According to Airbnb, turning your home into a short-term rental allows guests to "book unique homes and experience a city like a local."
So what are the pros and cons of running an Airbnb? Seeff weighs in:
With tourism being one of the fastest growing economic sectors for South Africa, Airbnb has become a sought-after option for accommodation bookings from across the world. While there are many hotels and hospitality establishments, the new trend is to take up a room or apartment in someone’s home or even to rent out their whole flat or house.
Airbnb has opened up a whole new world that allows ordinary property owners to capitalise on what can be quite lucrative rental income streams, especially if their property is in a high demand tourist area. But, it is not just tourists who are booking on Airbnb, business delegates and those visiting family, friends and relatives or attending an event such as a wedding or concert, are all turning to Airbnb.
As with anything, there are pros and cons. Seeff provides a few guidelines:
A few pros to bear in mind:
Listing – ensure your property is presented in the best possible light with good photographs and a good description that makes it an attractive prospect. Be sure to highlight the location and proximity to important facilities and transport. This is especially important for guests who are from overseas.
Price – be sure to price your property at the right level to attract interest. If it is overpriced, you will not get any bookings and can lose out on extra income. Rather go a bit lower, but be sure that you can get bookings. If you are fortunate enough to be in a high demand area, then you can charge more. Go online and look at similar areas and properties to ensure you are not priced out of the market.
Guest experience – ensure your guest feels at home and enjoys the best stay. Remember, good reviews bring more bookings and higher rates. Aside from clean, neat and comfortable accommodation that delivers on the advertised promise, be sure to include instructions and guidelines for guests in the room – from listing popular restaurants, bars, theatres and tourist attractions to operating instructions for the equipment in the room or suite.
Communication – it is vital to remain in contact with the guest from the moment the booking is confirmed to ensure that they know what to expect. Be sure to also advise on any ‘need to knows’ such as personal security or the prevailing weather conditions. If rain is for example expected, remind your guest to bring something warm as well as a hoodie jacket or rain coat.
Arrival meet and greet – as far as possible, be available to receive your guests on arrival and give them a quick tour of your home or establishment. Take them through any operational intricacies such as the air-conditioning, satellite television and internet. A welcome drink or chocolate on the pillow will go a long way to making a good impression.
Then there are a few cons:
Competition – before embarking on investing in a property or building a flat to use as an Airbnb rental, be sure to check out the competition in your area. There are a lot of Airbnb listings and if you are in an already competitive market, you will need to stand out in some way to ensure that you attract and secure bookings.
Tax – remember, any rental income will also be taxable. You will be able to deduct expenses incurred in connection with the Airbnb accommodation, but these will need to be reasonable. Be sure to consider whether it is economically viable before leaping into investing in a property with the objective of capitalising on Airbnb.
Simple is best – do not overspend on your Airbnb facilities and do not over-decorate these either. Often, you only need the basics in the room and can provide a little extra such as bottled water or a bowl of fresh fruit. You would not want to decorate the room or flat with expensive items that can be damaged by the guest. Rather, stick to durable furniture and decor items.
Regulations – be sure to check the regulations that might apply to your property such as in the case of a sectional title scheme. In this instance, you would need to liaise with the managing agent to check what the governing rules are around short-term rentals, receiving of guests, access and so on.
Airbnb is one of the fastest growing accommodation booking sites globally and there is most certainly an opportunity for property owners to capitalise, but it is important to first do your homework and ensure you know exactly what you are in for.