Real Estate Investor Magazine South Africa July 2013 | Page 62

STRATEGIES

BY ANGELIQUE REDMOND

Turning your Home

Into a holiday home

R

enting out your house for a short period
of time, either during the tourist season
or during a worldwide event, like the
Olympic games, is becoming more and more
popular and there are now even websites on
the Internet dedicated solely to this endeavour.
While it can be a great way to make some extra
money, there are risks associated with it.

The risks
When you are looking for a long-term lease, you
do extensive background checks on potential
tenants, but with a shorter lease, sometimes
you don’t have the opportunity to do your due
diligence. Without the proper check, you have
no idea who you are letting into your home.
If you are renting out your house, even for a
short period of time, you may have to get a new
insurance policy, which will cover your renters.
This will raise your insurance costs and you will
need to figure out and factor in the costs when
deciding if it’s worth your while.
One of the biggest risks to renting out your
home for profit, is your belongings will be left
behind. Any documents or personal items you
leave behind are exposed and susceptible to
theft by criminals posing as short-term renters.
Depending on the documents you leave behind,
someone could extract enough information to
impersonate you and run up debt in y our name.
60

July 2013 SA Real Estate Investor

If you are going to rent out your home for a
short period of time, lock up or remove all your
sensitive information.

here is a major social revolution which could
help tourism and many families keep af loat
through the next four or five lean years.”

During a financial crisis

Also increasingly popular, says Rawson, are
systems whereby families exchange homes at no
cost to either. This, too, he says, is helping to
keep the tourist trade alive.

As has been widely reported, Greece, Italy,
Spain, Portugal and Cyprus have been especially
hard hit by the current Eurozone and US
financial problems and this has caused major
unemployment in these countries - and a serious
decline in most property values. There have, of
course, been some exceptions, such as central
Paris, central London, Brussels and Monaco,
but the majority of Eurozone homes are now still
struggling to get back to 2007 values.

How have hard pressed bondholders
in these areas responded to the crisis?
Bil l Rawson, Chairman of the Rawson
Property Group, says that one of the trends
reported back to him by colleagues living in
Europe is that in the more popular tourist areas,
many people, particularly young couples, have
been prepared to move out of their homes and
to live with friends or family for part of the year
– and then to rent their properties out on shortterm leases to visitors.
This, says Rawson, has proved a huge blessing
to the tourist industry because tourists are now
able to hire complete homes or apartments for
as little as R500 per day. “What we are seeing

Says Rawson, “The secret of success is to tap
into an already busy holiday renting agency or
to advertise in carefully selected overseas media
on your own. Recent reports indicate that the
rentals obtainable on short-term holiday leases
can be very satisfactory indeed, especially if these
are in golf estates or on the Atlantic Seaboard. It
looks very much as if there is a growing trend for
homes to be made available for several months
a year while the owners revert to dual living or
other means which enable them to vacate their
homes for two to five months.”
While short-term renting is not for everyone it
can be a quick fix in a time of crisis and provide
capital when you desperately need it, but there
are significant risks to opening your doors to
strangers and you need to consider the pros and
cons carefully before making your decision.

RESOURCES
Global Property Guide

www.reimag.co.za