What effect has Airbnb had on the rental market
Airbnb is an extremely popular platform, but not expected to take over the rental industry according to experts. As it caters well to short-term rentals, and property owners who are willing to take over the full-time commitment, traditional, long-term rentals are still a big part of the industry.
While the Airbnb platform rose to the height of popularity soon after its launch in 2008, many property owners who have listed their property on the platform for short-term rental, have switched back to long-term renting. According to Adrian Goslett, Regional Director and CEO of RE/MAX of Southern Africa, while the app drew a few rental owners over to the Airbnb model from the traditional long-term renting model, a number of frustrations have been experienced by property owners.
While not all of the frustrations are only felt by Airbnb users, the platform does leave the work up to the property owners unless a third-party manager is employed. Renting a property on Airbnb is a full-time commitment, where owners are constantly in charge of their properties pricing, checking guests in and out, cleaning and maintenance, and answering guest questions, requests, or complaints.
Time commitment has not been found to be the only issue with the Airbnb short-term letting model though. Due to its popularity, too many properties have entered the system and with an oversupply, prices have inevitably decreased. Quite a number property owners are not getting the kind of income they expected from the venture, and are now putting their properties up for long-term rent or even up for sale.
According to Michael Hauser, estate agent at RE/MAX Living, seasonality and location are also factors to consider before diving into short-term renting on Airbnb, “the summer months are high earning; but, during the winter months your property could be standing empty for large portions of time.” Location is also important. If your property is located within or close to a busy, CBD, such as Johannesburg, it’s likely to be more popular, whereas if it is located in Roodepoort North for example, you’re more likely to attract local, long-term renters.
Airbnb caters for short-term rentals, and property owners who are fully invested in putting in the time, or willing to hire a third-party manager to run their property. For this reason, experts believe the platform will not shake up the rental industry in the long-term, and continue to cater to tourists or South Africans on holiday looking for a short-term stay.
