S'pore homes open up to short-term rentals

		Saturday, Oct 01, 2011 The Business Times (Singapore)
S'pore homes open up to short-term rentals
By Debbie Yong A NUMBER of homeowners here are opening up their homes - for a small fee - to strangers on a daily basis. Though the idea is not new in the US and Europe, the short-term home rental trend has taken root so quickly in Asia that several major short-term room rental websites have set up outposts in Singapore in an effort to venture East. Says Ng Wei Leen, vice-president of Asia for German short-term rental website 9flats: 'Though I don't see Asia's growth outstripping that of Europe and the US yet, I expect our potential peak to be higher than theirs.' Since setting up less than a month ago, 9flat's Asian office has already garnered about 100 listings in Singapore and 500 throughout the region. Likewise, competitor portal Wimdu expanded here in May, just a month after the business was founded in Germany. It has 150 local listings so far and more than 5,000 in Asia. Says co-founder Steven Kim, who runs the Singapore-based South-east Asia office: 'It's hard to find a decent place in Singapore around the $100 per night mark. You will probably end up with a small hotel in a not-so-nice neighbourhood. With rented apartments though, you get much more space and sometimes even a proper kitchen, which is good for large groups or those with young children.' Prices for a room in Singapore on such sites run the gamut from US$15 per night for a shared room in an HDB flat to US$800 per night for exclusive use of an entire 2,250 square foot penthouse condominium in Newton. Most sites take a cut - typically 12-15 per cent - of the room's daily fee. According to Mr Kim, Singapore hosts are typically retirees with empty nests or childless young couples with an extra bedroom. Adds 9flat's Mr Ng: 'We find that many of them are multi-cultural and worldly wise. They have enough savings to purchase an extra home as an investment, yet are young and savvy enough to consider listing it on an 'alternative' rental website like ours.' While hosts are free to set the daily rates for their home, Roomorama recommends that homeowners charge about 30-40 per cent less than hotels in the area. They are publishing a guide to be released this month with pricing by area for homeowners to use as a reference. 'If you are trying to attract a high-end audience, you will obviously want to set a higher price for your home,' says Roomorama's co-founder, Singaporean Teo Jia En, who started the outfit three years ago when she was living in New York. The website branched out to include Asia-based listings in January. Roomorama is the 'grown-up version' of its competitors, says Ms Teo. 'There is a lot of trust involved in renting out your property, so we didn't want to attract the backpackers and younger travellers who have a limited budget and might end up trashing your place. Our travellers are those who can afford to pay for the local experience, like walking down the street in the neighbourhood to observe the local culture.' Unlike in the US, Ms Teo notes, many listings in Singapore are in fact homeowners' second or third properties, which they entrust to their property managers to oversee. They get higher yields on daily rate than on a monthly basis. Wimdu's Mr Kim also notes that while a larger volume of homestays are transacted at a greater speed in Europe than in Asia, Asian hosts 'tend to stick around'. 'Some may have initially came on guests,' he says. 'We're very much about the local touch.' board to make money, but they gradually change their attitude after hosting their first guests. Quite a number have taken on the role of ambassador of Singapore when receiving Each of Wimdu's 50 local offices has about two to four staff who try to stay with prospective hosts before they start taking on guests. 'If you're there for just 30 minutes, you're not going to see problems in the bathroom or bed when you walk around,' Mr Kim explains. The site also plans to hold regular events for hosts to meet up and share their experiences. In their first session in July, about 15 to 20 of the site's most active hosts came together to review the website for technical glitches and to share their concerns over issues such as security. 'We have a thorough system of checks in place to filter out anything suspicious; it's not a purely automatic process,' says Mr Kim. Like all the other sites, payment on Wimdu is made online through credit card or Paypal, and both parties' contact details released to the other after the transaction is completed. 'The situation of handing over cash is always awkward. The website helps to take that out so the focus is purely on the relationship rather than the money,' says Mr Kim. Following an incident in July when an AirBnb visitor vandalised a San Francisco homeowner's apartment and stole her personal items, the website promptly put in place an insurance scheme that allows homeowners to claim up to US$50,000 in damages. 9flat's homeowner protection plan, at 500,000 euros (S$875,000) and backed by Zurich Insurance, is the largest in the industry, while Roomorama and Wimdu both say they are in talks with insurance companies for similar plans. Says Chen Ji Chang, 43, who rents out a room in his condominium penthouse in Choa Chu Kang for US$120 a day through 9flats: 'It's a form of extra income for us but we're not treating this as a business. I have a three-year-old daughter who stays at home with our helper all day and it would be nice to have someone else at home for her to socialise with. 'We hope to meet people that we can eventually swap homes with on our future trips.'