Airbnb has taken the world by storm, with every second
person now renting out their house (or parts of it) to keen travelers at a
fraction of the price of other accommodation options. It has become
particularly popular in Cape Town and so we did a bit of digging to find out
how to start, if it’s worth it, and why so many young couples stay with the
in-laws during peak season.
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| Image from marketing-interactive.com |
How to Start
Airbnb provides a platform for you, as a host, to advertise
a hospitality service or experience in your very own home, making some extra
money on the side and offering affordable accommodation to those who are on a
budget. It is a privately held global company which acts as a broker, and makes
it very easy for you to register your home on their website. Once you have
registered, the company then handles all the advertising. Basically, all you
need is a home with a spare space to rent out – it can be anything from a
shared room to a garden cottage. Airbnb also handles all payments once a
booking has been made, so all you have to worry about is making sure your
guests find your address and that they are happy and settled in.
Rental Earning Potential
Part of why it has become so popular is because Airbnb provides
hosts with a good earning potential with little outlay. However, potential
hosts need to bear in mind that this depends on mainly two factors:
Firstly, demand always plays a major influence in
hospitality. Some months of the year will have you wondering if you made a huge
mistake, but other months will have you employing a "first come first
serve" system.
The other factor that will play a role in the earning
potential is the Airbnb rating system. After a stay, a host is required to rate
the guest according to a list and the guest can rate the host on the experience
they had. In other words, good ratings equal more business.
A typical host on Airbnb in South Africa can earn around R28
000 a year by sharing their home for a mere 16 days a year. A pretty decent
deal if you ask me.
Second Property Taxes
If you already own, or are considering owning, a second
property to use as an Airbnb space, don't forget the tax implications. In South
Africa (besides the transfer duty upon purchase) if the owner wishes to sell
the property, they would have to pay capital gains tax. Capital gains tax
basically is determined by SARS on the net profit made from the property once
the cost of the property is subtracted from the selling price. Also keep in
mind that a property which earns a rental income is subject to being taxed. The
rental income will need to be added to any other taxable income you may have.
Moving in with Your In-laws during Season to Let Out your
House
Yes, you read right! Turns out this has become a trend in
Cape Town - people actually go and live with their in-laws during peak season
and rent out their spaces. Whilst this may seem like a good idea, it is
actually a little bit…illegal. By law, it is not permitted to rent out an
entire house or apartment on a short-term basis.” This law doesn’t apply to
normal BnB’s and guesthouses because they provide accommodation within a house
or a second house on the property and are correctly zoned. In terms of
municipal planning by-laws, holiday letting is not allowed, for instance, in a
block of flats. If the owner of a flat wants to use it for short term-letting,
the space actually needs to be appropriately zoned and consent is needed from
the city’s development management department.
With these facts and figures in mind, hopefully you will be
able to decide if being an Airbnb host is for you. At the end of the day it
comes down to you offering up a homely space or an experience for guests to
enjoy, whether in your spare room, flat, house, mansion, or even your own room!
Andre Ter Moshuizen: 082 602 1367 | andre@norgarb.co.za | www.norgarbproperties.co.za
