point, our commission of 20% for direct bookings and 25% for selected affiliate booking is significantly lower than the average of 20% for direct bookings and 40% for affiliate bookings which is the average in Cape Town for the bigger agancies.

So what is the Villa Secrets, Secret?

At Villa Secrets, we see this outlay as the minimum one should spend on marketing to get the best rental and sale price. However, if you want to know how we can afford this when others cannot/do not please consider the following.

a. When you sign a mandate with a villa secrets franchise, the franchise receives significant backup/funding for the head office Villa Secrets ltd UK. Nearly 60% of the ZAR 1,000,000 comes from Villa Secrets head office and marketing divisions.

Villa Secrets Ltd UK is a technology driven company intent on creating and supporting franchises across the world, starting with the most desirable locations. Villa Secrets Ltd UK does not rent or sell villas, instead they provide the websites, content, imagery, PR and marketing for their franchises and their franchises mandated villas, seeking to increasing the SEO gravity and expand size of the Villa Secrets network.

As such, the ZAR 1,000,000 in costs, only costs the villa secrets franchise about ZAR 110,000 a year, which can easily be afforded, especially given the following…

b. Due to the ZAR 1,000,000 in additional marketing on top of an already competent multi-site network including www.VillasSecrets.com, www.CapeVillas.com & www.Cape-Town-Luxury-Villas.com. Villa Secrets franchise will receive multiple booking requests for popular dates. In the case of the lucrative 14 night Christmas and New Year Booking, which guaranteed over ZAR 1,000,000 it’s quite possible to book that slot 10 times over.

And so we make these extra enquiries count, by using them to book other villas. Which we estimate will double a franchises income.

As such, by spending ZAR 1,000,000 in marketing we generate near twice the income, see the spreadsheet ‘Magic Mandates’ and go to the second tab ‘booking Income.’

Below we see the summary, where we can see that due to the marketing we perform the ‘Villa Commission’ increase (along with the villa owner’s income).

However, in addition we also see residual income of 50% in the first year and by year 3 we expect to make more from residual income that we do in direct commission.

Villa Commission	Residual Income	Total Income
316,913	158,456	475,369	2017
364,449	364,449	728,899	2018
437,339	546,674	984,013	2020
1,118,701	1,069,580	2,188,281

The simple combination of the above makes the ZAR 1,000,000 affordable. And note that the ZAR 1,000,000 is cost price, and over 50% cheaper than a dedicated agency would charge as they need to add profit and tax.

For Due Diligence on this point click here.

Below we see a breakdown of costs, including some optional extras at cost price. To download the full spreadsheet, click here

Marketing Commitment
Villa Value from	40,000,000	to	70,000,000
	Years	Our	Agency/Direct
		Costs	Costs
Website & Content Marketing	3	346,170	626,129
Web Advertising	3	290,929	394,053
PR	3	223,875	338,623
Subscriptions & Directories	3	140,228	198,862
Guaranteed Total		1,001,202	1,557,668
Paid for by three different Villa Secret divisions
Company that acquired the Mandate		439,802	0
Communal Marketing Budget		250,238	0
S-World Villa Secrets (Head Office)		311,161	0
		1,001,202
Additional Cost Price Branding Options (Paid for by villa owner)
Villa Secrets Magazine	4 Pages	279,996	559,992
Broacher 4 Page	3	63,021	85,860
Conde Nast 1-page editorial	1	100,000	200,000
Websites Home Page Inclusion	3	150,000	300,000
Network Extras Total		593,017	1,145,852

 

2. Choose from the best vetted bespoke Property Managers

We have been managing properties in Cape Town since 2004 and we created our first PMS (Property Management System) in 2006. Experience has shown us that the way to get the right balance for the owner and guest is to use small owner run agencies, or capable individuals.

However, unless one knows the industry well, it’s a risk for owners working with an individual or small company. If things don’t run to plan, there is no recourse, and trust can also be an issue particularly when villa owners do not live in the same province or country as the property manager.

This is where Villa Secrets fills the gap. We know the best property managers and we are happy to recommend them. Villa Secrets does not charge a referral fee for recommendations, the only condition is that we do the marketing and manage the bookings calendar.

Should you be unhappy with your property manager we are on your side, after all we make money from bookings, not the managers.

 

3. Best Rental Return on Investment

Given a minimum of a ZAR 1,000,000 marketing budget, we will create a great rental return. There is quite a lot of strategy behind the initiative and some we can’t say as our competitors will follow us. But what we can say is that we know that a lot of clients who find a villa on an agency website or channel like Booking.com, search for the villa on Google and try to book direct. When they find the villas direct website, they feel like they have cut out the middle man.

When a client comes to your site, they will be very impressed, in the same way people are with Villa Secrets. This website also becomes a source of direct bookings as we create dedicated Google AdWords accounts and advertise on relevant keywords. The budget for this and remarketing is about ZAR 80,000 a year and is the main cost centre for the Villa Secrets rental franchise you sign your mandate to. (Quick note, once one signs a mandate with any Villa Secrets franchise the villa becomes a priority for VillaSecrets.com and all other franchise which spit the commission)

As for Booking Channels, we pay for HomeAway Platinum package and a number of other subscription based websites. We use the channels that are likely to create bookings. But we don’t use channels that don’t produce as it takes away from the exclusivity. In the case of ZAR 100,000,000 ($7,000,000) properties we would keep the villa very exclusive and focus on getting it on the books of the top 50 global luxury travel and luxury villa agenesis, who would not be far less interested if the villa was on Airbnb or Booking.com. In addition, we create a system that as soon as an agency has presented a villa to a client, the rest of the affiliates cant book it, which creates a very safe environment for all involved.

Add all of the above to our growing network of Luxury Cape Town villa agencies including www.VillasSecrets.com, www.CapeVillas.com, www.Cape-Town-Luxury-Villas.com. Plus, our 16 years of experience in Cape Town which has over the years seen Conde Nast Traveller recommendations and other accolades and we are confident that one will not see better return, or for that matter a better increase in prestige equating to an increase in the value of your home

 

4. Prepare for Sale

Note that in addition to increasing the value of your villa, the following also increases the frequency and rate for rentals.

We appreciate that many owners looking for a rental agency are not considering selling, many have just purchased. And that some owners wish to leave the door open for the property to be sold, should the right offer come along.

In the case of the former, owners who are not selling, in most cases the day will eventually come when one sells. And in this case, we ask that the Villa Secrets be award the first opportunity, in the form of a 3 month exclusive sales mandate.

We can’t say what the future holds, we are looking to create franchise partnerships with one, two or even all of the big estate agencies. However, if that does not occur, such agencies will happily present the villa to their clients for a split in commission, that is how may sales are done in Cape Town, the agencies all work together.

Usually this would be a 50/50 split, however Villa secrets would only require 25%, and an additional 25% would be given to the agent who referred/recruited the property to us in the first place, so long as they were active in Cape Town.

Our job is to prepare the villa for sale and do whatever we can to increase the value. We do this via various initiatives.

What Villa Secrets does that no other estate agency does is provide all the affiliate estate agents with suitable and powerful marketing and PR materials to assist the sale, and can make holiday makers aware that some buyers will be visiting during their stay.

a. The Estate Agent’s Pack

(Note the print marketing items within are cost price optional extras, or half of cost price for villas over ZAR 70,000,000)

A pack of magazines brochures and DVD’s that the villa has been featured in

a.i. We have deals in place with with magazines such as Conde Nast Home & Garden about sponsored editorial. Conde Nast appreciate that the quality content we provide sits well in their magazine and everyone loves Africa. So far we have been offered a significant discount for 4 page editorial spreads in which we would feature an exclusive use safari lodge such as Ulusaba, a private island such as Cousine Island & a Cape Town Villa. The brand association alone within a trusted magazine in priceless, and it leads to many other opportunities. (This is a Cost Price Item or half of Cost for ZAR 70,000,000 plus villas)

We will receive 200 or so magazines, some for your villa, some for other villas, some for you, some for potential big bookings and at a good number for the Estate Agent’s pack, so each potential buyer received not a single piece of cardboard for some pictures in it, but a significant bag of goodies which adds to the villas prestige, and so its perceived value.

a.ii. We are creating great articles to luxury travel blogs and magazines for them to display. Over time we shall become guest bloggers and writers for a number of quality trusted publications and websites.

a.iii. We will create a dedicated brochure that gets sent to guests and put in the Estate Agent’s pack. (This is a Cost Price Item or half of Cost for ZAR 70,000,000 plus villas)

a.iv. We shall create a DVD which will contain all TV work that has been in broadcast and videos that we have made.

a.v. The Villa Secrets Magazine, whilst this is in our opinion the most significant part of the estate agent’s pack, and a more significant rental multiplier. We are a little way away from completely presenting the format.

We last published a magazine in 2009 and distributed 30,000 with Conde Nast Traveller UK. Which saw Bulgari phoning us to say, ‘We did not know you had such luxuries in Africa’ and asked if they could be the main sponsor in our follow up. (for more money that the first magazine cost us)

We will soon be reconnecting with Bulgari and hope they still wish to participate. This magazine will cover Africa and only have a few Cape Town villas featured, so it’s a first come first served opportunity. Villas will be shown either in 4 or 8 pages. And our hope is whoever our main sponsor will be will wish to product place their couture or diamonds within the first few 8-page villa slot.

One thing one can be sure of is that being in this magazine and the magazine being a part of the estate agents pack or sent to rental clients will increase the prestige of the property. (This is a Cost Price Item or half of Cost for ZAR 70,000,000 plus villas)

b. The Website.

By the end of the first year the website will be a great asset. Superb photography, videos and content with a 2020 theme using HTML5 animations made from the Villa Secrets framework, and also including a WordPress blog that looks much like our own. See blog.villasecrets.com.

It’s worth a minute having a look at some of these blogs. I recommend Serenity, Moondance, Ulusaba & Cousine Island. Compare these pages to any other blog on any other website anywhere in the world and appreciate our passion for delivering beautiful web pages.

It’s not hard or expensive to make a good looking website nowadays. But it is hard to make an exceptional one. However, it’s the content that costs the money, most sites are let down greatly by their lack of quality content. This is not a problem at Villa Secrets as we are in part a very passionate content marketing company.

c. Awards and top 10 websites

A villa that wins an award such as The Word Travel Awards add’s a distinct air of recognition that will of course increase the value of the property. Our CEO and PR staff will do all that we can do to get villas nominated for such awards.

The same applies to Conde Nast readers awards and other such honours. However, a lot lies in the service package, a Villa Hotel for instance (as is mentioned in the next point) will stand a better chance than a standard villa.

In addition to applying to existing awards and authorities we are creating our own. This idea originated when we realised that there was a need for a better awards system for Safaris than www.SafariAwards.com , which did not mention any of the best or most popular safaris in its 70 plus awards. So we started work on our own system that used data from other awards and award winning tour operators to create a genuine platform.

We are still far from completing this but we have got the domains:
AfricanSafariAwards.com
SafraiAwards.org
Top10Safari.com

We have however started to experiment with Villas.

Have a look at www.top10CapeTownVillas.com ,it’s not complete but you get the idea. In all honesty any of the top 6 could be No.1 depending on what a client or purchaser wants from a property. And so with good confidence we can set its order in different ways. And when it’s time to sell, your villa rises to No.1.

On a more official capacity linked to our non-profit company (in making), we are creating the following awards programs and developing custom software to power each award.

ArchitectAwards.org
WorldVillaAwards.org
AfricanVillaAwards.com

We see no reason why the Conde Nast magazines we are writing for, will not let us present the AfricanVillaAwards.com results in our editorial. So long as it is transparent and judged fairy and honestly. Lucky for us we are only interested in properties that would on their day win such an award so there is no conflict of interest.

We would not do a top ten, instead we would likely have a number of top 3’s, such as

Best African Villa
Best Private Island
Best Villa Hotel
Best Cape Town Villa
Best Exclusive Use Safari Lodge

We will be starting the AfricanVillaAwards.com in early 2017

d. Villa Hotels

A Villa Hotel is a villa that offers the services of a Hotel. For example, free breakfast, complimentary drinks, a private chef, and in some cases a butler. The best known example in Cape Town is the Ellerman Villa.

If The Pentagon villa offered such a service package it would likely have won the The Word Travel Awards African Villa Category, as opposed to just receiving a nomination.

However, A Villa Hotel requires the additional expenses associated and excellent management of such services, and is a serious commitment. But for those who wish to be very serious about raising the prestige and so the ‘for sale’ value of their villa, this option should be considered.

e. Big Brand Photo Shoots and Ads.

There is nothing like a big glamorous brand like ‘BVLGARI’ doing stills shoot or advert at the villa. Each such add, properly catalogued increases the villas prestige.

We have a clever initiative for your consideration to choose or not. In general, photo shoots are not economically viable as they are for only one or two days and they can block a bigger booking, plus they are high maintenance and the money is never great.

So in general we don’t do a lot of shoots. However, a big brand shoot is great PR. So we suggest we offer all such brands and the local production companies a 50% discount on the shoot, and then use from 25% to 50% to pay for oversight, admin and PR.

As a part of the deal we will insist that we be given all complete material and ask that they make a video of them making the shoot for our benefit.

In terms of timing, we would either select dates that were near another booking or take bookings on a last minute (within 2 weeks basis)

These videos and marketing materials then go on the website in a dedicated blog and is added to the ‘property pack.’

 

5. The Villa Secrets Network – Big Spender Firepower

Villa Secrets have a complex network development strategy which is very significant for Villas over ZAR 70,000,000 ($5,000,000). In these cases, with day rates from ZAR 50,000 to ZAR 150,000 there is currently limited demand.

The way Villa Secrets network strategy works is to target companies and locations where there is greater demand for such rates and then shift the demand to Cape Town, or in the case of multi leg luxury safari and private island travellers from 5 star Cape Town hotels to 7 diamond rated villas.

One example would be to create a franchise with one of the big Safari companies, there are plenty of people paying ZAR 20,000 per person per day for Safaris, who can be tempted to Cape Town, who would not think twice at paying ZAR 50,000 a night in the winter months (which is when the Safari Season is at its peak)

Another example would be to join with a top villa company in the Caribbean, where villas are more expensive and present their clients with the option of a African villa holiday, including a safari and maybe a private Island.

Another example is to create websites for private islands such as Cousine Island, so they can book Cape Town Villas as part of multi leg trips. Another example is working with Execujet who specialise in private jets.

In the case of the above two Cousine Island &Execujet, both have agreed to us creating them an African Villas and Safari website for them to create such experiences.

We were made an offer last year by award winning Rhino Africa, and in the case of Sotheby’s Realty as early as 2009 we created them a website called ‘Africa Concierge’ which was in many ways the inspiration behind the Villa Secrets Network.

In general the Villa Secrets strategy is to find companies that have wealthy clients and recruit them to the network. And in addition create franchises in the richest locations so increasing our own client database, from which we can present Africa and Cape Town options.