A growing income opportunity

Most owners of second homes or holiday homes are unable to utilise these all the time and an opportunity exists to earn an income whilst these homes are not in use, this income is usually sufficient to cover the annual costs of ownership and can often be a very lucrative opportunity.

It can also free up an opportunity for the owner to holiday elsewhere and offer his family an alternative. As an example, rent out your home this Christmas and use the income for a trip to Mauritius knowing that your home will be professionally cared for.

On the other hand, many holiday makers are looking for a relaxed family holiday and often find traditional holiday establishments such as Hotels unsuitable, perhaps either fully booked or prohibitively expensive, particularly over the holiday season. Renting a private self-catering holiday home gives the family many options in a relaxed home-from-home environment. It makes sense for these two markets to find each other and co-exists on a mutually beneficial basis.

Be careful! Suggests Alan Hawkins, CEO of Staysa (Pty) Ltd. one of South Africa’s’ largest accommodation rental organizations.

Staysa is recommending to owners who make their homes available for rental to set fair prices that are market related and not to make unreasonable demands on tenants. Whilst the season has been very successful to date with bookings approximately 35% ahead of the previous year, a price resistance was certainly felt along the coast.

Mr Hawkins says that “days rented” were much higher than a year ago but his agents have reported that the average length of stay was shorter than previously experienced. Staysa.co.za is the largest holiday home rental organization in South Africa and Mr Hawkins believes that the market is young and well positioned to grow over the next few years as we head toward the soccer world cup in 2010. More and more owners are realizing that their homes are able to generate income whilst not being used by the owners themselves.

“We need to remember that the SA Rand has weakened over recent months and this has reduced the cost to international visitors and also made international travel from a South Africans’ viewpoint a more expensive option. This has opened up opportunities both to home owners and to local holiday makers to make use of this wonderful holiday option.”

Mr Hawkins also reports a very successful year on from the Bed and Breakfast section of their web-site with many of the local guest houses having enjoyed a successful season with inquiries still flowing in all the time. Mr Hawkins says that the internet remains a growing marketing tool, as an example, their web-site enjoys a growing number of new visitors each day with inquiries from all corners of the globe. Based on their growth in the Eastern Cape and the Garden Route areas, staysa.co.za is now expanding into KZN and the Cape Peninsula. This expansion has already led to inquiries from the international clients, some of which enjoy spending perhaps a week in Cape Town and a week along the Garden route.

Home rentals offer an opportunity for owners to earn income, “Why not” he says, as long as you are dealing with a professional organization and the process is efficiently managed in accordance with good procedural systems. It is actually quite simple and relatively risk free. From the home owners’ viewpoint, a professional rental company will manage the full process for an absentee owner.

Tenants are reference checked and the full process is managed efficiently from the collection of deposits, the completion of legally binding contracts right through to departure. This can be a completely hands-off process for the owner. The critical element is knowing that their home is being cared for by a hands-on professional, most owners live elsewhere and need to be able to entrust their home to the local agent.

The growth in this market stands to benefit more people than just home owners and their tenants; Mr. Hawkins believes that by increasing the occupancy of the empty homes, the local service providers and tourism related activities will benefit from the natural spending power of the visitors.