(4 of 10) How do you protect your interest and are guests qualified before they stay in my house?

Let me start by saying that the Cape Town self catering market is massive. We have the ability to offer 3000 places and counting. I am saying this to show that many people are making lots of money already and they would not be in the market if it was a risky business. Another question: Why would this one bedroom part of seven, going for R10 000 per night, or this Clifton home at only R150 000 per night, be in the business if it was a risky business?

How do you protect your interest?

  1. You need an effective terms and conditions, and indemnity clause, including a cancelation policy.
  2. You should consider third party liability insurance.
  3. Keeping a breakage deposit a very effective deterrent as it discourage people to do things they should not do. A breakage deposit will never cover all your valuables but it works.
  4. Screening your potential guests. This is relatively easy with social media as you can get the most important info on your guests.
  5. Your guest pay all the money before they arrive (we get 50% when they book and 50% four weeks before arrival).
  6. Many owners are familiar with long term rentals, but short term is completely different. Short term guests do have their own places where they live and work. They want to go home after their stay. Long term guys, on the other hand, want to pay for a month and then pay as they stay. Long term guys have a very different mind set and the fact that they don’t pay all the money upfront makes them a risky proposition compared to short term guests.

Next we will look at what income can you expect?