If you have a spare home or holiday home, turning it into a holiday let could give you a lucrative revenue stream. In this article, we discuss what a holiday let is, how to do your research, and how to get started.
What is a holiday let?
Put simply, a holiday let is a property that is let out to short term visitors that are on holiday. If you have an additional property located in a popular holiday destination then this could be an option for bringing in additional income.
How much effort can you put into it?
Between meeting visitors, cleaning, dealing with admin systems and logging accounts, running a holiday let can be a lot of work. Consider whether you have the time to dedicate yourself to these activities or whether you can afford to pay someone else to run it for you.
Is your property in a popular holiday location?
Luckily, this should not be too difficult to assess. If you live near somewhere like London, you probably know the answer already. Look at a map of your surrounding area. Do you live near any attractions or beautiful landscapes? Are there many hotels? Do you have many visitors during the holiday season? Take a look at popular holiday let websites and see how many listings are in your surrounding area. If there are a lot then the chances are that there is potentially significant demand. If you do not think your property is in a popular destination, do not let that put you off. You can still try and test the waters but do not be surprised if you do not pick up as many bookings.
Make sure your property is ready
Your visitors will expect the same experience in your home as they would in any hotel and so it is essential that it is kept clean and safe at a minimum. Check out our guide to being an Airbnb host for more useful information about this and how to comply with legal regulations.
Think about your audience
Type in ‘holiday lets’ or related terms in your area and have a look at the competition. How are the properties presented? How have they been marketed? Think about the type of people that might come to these properties and present your home accordingly. Your price and property description should appeal to these target markets as well.
How are you going to market it?
There are several places to market your holiday let but the easiest place to start with is a holiday let website. These will have specific target audiences that are already looking to rent out a holiday let.
Another alternative could be to start your own website. Given that this can be quite a competitive market however, marketing your website to get it in the top search results online or getting people to click on your ads is a lot of work and can be expensive. If you are planning on running the holiday let yourself then it may be best to outsource the marketing of the website to someone else if you can afford this. You may struggle to have the time to do everything otherwise. For people who cannot afford to do this, it may be best to just list your property on a holiday let website or platforms like Airbnb instead.
To maximise the number of bookings you get, consider listing your property on several holiday let websites (but do not forget to to sync your calendars to avoid overbooking).
Learn how to use the system(s)
As with any business, the key to running a successful holiday let is providing a service your customers are happy with. That said, most holiday let websites have their own review systems and way of promoting properties. To maximise your potential revenue, you may need to get used to how each one works. To start with, write a description for your listing and compare it with the potential competition. Pick the competitor with the most reviews. How does your listing stand out against the competition? Are your photos better than theirs? If they are not, the chances are that you will not get as many bookings. Get used to how each platform works, obtain more reviews and you should have a better chance of succeeding.
Consider a holiday letting agent
The benefit of using an agent is that they can manage practically everything on your behalf from meeting guests, taking control of paperwork, and looking after your property. A good agent should have local knowledge of your area. They can also help market your holiday let to maximise the chances of you getting better returns. Bear in mind that an agent will charge commission and you may want to consider how this could affect your profits. Whether you think it is worth it will depend on your appetite for time-consuming activities or your ability to market your property. If you think someone else would be better doing this and provided you can afford it, you may be better off appointing an agent instead.
Think about tax
You might have to pay tax on any income you earn. The first £1,000 of your property earnings is tax-free but regardless of how much you earn, it is important to consider the tax implications of running a holiday let before you start. If you plan to rent it out for most of the year, your property may qualify as a furnished holiday let. If you are unsure about tax, it may be best to consult with an accountant or HMRC.
Check your mortgage
A vitally important step is to check the terms and conditions in your paperwork. If your property is currently covered by a residential mortgage, your terms and conditions may forbid you from running a holiday let. There are specialist mortgages available so it is important to check you are covered and that you do not risk breaching the terms of your agreement.
Are you insured?
Before you start, you may want to check that you are covered by your insurer for having paying guests to stay at your property. Ideally, a specialist insurance policy designed to cover you for holiday lets will give you the most comprehensive level of cover. Check out our holiday let insurance guide for more information.