In South Africa this trend has gained particular traction along the Atlantic Seaboard. Now, with more flights back in circulation and pandemic restrictions largely a thing of the past, people from around the country are once again descending on the coastline to enjoy a scenic break over the upcoming Easter weekend.
If you’re a property owner or landlord considering short-term leasing, here are seven reasons why it’s a good idea.
Flexibility
One of the biggest advantages of short-term leasing is the flexibility it affords. The duration of occupancy makes it easier to choose when you want access to your property, either to do maintenance or renovations, as well as for times when you choose to block out dates to stay there yourself.
The short-term nature of the arrangement also makes it easier for you to assess the performance of the market. This flexibility allows you to decide if you suddenly want to sell the property due to good moment in the market without having to wait for a lease to come to an end.
Greater potential returns
Short-term rentals allow owners to charge nightly rates. As a result, you can earn more than you would for a long-term rental and adjust rates based on demand, allowing you to maximise on earnings during busy holiday periods or events that bring people to town. During busy seasons it’s possible to earn as much on a nightly rate as you would for an entire week in the off-season.
“Micro apartments have exhibited an incredible investment potential that Sea Point’s short-stay market offers. With an average occupancy of 70% per month and a nightly rate of R1,700, the best-performing Micros at our newly launched SIX ON N apartment block has generated around R48,000 per month, making the purchase of a Micro apartment the perfect entry into the property market – allowing you to potentially turn your rent into savings,” said Jacques Van Embden, CEO at Blok.
Length of season
In South Africa we’re blessed with a warm autumn season, which also happens to fall over the Easter holidays. This makes the coast a very attractive holiday destination for both locals and travellers abroad. And because the warm weather extends well into the year, holidaymakers tend to travel through the peak season into what is still considered the high season that lasts until end of May.
Greater capital accumulation
A short-term rental that is well managed offers owners a higher potential capital appreciation over time. This is because short-term leasing allows for a property to be more regularly monitored and maintained, helping to reduce the risk of damage as well as the faster detection of problems and worsening of an issue over time. The major advantage to this is that the property tends to be kept in a showroom-worthy condition, which is not always the case with long-term rentals. “For example, our clients who made the decision to resell at SIX ON N managed to achieve an average capital growth of 9.9% over the 18-month period – speaking to the high demand and desirability of the area – along with the neighbourhood’s long-term investment potential,” stated Van Embden.
Tax benefit
If you choose to rent out your property as a business, it’s possible to deduct all related expenses. This means everything from rates to repairs, maintenance, insurance and even monthly interest on your bond repayments can be included as potential tax write-offs.
Avoid bad tenants
One of the big benefits of short-term rentals is owners are spared the experience of tenants that overstay their welcome. A long-term lease can often come with a tenant who neglects the property or fails to pay rent — a problem you can avoid with short-term renters.
Convenience
Short-term rental management companies make it easy to lease out a property with relative ease. For a fee, a good company will ensure guests are checked in and the property is well maintained with minimal effort on your part.
