With more than 10 million nights booked worldwide, Airbnb is the world leader in travel rentals, but with about 7,500 hosts in South Africa, as well as boosting short-term letting, it’s also raising a number of issues.
As property owners are seeing favourable returns by listing their apartments and homes to attract travellers, real estate agents have seen enquiries specifically requesting properties that can be holiday let, rise by about 50%. The appeal to charge daily accommodation rates and make a return on a home investment through Airbnb is completely understandable, but buyers have to first make sure that short-term letting is permitted in the deed of sale. The body corporates of many established sectional title schemes are in fact starting to regulate the use of units in their buildings, by enforcing policies that require a minimum amount of months for units to be occupied by a tenant, or directly limiting the possibility of Airbnb activities. These rules are being brought in to preserve general quiet enjoyment and avoid security risks by knowing exactly who is occupying that specific property.
A worldwide problem
The fact that many residential units are now being let on a short term basis, and that buyers seeking Airbnb approved properties are often willing to pay a premium for this benefit, is causing a disproportionate rise in rental rates worldwide. The rental daily rates being applied exceed by far what locals can reasonably afford, putting pressure on the amount of rental property available, particularly during the summer. Also, many owners now think their homes are worth more than what the market will actually pay, regardless of whether the provision to short let has been granted.
So, if you’re thinking of jumping on board the Airbnb train, know that those lettable properties are now high in demand, and that although Airbnb offers a better return than most other letting options, it also has it’s fair share of risks.