Gearing your property for letting: The power of AirBnB
People love property. It is something that has been engrained into us that owning our own little spot in this world comes with it a major sense of belonging and stability. So it is unsurprising that for most people this is one of their biggest goals in their lives.
Although I don't completely subscribe to this goal, it is something that is very appealing to me. I am very aware of all the extra costs that buying a house take out of you, and the constant maintenance involved with this commitment, but I really don't like the thought of someone else having an impact on my security. Nor does the thought of constant bag packing and Internet crawling excite me too much.
My current situation is this; I bought into a development about a year ago, a small one bedroom flat about 2 minutes away from my work. I have only recently just got the keys in November with the first bond repayments to start in Feb or March. Quite surprisingly the value of the flat is already worth 15% more than the price I bought it at (with a bond) a year later and I still have not paid the first bond instalment yet. I think this is a big positive when it comes to buying from developers. The going rental rate is around R5500 per month before tax and the monthly bond instalments with the current interest rates are R5000. Rates and levies come to about R700 per month. And in will leave it at that.
This is not a buy vs rent post or an argument in favour of one over the other. But I do think it is important to put my thoughts down on what I personally feel would suit my lifestyle and personality when it comes to how I want to live.
I have heard some amazing stories of how people have made alterations to their place of residence in order to generate a second income from it. My mother recently converted her old garage into a simple bachelors flat with everything needed for basic living. The total cost of this came close to R100 000. The result of this means she can have a second income of over R6000 per month.
I recently listed my flat on Airbnb (click here to see my listing). They offer free professional photography to be taken of the listing so that it looks at its best which I quickly made use of within the first week of listing. Within a day I got my first inquiry and within three days I got my first booking. Resulting in a total of 16 days booked for guests in December. One day before the first guests checked in I simply took all my clothes and valuables to my girlfriends house, put other useless items in a locked draw and bought extra bedding and towels that the guests could use during their stay. With December now over I have generated some useful extra money that can be used for the bond. I am sure that other months throughout the year will be nowhere near as active as December, but I do have weeklong bookings already for March and April this year. Bookings will be easier to handle now after the experience I have now gained in December, and the extra income is very much welcome.
There are many examples of this around and some much more successful then could be imagined possible. The key thing is to look for these opportunities to manage the space you own in different ways and make them work for you. Do you have rooms that are filled up by 'stuff' and have very little practical use in your home? Maybe letting out that extra room is something that you would be comfortable doing. People do it all over the world very successfully and some of the most successful Airbnb listings I have seen are single room listings. I have also seen some listings where people have built outside apartments by revamping shipping containers into amazing modern living spaces - an idea I would love to try one day.
So my challenge to you is that if you have land or are determined to buy land some day, ask yourself if this is something you could take part in. Look at what money making opportunities your property presents and go for it.
I would love to hear some of the ways any readers are making money from their property, maybe you are doing some of the things I have mentioned, or maybe you use your home as your office. Let me know in the comments.