Buying a holiday home

Ecco

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Jun 4, 2007
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Hi Learned friends,

Been looking for some holiday accommodation on Airbnb for December and noticed a lot of places booked up despite some expensive per night rates. This being KZN coats, north and south.

Does anybody own such holiday apartments? I would like to understand how these things work. Couple of questions below:

If you live in the unit that you rent out:
  • Where do you go when you put your apartment for rent during peak periods?
  • How do you manage to pack all your personal stuff up? e.g. Picture frames, clothes, bathroom stuff etc?
  • Do you find a lot of damage to your furniture etc?
  • Are you renting out only during peak periods (school holidays) or as interest becomes available for the unit?
If you dont live in the unit your rent out:
  • Do you find putting it out for rental allows you to cover you bond costs (and other expenses (rates and taxes, water, electricity, levies etc) or typically you make a loss?
  • If you making a loss, i presume the offset is you get to use the unit when you please?
  • Airbnb is one option to get your unit listed, there are others, any details of what cut they take (others are booking.com or local niche players)?
  • Do you own this with a group of other people? (asking because it would be the only way i could possibly get into this), and i am sure there are tons of issues with this approach - please share details
Trying to understand this market, any insights appreciated.
 
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Ecco

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Jun 4, 2007
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Gran does this, she rents out her beach front flat in Decembers then lives with a neighbour for the duration.

Packs her toiletries, clothes and that's it.

Wow, just that.

I have personal stuff everywhere, cupboards full of clothes, medicine cupboard in the kitchen, pantry cupboard with non-perishable groceries, bedside drawers with stuff, garage tools etc. Would be a mission to pack up all my stuff.
 

AstroTurf

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She lives rather frugally these days, lots of family photos on the walls and decently decorated seaside holiday theme flat but she could pack and go in a couple hours.
 

Ghost64

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Think of all the hotels and b&b you’ve stayed at. Copy that system. No personal property anywhere, just the basics.
 

Pax

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I am not in the market, but a patron of good to very good units (a little pricey, LoL), and I am shocked sometimes to see how destructive other guests sometimes are. People just do not seem to care for a another's property, even in high price places. I think one have to replace equipment and furnishings regularly and have to price accordingly.
 

Ecco

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Jun 4, 2007
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I am not in the market, but a patron of good to very good units (a little pricey, LoL), and I am shocked sometimes to see how destructive other guests sometimes are. People just do not seem to care for a another's property, even in high price places. I think one have to replace equipment and furnishings regularly and have to price accordingly.

I have always taken care of the places i rent, but if i lived in the same place i was going to be renting, this would be one of the big concerns
 

jun_tao

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Jun 24, 2012
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My gf's sister and bf do this. In Dec, they store all their personal stuff in the storeroom downstairs. Whip out the cheap Mr price cups, and go stay with the parents. Pre covid they were making a pretty profit, even become super hosts.

They do say if you do this, you cant be attached to your stuff. One time their bed was broken, another time kid took a marker to their wall.
 

juBa

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Nov 24, 2011
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Great questions, coincidentally I just got back from a weekend in umhlanga and was seriously considering investing in a holiday flat, which will be rented out most of the time (except my families weekends there)

Can anyone share any information on the income? (Enough to cover bond etc?)

I know there’s estate agents that take a percentage of the booking income but then they handle everything (listing on Airbnb, booking.com etc as well as daily maintenance)

Thanks
 

Ecco

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8,168
Great questions, coincidentally I just got back from a weekend in umhlanga and was seriously considering investing in a holiday flat, which will be rented out most of the time (except my families weekends there)

Can anyone share any information on the income? (Enough to cover bond etc?)

I know there’s estate agents that take a percentage of the booking income but then they handle everything (listing on Airbnb, booking.com etc as well as daily maintenance)

Thanks

I don't thing too many have invested in a holiday flat which they exclusively rent out.

I am doubting the costs of the bond and other expenses get covered. So it's a loss making business, but if you making use of the unit then that's the benefit you get.

As a side topic, Umhlanga rate in December, are really high compared to last year December...with travel restrictions I guess they trying to capitalize on local holiday makers
 

Gaz{M}

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AFAIK you can claim damages from guests on AirBnB if you have evidence etc to log a case.
 

Other Pineapple Smurf

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Have not taken ownership yet of our holiday flat but we will be renting it out short stay next year. My wife and I did agree on some rules first:

* We must never assume it will make money.

* Upgrades to the property must all be funded through rental, no debt - so upgrades like aircon, stainless steel braai and even SmartTV can only be done once money is in the bank.

* We will not rent out during our family holidays but we will do a swap for similar accommodation as we bought for family holidays, not investment.

* No one night stands - we will rent out per week. The place is an hours drive from us and not worth it to check someone in/out in person for one day.

* Use a local cleaning company to clean the unit before and after booking. This will be charged as a cleaning fee.

* Word of mouth rentals at first - already have a dozen interested people.


All these rules we set ourselves have come from the experience and advice of everyone we have spoken to.

(Edit)

The cost of the flat is R4K per month for bond, levies and rates. It's a 48m2 bachelor flat. Rentals in unit are currently under stress and at R4500pm.

The current area, Kleinmond, charges R300 per night out of season for a similar unit. For December, R600-R1200 per night.

Worth doing research now with low prices.

*December pricing per night*
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juBa

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Nov 24, 2011
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I don't thing too many have invested in a holiday flat which they exclusively rent out.

I am doubting the costs of the bond and other expenses get covered. So it's a loss making business, but if you making use of the unit then that's the benefit you get.

As a side topic, Umhlanga rate in December, are really high compared to last year December...with travel restrictions I guess they trying to capitalize on local holiday makers

Yes def like you said. Would like to buy one in order to have a few weekends away per year with friends and family and then rent it out the rest of the time.

For example the place I stayed at over the weekend cost me R7k for four nights. The place is a two bedroom apartment, not directly on the beachfront but in a very good location with easy access to restaurants and the beach. Similar places are valued at around R2.5mil online.

I also heard that December rentals could equal 2-4 normal months of rent income. So that’s interesting if that would cover the shortfall on the bond over the quieter months.

I will update here if I manage to get more info
 

Tman*

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Jul 18, 2012
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Being a landlord can be a full time job. It Can work as long as you live close enough to manage, or if you have someone that is reliable to do it for you.

Trying to run a rental in durban while you sitting in jhb will end in disaster.
 

beefymoocow

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Jun 19, 2006
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I bought a holiday home last month. Admin isn’t too bad but I pay the hostess quite of bit of commission. Weekend rentals aren’t too bad but struggling to get midweek rentals. Gonna try target the work from home peeps and try make it more WFH friendly like WiFi and going off the grid with longer autonomy.

In terms of profits. It’s not bad I’m able to pay my levies and alittle to the interest charges.

 
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