If you have ever daydreamed about purchasing a beach house investment and quitting your job, you may be thinking of the ultimate payout without taking any of the hidden costs into account. As the holiday rental market continues to boom, smart investors all over the world are seeing the benefit of short term rentals over long term rentals. In Cape Town, holiday property is in high demand, with many ‘holiday rental ready’ properties on the market that are fully equipped for guests. It’s easy to assume that you will make more profit running your beach house on your own rather than forking out a small commission for a short term property manager.

Sadly however, this assumption is one that ends up costing investors far more than they bargained in the long run. The reality of the short term property business is that, like most things in life, there are always costs involved. From marketing to housekeeping; laundry to damage, theft and even unforeseen disasters, the running costs of beach house investment quickly add up. If you are trying to manage everything alone, these costs can end up turning your dream into a nightmare.

What it Really Costs to Run a Beach House Investment

What does it really cost to manage a beach house investment? Let’s have a look at some of the typical costs you could reasonably expect to fork out over any given month…

• Housekeeping. One of the many, many benefits of working with a holiday rental property manager is that housekeeping and day to day maintenance are included in a set commission fee, instead of handled separately. Do not make the mistake of thinking that you can cut costs by doing laundry and cleaning yourself. You will need to provide your guests with daily servicing, clean linens and towels, adhoc cleaning on demand and assorted other services that ensure a spotless beach house at all times. Once a week vacuuming and bedding changes will not be enough to meet the stringent expectations of international travellers. And it only takes one unhappy guest for your less than spotless villa or apartment to receive poor reviews.
• Maintenance. On top of housekeeping, you also need to consider routine and unplanned maintenance services, such as garden, swimming pool, plumbing, renovations, electricians, painters, rates, refuse and/or recycling collection and any other service that may be required.
• Marketing. You could try and do this all on your own, but if you want to get anywhere in this business, you will need to invest in marketing to promote your property. You could hire a marketing manager, an agency or an intern (depending on your budget), with each of those offering very varied results. Yet again, the most cost-effective solution is to consider working with a dedicated manager who will handle all of your promotion as well as the day to day running of your property, bookings management, concierge and other core services that will help you get the best returns from your short term rental investment.
• Photography. If you want your listings to get ahead, you will need beautiful, professional photographs of your property. While this is a once-off cost, or at least a non-routine cost, it may end up costing a fair amount if you want high quality images.
• Guest Services. Who will be responsible for arranging bookings, interacting with guests, helping with transfers, handling enquiries and dealing with potential problems? You could take on this role yourself, if you do not have a job or have ample guest relations experience. You could hire a receptionist or guest services manager. As this is a full-time job, the costs quickly begin to add up – especially on top of maintenance, marketing and all the other aspects of short term letting.
• Disasters. No one likes to think of the worst happening, but you also need to consider unplanned costs. Theft, damages, wear and tear, natural disasters, blocked drains, leaks, drips, swimming pool issues… there are many, many things that can conceivably happen. While this won’t be a regular cost, it can quickly eat into your profits if anything should go amiss.

_______________________________________________________

What makes the Totalstay approach ideal for beach house investment is that instead of forking out a fortune for various essential services, you have the advantage of a full service property management solution that incorporates everything from marketing to bookings, accounting, management and guest services. This is why managed holiday rentals always fare better than self-managed holiday rentals.

To arrange a free evaluation of your property, simply contact us today. We will then work with you to provide a detailed proposal on your projected net income. For more information on beach house investment the smart way, get in touch today.