More house owners opting for BnB option
SWITCHING GEARS Instead of renting out property, owners of second homes are opting for the bed-and-breakfast model
› One of the benefits of the bed-and-breakfast model is that you are free to maintain the house as you wish; keep stringent rules in place for how many people can access it, whether or not they can smoke in it, for instance. SANTHOSH KUMAR, vice-chairman, Anarock Property Consultants
Buying a home typically means property taxes, EMIs and maintenance costs, which means, if it’s a second property, the owner often looks at turning the house into a money-making asset.
With platforms like AirBnB, Vista Rooms and Saffron Stays, many are turning to the bed-andbreakfast model as a more lucrative option than traditional rentals.
Since the segment is new, however, there can be confusion over certain aspects, such as who is liable for damage, or where the law stands.
Among the benefits of the bedand-breakfast model, says Santhosh Kumar, vice-chairman of Anarock Property Consultants, is that your home is not at the mercy of the tenant. “You are free to maintain the house as you wish; keep stringent rules in place for how many people can access it, whether or not they can smoke in it, for instance.”
EASING THE LOAD
Maintenance, however, becomes more complicated; more people using the space and amenities raises the risk of damage and wear-and-tear. Some companies offer to manage the property for you, which is one way out.
Over the past two years, that’s what Saffron Stays and Vista Rooms have been offering. “Another great benefit of the bed-and-breakfast model is that there is flexibility; the owner can use the property when there are no bookings, and it’s been maintained and kept ready for her or him,” says Amit Damani, co-founder and marketing head of Vista Rooms.
House owners interested in the bed-and-breakfast model do have to register with Indian Association of Tour Operators (IATO), says Kumar.
“There are also several guidelines issued by the Ministry of Tourism.” And every state has its own licensing regulations, Damani adds.
CAUTION POINTS
Don’t opt for the bed-and-breakfast model if you’re not in a prime location because you could end up earning less than if you rented it out, rather than earning more.
“A bed-and-breakfast works well when the location is considered strategic and central by travellers. Business can also be impacted by factors that are out of your control, such as the weather,” says Kumar.
Going the bed-and-breakfast way could also mean a slow start.
Where rentals kick in immediately, it may take several months and even years to establish your reputation as a homestay or bedand-breakfast host.
“Even after you have established yourself online, incomes are typically unstable during offseason. And one bad review could set you back months,” says Abhinav Joshi, head of research at realty consultancy CBRE
India.
It also takes some initial investment to set up the home — interiors and décor are vital if you expect tourists to spend their holidays there; for tenants, you rarely need to decorate beyond the bare minimum.
WEIGHING IN
“If it all clicks, though — location, branding, tourist inflows — you could earn every week what you would earn in rentals in a whole month,” says Shalin Raina, managing director for residential services at realty research firm Cushman & Wakefield India.
“But over the longer term, it is easier to rent so you do not have to worry so much about broken televisions, air conditioners that do not work and rowdiness at the housing society swimming pool,” the director adds.