6% of South Africans can afford to retire.
You need to become inventive about earning extra cash.
How about renting a room to supplement your pension?
So here you are rattling around in your family home. The children have flown the nest. It’s just you and your spouse and three big bedrooms!
The problem is that it’s actually quite hard to get by right now. You would welcome the extra cash, but no-one is hiring – so it’s time to be inventive and creative about how you can avoid financial anxiety.
In the olden days, opening your house to boarders was a common practice. Trends come and go, and renting a room or rooms is now back in vogue, and is a great way to help pay the bills and supplement that pension.
But how do you make sure that your silver is not pinched and that your safety is not compromised.
Take a look at the following hints and tips. Be sure to do your homework to ensure a win-win situation:
What kind of tenants would you like?
Spend some time contemplating what kind of tenants would work for you in your situation – foreign students, tourists, businessmen? Short-term renters, bed and breakfast or long-term lease? Where you advertise will depend on the kind of tenant you are looking for.
List your room on at least two to three platforms
There are several platforms on which to advertise your room or rooms. Listing your property on multiple sites or at foreign/international schools increases the chance that it will be seen and booked. Research and understand the individual site’s rules and regulation as well as the fee structure and the insurance coverage, and choose the platform that suits your circumstances. Airbnb is one of the largest and most popular options, but there are many local platforms, some of which are detailed below:
SafariNow – www.safarinow.com/
Sleeping Out – http://www.sleeping-out.co.za/
Rooms for Africa – http://www.roomsforafrica.com/
SA Venues – https://www.sa-venues.com/
Holiday Find – http://www.holidayfind.co.za/
Foreign/international/language schools – you will need to research what schools there are in your particular area.
Be honest in your description of the room and all of the facilities available. And think of a memorable name for your room/space!
Good marketing is important
First impressions always count. It’s worth considering hiring a photographer to take the pictures of the available room and the house and garden for the platform on which you will be advertising. The right photos are bright and light and show off your establishment in the best possible way.
The rental income you receive should be added to any other taxable income you may receive. The SARS website states: “If an individual rents out a property and gets a rental income, it will be subject to being taxed”. See further details on the SARS website. Click here for further information.
Ensure you have adequate insurance in place
Don’t be caught short by financial loss through damaged or stolen property, or liability issues if a guest is injured on the property. Check out the insurance implications of your homeowners insurance and/or renters insurance with your insurance provider to ensure that you have adequate cover in place.
Spend time on arranging the little things
Little things make a lot of difference when it comes to making someone’s stay pleasant. Create a folder packed with information – a map of the local area, house rules, local attractions, Wi-Fi password, relevant contact numbers, addresses and directions (doctors, restaurants, shops, dry cleaner, where to go for the best breakfast, best coffee, best bar, best hairdresser), emergency numbers. A small fridge with a couple of local beers, a bottle or two of good local wine (provided on a use one, replace one basis) plus milk, coffee, rusks – all of this makes for a happy guest and a good review.
Consider ongoing expenses
Start-up costs are always pricey. However, you will have many ongoing expenses (soap, cleaning supplies and toilet paper, new linen, laundry bills), and of course your utility bills will rise.
Make sure you have the time and the energy to run a rental
You need to be regularly connected to your phone and email to answer enquiries regarding possible bookings. You need to be available to clean the room/s in between rentals. If hosting foreign students, you may need to chaperone them at times.
Be a friendly and engaging host
There’s a fine line when it comes to personal interaction with the guests. Although guests are not expecting a five-star reception, they do expect a good welcome and greeting. Thereafter, give the guest their space – they know where to find you if they have lots of questions. Gut feel plays a part when knowing to what extent you can engage with them.
Pricing your accommodation
Do your homework. Check out the local competition as well as guest houses and hotels in the vicinity. If your price is very low, you may have 100% occupancy, and if you are too highly priced, then you won’t be getting the visitors. Set a competitive price. You can increase the value of your space with additional charges – a South African braai, a tour of the city or a trip to a local place of interest (don’t forget to check out rules, regulations and insurance when it comes to driving visitors around, or being a tour guide).
Reviews are critical
Resolve any issues quickly and competently. Always treat guests politely. Guests don’t expect luxury treatment, but if you go over and above the realms of expectancy, you will earn positive reviews.
Check out your guests
You need to know who you are welcoming into your home. Reviews on most platforms go both ways, so you can turn down a rental if you see a dubious review of a guest. Engage with your potential guest via email or phone calls – your gut instinct will kick in.
Renting out different parts of your home
If you live in flat-land, consider renting out the garage or the carport – this is premium space to some flat-dwellers. You could even rent out a workshop at the back of your property.
And finally, here are some thoughts and experiences from two retirees who have gone the renting route –
Lolly lives in Kenilworth and retired at the end of 2014
“I have been hosting international students for 6 years. The income I made while working enabled me to save more for my retirement. It now supplements my pension. It is a lot of fun hosting these young foreign students. You feel like you can give them a lot with all the experience you have in life, and they in turn give back what youth has to offer – love of life, technological skills and being educated about their different cultures. I have a great relationship with most of my students and my past students write to me from all over the world. Having young people around keeps me young and thinking on my feet . My very first student started a book and in it, he wrote about what it was like to stay with me, and included his photograph in the book. It has become a tradition that all of my students write in the book which has grown to capacity over the past six years and serves as a great memory of all of these young people who have passed through my life, enriching it in more ways than one.”
Elred lives in Kirstenhof and is a part-time retiree
Few will be willing to consider renting out a room in their house. It is, however, a valuable opportunity for additional income as well as for meeting interesting people. Websites like Airbnb facilitate this type of rental where you can list any accommodation from a bed in the lounge to a shared space like a bedroom to a flat or a home. Security is always a concern so there are various levels of verification that you can implement to ensure that the person is identified and known to others. A review system lets hosts and guests post reviews on each other and in this way one creates a record of integrity that can be viewed by potential hosts before agreeing to offer accommodation. Personally, I have rented a room in a flat in Paris through Airbnb and I enjoyed the experience. My hostess was friendly and kind. I also host people in a flat on my property and to date everyone has been the ideal guest. I do believe that travellers understand the rules of staying in someone else’s space and do their best to be clean, quiet and friendly. Of course the experience is enhanced if you, as the host, take an interest in the guests and soon you find you have new friends from all over the world. Try it – new friends and beer money – what more can one want?
Renting a room sounds like a grand idea! Consider giving it a go – you will meet some amazing people, create some interesting experiences – and supplement your pension!
And do share your renting experiences with other YEI readers in the comments section below
– we can all learn from each other’s experiences