Using an existing property as a holiday let
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.
Investing in a new property
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.
5 things to think about before making a holiday home investment
- Location – Location plays a pivotal role in the success of a holiday home. Choose a destination that attracts tourists throughout the year and offers a range of activities and amenities nearby. Here’s why we believe St Andrews is the best place to buy a holiday home.
- The type of property – Different types of property offer different benefits to the holiday maker. Consider between beach front homes, holiday cottages in the countryside, properties on a lake or loch, ski chalets, city or town apartments, historical buildings, golf course accommodation, eco-friendly properties and unique architecture.
- Do your market research – Conduct thorough market research to understand the demand and rental potential of holiday homes in your chosen location. Analyze the trends, occupancy rates, and rental prices to make an informed decision.
- Financial planning – Calculate your budget carefully, taking into account the initial purchase cost, ongoing expenses (e.g., maintenance, insurance, taxes), and potential income. Ensure that the investment aligns with your financial goals and risk tolerance.
- Property management – Consider how you will manage the property, especially if it’s located far from your primary residence. You can opt for self-management or hire a property management company to handle bookings, maintenance, and guest interactions. Here’s what to look for in the best letting agents.
Are holiday homes a good investment?
Here are 4 main reasons you should consider holiday home investment:
- Personal use – Owning your own holiday home means you have a private getaway, allowing you to escape the hustle and bustle of everyday life whenever you desire.
- Rental Income – Renting out your holiday home during periods you’re not using it can generate income to offset expenses and will contribute to your overall household income.
- Appreciation Potential – Depending on the location and market conditions, holiday homes can appreciate in value over time, offering the potential for capital gains if you decide to sell in the future.
- Diversification – Investing in a holiday home can diversify your investment portfolio, spreading risk across different asset classes.
The benefits of setting up a holiday let business
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 | What you’ll need
Starting a holiday let business involves several key steps. Here’s what you’ll need to do to set up your business successfully:
Legal and Regulatory Compliance
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.
Property Management Services
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.
What running a holiday let involves
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.
Check-in and check-out procedures
Establish smooth check-in and check-out procedures for guests, providing them with all necessary information and support during their stay.
House rules and guest guidelines
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.
What do I need in my holiday let?
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.