Property is often considered to be the biggest investment we’ll make and for most people it also acts as a considerable chunk of their retirement fund.
So, if you’re thinking of buying a second property to let out, if you own a property with empty outbuildings or if you’ve inherited a property, then joining the British holiday rental market could provide a great boost to your finances.
Here are some top tips for entering the market and how to make the best return on your investment from Max Bailey, property expert at Sykes Cottages.
Think with your holiday head
Before you invest in a property, or begin converting buildings, ask yourself: What would I want from a holiday?
There’s little point in paying for a picturesque property if you’ve not researched the area to spot any potential pitfalls, like being very close to a busy road or motorway.
If you think that would turn you off, it’s likely that it will have the same effect on others. You need to think about what the majority of people will want.
Write a list of the top ten things you definitely want your holiday home to have and use this when you’re looking at properties, or if you’re thinking of renovating an existing property.
This could include a good location, being close to transport links or to have period features and an open log fire.
As well as asking friends and family for their honest opinion, turn to the experts and ask a holiday rental specialist for advice. They can give you guidance on the location, what customers typically want from a property of that size and how much you can expect to achieve in rental income each year.
Plan your initial expenses
The obvious and immediate expense will be the cost of the property itself. But renovating, in particular, can be expensive and you may discover unexpected work crops up along the way. This occurs in both new and old buildings – although it’s especially true if you’re buying an older property.
You might not be familiar with the structure of the building so it’s always worth seeking lots of expert help in estimating the cost of work before you sign on the dotted line.
Be prepared for a challenge too – and have faith that it’ll be worth it in the end. Almost every holiday home owner says they loved the experience, despite the hard-work, and would do it all again if they had the chance.
But be sure to keep track of your budget. You can use free online tools to help, Which? offers a handy calculator, or you could create your own excel document to make sure you keep an eye on how much you’re spending compared to your budget.
Tick the right boxes
One of the main reasons people choose to stay in a self-catering holiday home is that they are after the cosy and friendly feel of a home away from home, where they can relax with family and friends.
So focus on what matters most for guests, the features they’ll be looking for such as high-speed wifi, a dishwasher, air-conditioning, allowing pets, an open log fire, a smart TV and off road parking or if you are aiming at a slightly higher market, a hot tub or swimming pool.
You don’t need all of these, but try and have a couple to make your home more appealing. The more you can manage, the more guests you’ll welcome and the more income you’ll receive. Think about this when you’re in the early planning stages.
Get your pricing structure right
Our research shows that letting a holiday home can earn you up to £40,000 a year. Some homes will be popular all year round, others will see seasonal demand, which picks up over the school holidays, in particular over the summer. Either way, January and February are two of the busiest months for bookings – so make sure you have a good pricing structure in place at the start of the year.
The first step is to work out how much you need to earn to cover basic running costs, i.e. heating, electrics etc.
In the long term, furniture might need to be replaced every couple of years so it’s worth factoring in wear and tear into ongoing costs too.
Next, research the competition to find out the rental costs of similar properties. You can also use tools online, such as the Sykes ‘how much could I earn tool’ to provide rough estimates on what you could earn based on the property location. Finally, speak to a property expert to help guide you too.
Get marketing
Many owners we work with let out their holiday homes to extended family and friends, as well as using it themselves, but this can only get you so far. Seeking the help of an expert and signing up with a lettings company gives you access to thousands more potential guests, increasing the number of bookings you get, and income you’ll receive. Access to potential visitors via social media and email activity can be extremely useful. It also gives you some extra support and guidance about how to make your home suitable.
And, remember it’s crucial to get some good quality photos to showcase your property. This is a real must for a successful holiday home.
We support over 6,000 owners at the moment, and have created an industry leading online portal which helps you keep track of your income – allowing you to see when you’re busiest and how much you’ve earned so far.