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- Airbnb recently launched 'Airbnb Rooms', allowing hosts to rent out individual rooms in their homes.
- It opens up a new opportunity for SA homeowners to make additional income from the houses they live in.
- But there are key things to consider before entering the Airbnb market, such as tax declarations and insurance.
- For more stories, visit the Tech and Trends homepage.
At the beginning of May, Airbnb announced a slew of new features and updates for the app.
One of the main announcements was the introduction of Airbnb Rooms - an all-new take on the original experience of the platform.
The feature, which was introduced to make the experience of a particular destination more affordable, allows hosts to rent out individual rooms in their homes.
It’s not something users weren’t able to do on the app before, but as of this month, the e-commerce giant has gone big on the idea, giving it its own tab on the app and introducing 'Host Passports'.
Host Passports share some information about the host, so that a visitor can know who they'll be sharing a space with.
Additional income needed as cost of living surges
As the high cost of living continues to put pressure on South Africans' wallets, Airbnb Rooms offers a unique opportunity to make some extra money in the home that one lives in.
Private rooms are the third most-booked category on Airbnb, and 39% of hosts said they use the money they make from the platform to cover the rising costs of living, while two-fifths said they use it to make ends meet.
Africa Bank's 2023 Consumer Research Report revealed that - in addition to relying on a salary from full-time or part-time jobs - 27% of South African adults said they rely on side hustles for extra income.
The report said:
A new report by Deloitte echoed a similar sentiment, adding that the top societal concern for Gen Zs and millennials is the current high cost of living.
As it goes, it seems a high number of citizens in the country are seeking out ways to supplement their primary sources of income.
While Airbnb Rooms is a good way to make the most of one's available space and make some money while doing it, there are a few things to consider, including the criteria a host needs to meet for Airbnb Rooms, and remembering to declare short-term rental earnings with the taxman.
- The guest has to have their own private bedroom, with a door;
- The guest has to have access to a private or shared bathroom;
- The guest has to have access to at least one common space, such as a kitchen, living room or garden;
- Hosts must use their own name on their listing, rather than a business or other name;
- "Private room" must be selected as the listing or room type in your listing settings; and
- The private room is not a shared room, hotel, resort, tent, camper van, standalone unit (such as a garden annexe) or any other type of property on this list.
Make a short-term lease agreement
With all this said, Just Property CEO Paul Stevens reminds us that there are risks associated with letting people stay on your property.
One of the key risks he highlighted is a scenario where the guest refuses to leave after the duration of their stay - a scenario he reckons only a few hosts consider.
"Sadly, many owners have subsequently discovered that this is not uncommon, so besides being adequately insured, hosts must know where they stand with regards to the law," he says.
READ MORE | The shared anxieties of Gen Zs and Millennials right now
According to the managing director of property law firm SSLR, Cilna Steyn, the Prevention of Illegal Evictions from and Unlawful Occupation of Land Act 19 of 1998, would not apply in the case of an Airbnb rental because "the intention of the agreement is not for the 'guest' to reside on the premises".
However, Steyn advises that hosts create a full and in-depth lease agreement, even though it might feel like a bit much for a short stay.
"Make an effort to get the best legal advice you can afford, ask a professional letting agent for advice on vetting prospective 'guests', and have them look over your lease," she said.
The taxman needs to know
Income made from Airbnb needs to be declared to the South African Revenue Service.
Sohail Govender, the finance director for Just Property, advises hosts, who haven't been declaring their Airbnb income, to do so sooner rather than later.
"I worry that there are many hosts in the informal sector, who are not aware of the income tax requirements, not to mention capital gains implications," he said.
But it's not all doom and gloom.
Govender added that things like rates and taxes, bond interest, advertisements, estate agent fees, homeowner's insurance, garden services, repairs associated with the rented area, security and property levies, cleaning, Airbnb fees - and a wide range of other services required to keep your business going - can be claimed as deductions.
