Our holiday letting management experts are here to help you get started in holiday home investment. Let’s explore the steps to take, the considerations to make, and the benefits that await in the world of holiday letting.
The first question to address is whether you should buy a holiday home at all.
Will you use an existing property you already own or invest in a new one? Both options have their pros and cons. Let’s explore this in more detail.
Our goal is to provide holiday home owners with valuable insights, tips and advice, from deciding whether to buy a holiday home to understanding the essentials of starting and running a successful holiday let business.
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Many often wonder whether they can rent their home as a holiday let. The answer is yes. With a few alterations you can begin using your home as a holiday let.
Using an existing property is, of course, cheaper and less time consuming because you don’t need to find a new property to invest in and potentially refurbish.
However, this option may not be suitable if the property is located in an area with low tourist demand or if it doesn’t align with the amenities and features that holidaymakers seek.
Consider your location and the type of property you currently own, would you go on holiday there? Would you feel all of your holiday requirements are met by your current property? We will discuss running a holiday home, the requirements and what should go into your home in more detail later in this article.
Purchasing a property specifically for holiday home investment allows you to choose a location and design that caters to your ideal target audience.
The closer the design, location and amenities are to your target audience’s preferences, the higher the appeal and potential rental income you will make from your holiday let property.
This can increase the property’s appeal to potential guests and potentially yield higher rental income. On the downside, buying a new property involves higher upfront costs, taxes and ongoing expenses.
Here are 4 main reasons you should consider holiday home investment:
Running a holiday let business offers benefits such as increasing your income potential, giving you holiday flexibility, tax advantages and improved networking opportunities. Let’s explore these in more detail.
A successful holiday let business can provide a steady stream of income, especially during peak tourist seasons.
As the owner, you can decide when to rent out your property and when to keep it for personal use, allowing you the flexibility to plan your holidays in advance.
Holiday home owners can make business related deductions such as mortgage interest, maintenance costs, utilities, refurbishments and any other costs related to running your property as a holiday let. Operating a holiday let business allows you to connect with other property owners, local businesses, and the tourism community, expanding your professional network and making some friends along the way!
Starting a holiday let business involves several key steps. Here’s what you’ll need to do to set up your business successfully:
Understand the local laws and regulations concerning holiday let businesses. Complying with these legalities is crucial to avoid fines and penalties. In St Andrews these include applying for a Short Term Let license from Fife Council, part of which is ensuring all safety standards are met in terms of gas, electric and fire safety.
Develop a marketing plan to attract potential guests. Utilise online platforms such as Airbnb, Booking.com, VRBO, Expedia, social media, and professional photographs of the property to showcase its unique features.
Set competitive rental prices based on market research, seasonality, and the property’s amenities. Consider offering discounts during off-peak seasons to attract more bookings. Also consider using pricing software to optimise your pacing over the year.
Decide whether you’ll manage the property yourself or hire a property management company, like St Andrews Property Co. A property manager can handle tasks such as regulatory compliance, marketing your property, liaising with guests and enquiries, cleaning snf property maintenance. It’s important to assess the level of service in an area to make sure you will be covered all year round.
Running a successful holiday let business requires effort and attention to detail. Here are the primary aspects involved in managing your property/
Regularly maintain and upgrade your property to ensure it remains appealing to guests. This includes addressing repairs, updating furnishings, and keeping the property clean and well-maintained.
Promptly respond to guest enquiries, bookings, and concerns. Excellent customer service can lead to positive reviews and repeat bookings.
Establish smooth check-in and check-out procedures for guests, providing them with all necessary information and support during their stay.
Set clear house rules and guidelines to maintain a pleasant environment for guests and to protect your property. Preparing a detailed digital Guest Information folder is crucial to provide the guest with all the information to enjoy their stay.
Here is a brief overview of what your holiday let should have to maximise holiday maker satisfaction:
1. Comfortable Furnishings: Invest in quality, comfortable furniture and bedding to ensure your guests have a restful stay.
2. Well-Equipped Kitchen: A fully equipped kitchen with essential appliances and cookware allows guests to prepare their meals, saving them money and providing a homely experience.
3. Internet and Entertainment: Offering reliable internet access and entertainment options such as a TV, DVD player, or streaming services can enhance the guest experience.
4. Outdoor Spaces: If your holiday home has a garden or outdoor area, furnish it with seating and recreational equipment to make the most of the location’s natural beauty.
The potential rental income depends on various factors, including location, seasonality, property size, and amenities. Conduct market research to estimate the rental potential of your specific property.
Yes, it’s essential to have appropriate insurance coverage for your holiday home. Standard homeowner’s insurance might not adequately protect your property when it’s used as a holiday rental. Look for specialised holiday let insurance that covers potential risks related to guests and rentals – Discover holiday let rules and regulations
Hiring a property management company can be beneficial if you prefer a hands-off approach to managing your holiday home or if you live far from the property.
A reputable property management company can handle various tasks, including advertising the property, screening guests, managing bookings, handling check-ins and check-outs, and coordinating maintenance and repairs. This can save you time and effort while ensuring that your guests have a positive experience.
It’s important to note that whilst there will be a cost associated with hiring a property management company, their expertise in the local area, the utilisation of pricing software to maximise revenue and the constant availability to respond to queries will be invaluable.
Typically, they charge a percentage of the rental income or a flat fee for their services. Before hiring one, carefully assess their fees and services to ensure that it aligns with your budget and requirements.
Handling bookings and payments is a crucial aspect of running a holiday let business. There are several ways to manage this:
Direct Bookings: You can manage bookings directly by creating a website for your holiday home or listing it on vacation rental platforms. Direct bookings give you more control over the process and allow you to build a direct relationship with guests.
Online Travel Agencies (OTAs): Consider working with popular OTAs such as Airbnb, Booking.com, VRBO, Expedia etc. OTAs will expose your listing to a vast audience of potential guests. Keep in mind that these platforms may charge higher fees and commissions.
To streamline the booking and payment process, use a reliable booking management system or calendar that synchronizes across all platforms. This way, you can avoid double bookings and efficiently manage reservations.
To collect payments, set up with a payment gateway such as Stripe or Paypal. This allows you to take bookings from anywhere on the internet.
Providing an exceptional guest experience is crucial for receiving positive reviews and encouraging repeat bookings. Here are some tips to ensure guest satisfaction:
Communication: Respond promptly to guest enquiries and messages.
Make sure to provide clear instructions for check-in, check-out, and any essential details about the property prior to their arrival, and preferably instantly at the time of booking.
Cleanliness: Ensure that the property is spotless and well-maintained before each guest’s arrival. Professional cleaning services can help maintain a high standard of cleanliness.
Guest Amenities: Consider providing extra amenities to enhance the guest experience, such as welcome baskets, toiletries, and a guest guidebook with local recommendations.
Helpful Information: Offer information about local attractions, activities, and dining options to help guests make the most of their stay.
Accessibility: Be available during the guests’ stay to address any questions or concerns promptly. Providing a contact number or email for guest support is essential.
Holiday home owners can make business related deductions such as mortgage interest, maintenance costs, utilities, refurbishments and any other costs related to running your property as a holiday let. There will also be property taxes, income tax on your earnings and potentially capital gains taxes if you sell the property. It’s essential to consult a tax professional to understand your specific tax implications to ensure compliance.
Regular maintenance and timely repairs are crucial for maintaining the quality of your holiday home and ensuring guest satisfaction. Consider the following:
Scheduled Maintenance: Create a maintenance schedule to address routine tasks such as gardening, window cleaning, boiler servicing and pest control to name a few.
Emergency Repairs: Have a plan in place to handle emergency repairs promptly. This may involve having reliable contractors on call or utilising a property management company with emergency support.
Property Inspections: Conduct regular property inspections to identify potential issues early and address them proactively.
Guest Reporting: Encourage guests to report any maintenance issues during their stay, allowing you to address them promptly.
Remember that owning a holiday home is not just a financial investment but also an opportunity to create lasting memories and experiences for yourself and your guests.
With proper planning and dedication, your holiday home can become a beloved destination for travellers, offering them a home away from home and a place to create cherished memories for years to come.
Get in touch with us today to arrange a free consultation at our St Andrews office or at your property. You can call us, complete the enquiry form below and we’ll be delighted to help.
