Airbnb has caused a massive disruption in the hotel industry, which is losing customers to individuals who are prepared to rent out their homes to holiday-makers at a fraction of the cost of a hotel room. The Airbnb website allows hosts to list their residential accommodation (from the entire property to a spare room) and homeowners are finding it a great way to supplement their income.
Even property investors who would have rented out their investment property on a longer-term basis are finding it more lucrative to rent out on a short-term basis to holiday-makers.
Ros lives in Johannesburg and has used Airbnb to rent out her spare room, which includes a private bathroom and reasonable use of the kitchen and internet. As Ros travels frequently for work, she also makes her apartment available during those periods.
“I price my place quite low because of its location, which means you have to have a rental car to get around,” says Ros.
She adds that when she is home and will be sharing her home with a guest, she specifies a maximum stay of a week. If she is away and rents out the apartment (except for her bedroom, which she locks up), she specifies a minimum stay for ease of admin.
“I don’t offer breakfast, toiletries or anything else, but I’ve stayed in places that do,” says Ros, who uses Airbnb for her own travel.
Francois Louwrens, who owns three holiday properties in Blouberg, Cape Town, has found that his occupancy has increased since he started using Airbnb to advertise his properties. Over the past six months, the apartments have been booked for 23.5 days a month – rising to 28/29 days during peak season.
Rob Mcquillan, who manages Louwrens’ three properties, says most of their Airbnb bookings come from overseas guests because they are more familiar with the website. The upside for Mcquillan is that overseas guests are a lot easier to deal with than locals.
A quick review of the properties available on Airbnb shows that a well-positioned property in Gauteng – either near the airport, a business centre or in a trendy area like Melville – can charge between R293 and R426 a night for an en suite bedroom. Even if you are just renting out for 10 days a month, that can come to an extra several thousand rands each month.
Do you have what it takes?
You are more of a hotel concierge than a landlord, so you need to be good with people and be prepared to deal with difficult guests.
You have to be nearby as this is a service-oriented business – it is not as passive as renting out a unit long term and hiring a rental agency.
Be clear about what you are offering – is it a spare room in your home where guests will feel they are crashing over with friends, or a five-star hotel experience?
For example, in one review the guests commented on how the owner would pop over each morning with hot croissants and freshly squeezed orange juice. Great for repeat business if you can manage it, but not for an owner who has to rush off to work every morning and barely has time to make their own breakfast.
Even if you can’t do the hot croissants in the morning, make sure you offer basic food on arrival such as milk, bread and coffee. You will get better reviews, which means more business.
Your room must offer what people are able to find in a hotel, such as an ironing board, coffee maker, hairdryer, full-length mirror and towels.
Remember, if you are renting out a room on your premises, you are letting a stranger into your home. If you are renting out an entire property, you also stand the risk of damage or even theft.
By and large, negative incidents appear to be few and far between, but you still want to take precautions. Check the potential client for past reviews and also request a copy of their ID or passport and make sure you pack away all your personal belongings.
“You just have to be sensible and gauge from your correspondence with the prospective guest, as well as from their reviews from other hosts.
“I’ve hosted single men, single women and couples,” says Ros, who has only accepted 15 of the 62 requests she has received through Airbnb.
While you can do your homework to vet your guests, you also need to make sure you have the right insurance in place.
While the Airbnb platform does offer its host a Host Guarantee of $1 million (R13 million) to pay for damages (excluding cash and securities, pets, personal liability