The good news: Post-pandemic short-term rentals are on the rise

And it’s an opportunity to earn an extra income by letting out your home, but be sure to heed experts’ advice first

THE AWFUL days of the pandemic are behind us and gobal short-term renting is again on the up. This means that more people than ever are earning money by letting out spare accommodation.

According to Airbnb, the typical South African host earns just over R26 000 – equivalent to approximately one month’s additional pay for the average income earner – by renting their space on the platform.

The November 2022 Airbnb survey also revealed how the rising cost of living has seen South African families look for more affordable accommodation on the site when considering their holidays.

Added to that, more people are considering hosting visitors to make money to supplement their income.

Almost 50% of respondents said the money they earned through hosting helped them stay in their home, 46% noted they used the extra money to pay for food and other items that have become more expensive, while one in 10 said it helped them avoid eviction or foreclosure.

Amid a rising cost-of-living crisis, earning much-needed income has never been more important.

The survey notes this is leading to a new wave of people considering hosting for the first time. In fact, new private rooms listings added to the platform in South Africa were up by more than 50% between Q3 2021 and Q3 2022.

The hotel industry has also been slowly but steadily recovering globally since 2021; data shows this trend continuing into the festive season of 2022.

FNB says the hotel sector’s income is clawing its way out of the lockdown dip but remains under significant pressure, albeit getting nearer to full recovery.

John Loos, the property sector strategist at FNB Commercial Property Finance, says surges in fuel prices earlier in 2022, as well as in overall inflation (driven mainly by fuel and food prices), along with rising interest rates and a slowing economy, have become a more recent source of financial pressure on business and consumers.

“This, in turn, may have constrained the pace of recovery in demand for tourism trips of both a holiday and business nature, albeit it not stopping the recovery entirely.

“I expect that ‘full recovery’ back to where real (inflationadjusted) hotel income reaches 2019 levels, may occur only well into 2023, at best.”

He says the December 2022 holiday season looks set to see an improvement on December 2021, “but may still be below the December 2019 level of occupancy rate and income, given the recent economic constraints”.

The State of Cape Town Central City Report 2021 – A year in review, published by the Cape Town Central City Improvement District (CCID), says this season will be strong and they are expecting a full recovery to 2019 levels by the end of 2024.

In KZN the closure of beaches due to sewerage problems may somewhat dampen the strong holiday return.

Estate agents, especially along Cape Town’s famed Atlantic seaboard are seeing a boom of short-term rentals which some say are expected to reach, and possibly exceed, preCovid levels.

Two years of Covid travel bans and fears means there is pent-up demand for travel from the local and international market, that is if money is available for hardhit consumers.

For those wanting to rent out their home, there is time for the last-minute travellers to choose your property.

There are, however, risks involved, and property owners would do well to consider these before going ahead, say the experts.

Online comparison website Hippo.co.za says that while the extra money in your bank account every month is a definite plus, it’s important to have insurance to protect you financially from any eventuality.

There are at least three types of risks to consider insuring against if you are letting a property in the short-term:

1. Your liability for your lessee – if something happens to them on your property, you would potentially need to cover medical costs.

2. Damage to your property by the tenant.

3. Theft of your property, either by the tenant or by another party who perhaps gained entry because, for example, the visitor didn’t set the alarm properly.

Various insurers may exclude certain risks, so it’s important to inform your insurer that you intend letting out a property. Also, discuss what risks are covered and whether you can extend your cover.

As the largest short-term letting platform, Airbnb has a $1m Host Protection Insurance in place automatically with every instance of letting out your property. This will cover you against personal liability and damage to your property caused by the tenant.

There are also many other accommodation bookings sites you could list with, just be sure to carefully read the terms and conditions to find out what cover they offer.

In addition to insurance concerns, you should make sure you have adequate security measures in place – as much for the protection of your property as for the safety of the visitor. If the visitor is sharing your property, be sure to educate them properly in terms of safety precautions. Burglar bars, electric fences, garden beams and alarms are useful security features.

Safety features usually have the bonus of bringing down your insurance premiums, so be sure to list them with your insurer too, says Hippo.co.za Charnel Hattingh, the head of group marketing and communications for Fidelity ADT, says a staycation means you are visible and the home is not empty and thus could deter baddies.

Whether you are going away or staying home, she advises you to dedicate time to testing your alarm and other security systems.

“Don’t leave it until the last minute, as service providers are generally inundated with technical calls over the festive season. Book your call early to avoid your security systems letting you down.

“Your alarm can do its job only if it is functioning properly, so regular testing and servicing when required is very important.

“In fact, all security systems linked to your alarm, like electric fencing and outdoor beams, should be tested regularly. Their functioning is part of a reliable alarm system.”