What is Airbnb?

Airbnb is an online marketplace where people can rent out their homes, apartments, or even just a room to travellers looking for short-term stays. It's like a hotel alternative, but often more personal, unique, and sometimes cheaper.

It works as follows:

• the host will list their property (the “property” can be anything from a couch to a castle);
• guests will then browse listings, book and stay; and
• all funds transfers are managed by Air B&B on the online platform.

Why Airbnb is safe

• Secure payment system (no cash deals);
• ID verification is required for many listings;
• Hosts can set rules and security deposits;
• Airbnb has a 24/7 support line for guests and hosts, which includes help if things go wrong (like cancellations or if the place isn’t as listed).

Why opt for Airbnb over long term lease agreements?

There are two main reasons why a property owner might prefer Airbnb over a long term tenant:

• Higher Earning potential - Nightly rates on Airbnb are typically much higher than monthly rent, so even with some vacancies, owners can make more money overall; and
• Flexibility - Owners aren’t locked into a year-long contract, allowing them to pivot based on market trends. They can also block off dates for personal use or maintenance.

Can I use Airbnb income in my home loan affordability assessment?

Maybe, it absolutely depends on the bank’s requirements and the paper trail of evidence you have to show the average income you earn from Airbnb. Breaking the requirements down per bank include:

• ABSA - Income type not considered
• FNB (First National Bank)
  • Confirmation of payment from Air BNB and bank statements reflecting the corresponding deposits.
  • 2 years comparable financials, auditors letter confirming income and ITA34 required.
• Nedbank
  • Might be considered on a case-by-case basis if proper financials including ITA34 are supplied;
  • 6 months bank statements; and
  • Proof of property ownership and zoning certificate required.
• Standard Bank
  • Dependant on credit acceptance and location of the property; and
  • 6 months invoices or applicable schedule; and
  • 6 months banks statements due to variable nature of the income.

Future Rental income

If your property has been empty, or it’s a new property just transferred to you, that you plan to rent out, most banks will now consider future rental income as part of their affordability assessment. Whether you use your existing Airbnb income, or apply for a future rental income amount equivalent to a long term lease is a discussion to have with your mortgage broker.

Use a reputable mortgage broker

Using a reputable mortgage broker ensures you get the most of your biggest financial asset, with competitive rates and relevant advice. Phoenix Bonds is a premium finance broker with over 35 years’ experience in the property finance sector in South Africa.

Phoenix Bonds is more than just a home loan comparison service. Their expertise lies in:

• increasing financial literacy and awareness for their clients,
• ⁠identifying key opportunities,
• formulating intelligent solutions,
• meticulously representing their client’s best interests; and
• facilitating their client’s choices with precision.

For a free consultation around your property finance transaction, fill in your details HERE and an experienced Phoenix Bonds Mortgage Broker will be in touch.