Holiday let business costs & how you may reduce them

There are lots of different holiday let costs to consider when running a rental business. Understanding these can help you budget but also plan if your needs as a holiday let business owner change over time. In this article, we discuss the main costs of running a holiday let, with approximate 2025 prices to help get you started.

Holiday let changeover costs

Holiday let agency costs

Holiday home furniture and decor costs

Insurance costs

Utility and subscription costs

Booking platform fees

Marketing and advertising costs

Home maintenance costs

Safety checks and servicing costs

Tax & accountancy costs

Tips for assessing potential holiday let costs

How can bring I down holiday let costs? 

Key takeaways

Holiday let changeover costs

Typical holiday let changeover costs are primarily those incurred during guest stays. The approximate cost for these areas can be found below:

• Cleaning equipment and materials: £100 + for set up costs and £20 ongoing monthly costs.
• Hiring a cleaning service: Between  £10-20 an hour or £50-£200 for a full clean.
• Guest supplies: From £10 to £100 + according to the type of booking.
• Laundry: Between £15-150+ depending on much laundry needs to be done. 
• Welcome packs: Between £10- £100 + depending on how luxury you want them to be. 

We discuss these in more detail below.

Cleaning costs

If you are intending to do the cleaning yourself, you will need to account for both setup and ongoing costs:

• Setup costs: Hoovers can cost anywhere from £80 or cheaper to top of the line models that can cost significantly more. You may also need to factor in equipment such as mops, dustpans, brushes and a duster. These additional items could approximately cost around £50 + at the budget end. You may be able to find cheaper deals online.
• Ongoing costs: Items such as cloths, scourers and cleaning fluids are likely to be ongoing regular costs. Expect to pay approximately £20 + minimum to replace these items, which may be monthly if having regular guests.

You may also want to factor in replacement costs for when certain items break down. If you do not have a lot of time, live further away or want cleaning done by a professional, a cleaning service may be a better option. It will however come at a considerably higher cost. For more tips about the cleaning process itself, check out our holiday let cleaning checklist guide.

Costs of hiring a cleaning service

The costs for hiring a cleaning service  will vary according to a number of factors such as:

• Property size: Larger properties with more rooms will take longer to clean than smaller ones with less rooms and cost more. 
• Locations: Like many services, the prices for cleaning services may vary across the country.
• Type of clean: A deep clean may be needed less often but will likely cost more money as they are more intensive tasks. Regular cleaning sessions may cost less per session. 
• Laundry: A laundry service typically comes in at an additional cost if this service is provided. A larger property with more bedsheets to change is usually going to cost more than one with less rooms and beds.

The type of cleaner may also impact the price you pay, with independent contractors usually costing less than cleaning companies. Factor in the hourly rate and how often you will need these services. For example, if you needed 5 hours of cleaning at an hourly rate of £10, that would cost you £50 a week. To get an exact figure, compare prices in your area.

Guest supply costs

Depending on your accommodation, you will also need to factor in the cost of replacing regular guest supplies. These could include items such as:

• Toilet rolls.
• Washing up liquid.
• Washing up sponges/scourers.
• Soap.
• Shampoo.
• Shower gel.

At the budget end, you may be able to pay just £10 or less per booking. Costs may stack up if you decide to provide more luxury items for guests.

Welcome pack costs

Welcoming your guests with a pack containing useful information or even gifts are a great way to give them a good first impression of your property. There is no one size fits all approach when it comes to welcome packs, however. Examples of potential welcome pack items can range from:

• Biscuits and treats.
• Drinks
• Fruit.
• Thank you cards.
• Local information.
• Property and safety information.

Tailor your welcome packs to the type of guests you are trying to attract. For example, a no frills stay attracting guests that want a cheap booking may cost no more than £10-20 if basics such as biscuits, coffee/tea and cheap snacks are only included. At the higher end, you could spend up to £100 or even more if charging higher booking prices. Items such as alcoholic beverages, luxury soaps or bespoke snacks are potential ideas that could delight your guests but will cost more money.

Holiday let agency costs 

Getting a holiday let agent to manage your holiday let property will come at an extra cost but it can also free up considerable time. Typical costs associated with holiday let agents include:

• Startup and join costs: This can typically cost anywhere from £100-£250 and is the initial fee for signing up with a holiday let agent (if they charge one). The costs associated with this can involve anything from taking photos of the property or setting up the initial listing.
• Commission fees: Holiday let agents usually charge a percentage fee per booking. This can often range from approximately 15-25% per booking. Sometimes management fees may be bundled in with the commission to cover extra services like cleaning and support. This may make the fees higher.
• Management fees: Some agencies may charge a separate fee for additional services, with the fees being higher depending on how much help is required. The fees for this may vary quite a lot depending on the service provided. A simple maintenance callout may cost a small fee whereas cleaning or laundry fees will likely cost a lot more on an ongoing basis.
• Annual costs: Similar to a setup fee, some agencies charge an additional fee every year to cover the costs of ongoing tasks such as keeping your listing up to date and maintaining up to date photos. This can typically cost in the region of £100-£250 per year. 

It is important to note that the fees each agency charges will be different. Some may present fees as separate costs, whilst others may combine everything into one ongoing fee. Some may not charge for things such as annual fees and not all services provided will be the same. Compare more than one agency when looking at prices and budget accordingly. 

Holiday home furniture and decor costs

Furnishing and decorating a holiday let can range from relatively cheap to very expensive depending on how much you want to put into it: 

• Painting: The cost of painting yourself could set you back around £50-£100 a room excluding equipment, with larger rooms likely costing you more. If you want to hire a professional to do this, the average cost in the UK is £325 a day plus the cost of paint according to Checkatrade at the time of writing.
• Furnishings: The cost of sourcing these will be nothing if using your own furnishings or getting an item from someone that wants to give things away. Used, the cost of furniture may vary quite considerably, but can often be had at a significantly cheaper cost. An older sofa or bed could be had for as little as £50, for example. Brand new, the cost of furnishing the property can be significantly higher. 
• Appliances: Items such as toasters and kettles could cost as little as £10 each. A low budget TV can set you back £100 and even less if buying used, with more luxurious ones costing £500 +.
• Colour features: For as little as £5 each at the lower end, some colourful pillows can brighten up a room. Rugs can have a similar impact at around £20+. You may be able to find these prices cheaper second hand. 
• Standout features: A unique feature that adds value can really stand out and sell bookings but may cost a lot of money too. Hot tubs can cost between £2,000-15,000. With an average cost of £950 and £2,000 to install, log burners are also an attractive feature in any living room. At the more luxurious end, an outdoor swimming pool could really stand out but cost you in the region of £20,000-50,000.

Insurance costs

A holiday let insurance policy with buildings and contents included  could cost you between £300-£600 a year. However, prices are not fixed, differ with each insurer and will depend on your own circumstances. You could end up paying more or less than this figure. Factors that can affect your insurance premium include:

• Location.
• Inflation. 
• Claims history.
• Building type.
• What the property is used for.
• How often it is rented out.
• The rebuild cost.
• How much cover you need. 
• The method of payment. Monthly premiums typically cost a bit more than lump sum payments.

Each insurer will have their own criteria in terms of pricing and this may change each year when your policy comes up for renewal. In general, the price of any insurance quote you get will only be guaranteed for a set period of time. To make sure you get the best deal, get at least three comparable quotes. It may be tempting to reduce cover to get a cheaper price, but it could cost you significantly more in repair costs if you did not have enough cover and needed to claim. Budgeting annual insurance costs is therefore an essential expense. 

If you want to find out more about  this topic, visit our holiday let insurance page, or our page for holiday home insurance if renting out your property on a more occasional basis.

Utility and subscription costs

Like a regular home, you may need to factor in the monthly utility costs for services such as:

• Energy: The costs for this will vary quite a lot depending on the type of energy used, insulation, the size of your home and how you pay.  British Gas has a breakdown of the current average energy costs for a home in the UK to give you an idea. 
• Water: Water and sewage bills can vary depending on where your home is and how much water is used. Check out the average latest prices broken down by region.
• Wifi: Your guests will likely expect to have wifi during their stay. Streaming on multiple devices can have a big impact on the internet speed, so having a minimum speed of 100mbps may be useful if possible. This may drive up the cost, however. 
• Streaming and TV subscriptions: You may need to pay up to £174.50 a year for a TV licence if you have a television or computer device. For streaming services, a basic plan with ads through Netflix or Amazon Prime Video only can cost you £5.99 a month. A subscription without ads or the ability to stream in 4k will cost you more. These prices are subject to change.
• Waste collection: With a high turnover of guests, you may want to look at more frequent bin collections. Weekly private rubbish collection could cost you between £150-£200 a month. For garden waste, councils may charge you extra for this, with the cost typically coming under £100 a year on average.
• Parking permits: Some areas require a parking permit in order to park your car somewhere. If you need a parking permit, the costs for this can vary depending on your council. Contact your local authority to find out more.

Booking platform fees

Certain platforms such as Airbnb and VRBO charge fees if listing your property on their websites. Here’s what the main fees are for the larger platforms at the time of writing:

• Airbnb: Most hosts only pay 3% per booking if they only have one listing. The rest of the service fee is paid by the guest with this option.  Some hosts can choose to pay the whole service fee (usually 14-16% of the booking subtotal). This is less common however and is usually paid by hotels and serviced accommodation for listings in the UK.
• VRBO: Hosts in the UK pay a 5% commission fee plus a 3% payment processing charge on top per booking. There may be additional fees in some circumstances, such as when using property management software.
• Booking.com: Fees on this platform typically range from 10-25% depending on the factors such location and property type. You will need to register on their website to find out what fees apply to you. 

These are far from the only platforms that holiday let owners can list their properties on and each one is likely to have their own pricing structure. If you are listing on multiple platforms yourself then you will need to take account of these differing costs. 

Marketing and advertising costs

Marketing will be taken care of if using the services of a property management agency. However, doing this directly can be a useful way to increase bookings or avoid site commission fees if not using an agent. Here are some simple measures you can take to promote your home:

• Create your own website: A website listed on a business card or posted on a social media website can be a simple and direct way for potential guests to book with your property.  Website builders can help you make a site fairly easily using a pre-built template and costs as little as £10-15+ a month, with several providers now including web hosting within their subscription costs. On your website you can simply link to a listing you have posted on a booking site. If you want to avoid paying commission, you will need to have holiday let booking software so that guests can book directly with you. This comes at an extra cost and prices can vary. Typically this may cost you under £100 a month for smaller properties.
• Business cards: A card in a guest welcome pack offering a discount for second bookings can be an effective way of attracting repeat visitors and more income. Likewise, any local businesses that might be willing to let you leave your business card at their premises might have a positive effect too. Basic business cards could cost you around £15 or a bit more per 100-500 business cards.
• Tourist board memberships: Paying a membership fee to join a local tourist board can be another simple and effective way to promote your property as some will allow you to promote your listing on their website. Expect to pay a few hundred pounds a year to do this on average..

Home maintenance costs

Regular upkeep of the property will be needed. Key general areas to consider are:

• Gardening: Maintaining a garden is a lot of work. If you do not want to do this yourself, you may have to pay between £15-£35 an hour for a gardener. Areas such as lawns and trees can easily become overgrown or look unsightly if left untreated. Simple measures such as installing weed membranes, introducing gravel and utilising low maintenance plants can reduce the amount of work needed and subsequent costs. 
• Window cleaning: Dirty windows could be off putting to some guests.  A window cleaner may cost you in the region of up to £30-£40 per hour depending on the size of the home.
• Gutters: A clogged gutter could lead to structural issues or pest infestation. Hiring a professional to do this could cost you between £50-£300 per clean. Again, the size of the home will affect how much this costs.
• Pool maintenance: Features such as outdoor pools can be very attractive to guests but they require regular maintenance to keep clean. Basic pool maintenance could cost you up to £100 a month on average, with chemical testing and filter changes coming in as additional costs.
• Chimneys and fireplaces: A chimney sweep can cost you up to £100 per visit on average, although the cost will depend on the chimney and location in the UK.  
• Repairs and emergencies: The cost of any repairs not relating to an insurance claim will depend on what needs to be fixed. It is good however to have some money left aside so that you can take action when needed. As an example, a blocked pipe may not be a regular running cost, but it may result in a cancelled booking if not fixed in time for the next guest.  

Safety checks and servicing costs

As we outline in our guide on holiday let regulations, you will be legally required to conduct certain checks, assessments and measures: 

• Risk assessments and measures: As a holiday let owner, you will be required to carry out risk assessments for areas such as fire safety. Whilst there is no law that requires you to pay to do this, hiring a fire safety assessor can cost you around £150-£1,500 +. You will also need to budget for any measures that need to be implemented. A fire extinguisher could cost you around £30-£100+, for example.  
• Gas safety: As a holiday home owner, it will be your legal responsibility to make sure that your gas boiler is serviced regularly if you have one. Expect to pay around £80-£125 per year on average for this. The average cost of obtaining a gas safety certificate is typically under £100.
• Electrical checks: If your holiday let is based in Scotland, you will need to conduct electrical safety checks as part of obtaining a short let licence. Holiday homes must conform to minimum electrical standards, and in general it is a good idea to have your home checked at least every 5 years. Depending on the size of the home, expect to pay between £80-£300+ on average for a general safety check. If you require a PAT test or an electrical installation condition report then you could expect to pay a lot more. Visit our section on holiday let electrical regulations to find out what checks you may be required to undertake. 
• Private water supply: For holiday lets connected to a private water supply, it is your responsibility to make sure the water is of a safe quality. A simple water quality test could cost you around £25 or more. 

Tax & accountancy costs

If your income earned from guests meets the tax threshold, you could be liable to pay VAT. How often your property is rented out may be relevant also. Properties made available and rented out for a certain number of times per year may be eligible for business rate relief. Properties not eligible for rate relief may have to pay council tax instead, with recent rule changes potentially increasing the amount of tax you pay. 

Hiring an accountant may also be a cost worth considering. They can cover tasks such as performing tax returns, claiming expenses and managing finances.The above is just intended as a brief overview. Tax can be a complicated subject and the laws can change frequently. Speak to a qualified specialist for help regarding tax costs.

Tips for assessing potential holiday let costs

You might be wondering how to accurately calculate how much you will need to pay in terms of costs. The following are some steps to help you assess what you might need to pay:

• Write down your essentials list: Some costs will be unavoidable, such as changeover, cleaning and insurance costs. Get quotes for these and budget for the minimum amount you can pay each month.
• Think about your ideal guests: What type of guests you are trying to attract will impact your costs to some degree. For higher net worth guests, adding value by providing luxury welcome packs or a premium furnished apartment may prove attractive but will cost you more money. 
• Evaluate your time resource: How much time you are willing to put into managing your business directly can be a big factor. Delegating tasks such as the day to day management of the property to a company will free up time but cost more. Managing more tasks directly is more cost effective but time intensive too.
• Assess your listing price: To make a profit you will need to set a high enough listing price. Make sure that your costs are balanced against your listing price so that you do not end up losing money.
• Set a budget: As we discuss in our guide on how to start a holiday let business, setting a budget is a crucial first step that can help you plan out costs. Our holiday let profit calculator is a handy tool that can help bring this to life.

Ultimately, the costs of running a holiday let will be unique to each individual. Thorough planning can help ease the process of assessing how much you may need to pay.

How can bring I down holiday let costs? 

Bringing down your average running costs is possible with some simple steps:

• Track monthly spend: Once you’ve set up your budget, a simple spreadsheet tracker is a simple way of knowing if you are sticking to your plan. If you cannot afford to run your holiday with current costs, you may need to reassess. 
• Shop around for the best deal: Things like insurance rates change frequently, so shopping around for the best deal can help you lower your premiums. Consider comparing multiple prices whenever you feel like you are paying too much.
• Consider resource saving alternatives: Features that reduce energy or resource consumption can help lower your energy bills. Smart taps can save on water usage by shutting off when they no longer detect motion. A smart thermostat can save energy by detecting when someone is in the house and adjust the temperature accordingly. Simple measures such as installing energy saving light bulbs or more insulation can go a long way to reducing your utility costs over time. 
• Buy budget or used: As discussed earlier, buying budget items or sourcing them second hand can be significantly cheaper. Make sure that any item you use in your holiday let is appropriate to the type of guest you are trying to attract, however. A cheap and well worn sofa may not be appropriate for higher value guests, for example.  
• Get hands on: Do more tasks such as cleaning yourself if you really need to cut down on costs. Before doing this, consider the potential upside of paying higher costs for some services. Hiring an agency to manage your property may cost more than managing it yourself. It could however bring in higher revenue with the kind of guest exposure and contacts that such a company may bring with them.

Key takeaways

In conclusion, there are a lot of factors to consider when it comes to holiday let costs, including the size of your home and how much direct work you want to put in. You may also need to balance these factors against your budget and how much profit you want to make. If you have any questions about insurance costs, feel free to get in touch with a member of the Pikl team.