I certainly have.
Did you know, a holiday rental could earn you three times as much as a standard buy-to-let property!! Whether you chose a holiday rental abroad, or even in your local city, it can be a
Of course, there are challenges to such an investment as there is with any kind of property.
But it’s okay, I’ve compiled a guide to overcoming these challenges, ensuring that your holiday rental is a roaring success.
– Choose your location –
Not every location is fit for a holiday rental. The area firstly has to have a good tourist trade if you hope to keep your property occupied throughout the year. Some areas may have seasons which is something to consider. You should make sure that your property isn’t too far away from local services. Unless your property is advertised as a ‘break away from civilisation’, most people will want nearby attractions. Also ensure that there’s space for parking.
A town that is a tourist hotspot may similarly not always be a good investment. It’s good to have some competition, but too much competition could put a strain on getting a steady flow of occupants. Choose up-and-coming holiday destinations over well-established ones if you can, or find new unexplored areas of popular tourist towns that may be on the rise.
– Know your client –
When researching the area, it’s important that you have a thorough understanding of the type of client that travels there and their wants and needs. This could affect everything from the type of property you rent, to how you decorate the interior.
Some areas may be popular for business travellers, in which case a condominium in a less touristy area could be worthwhile. If lots of families stay in the area you may want multiple rooms in the property, or at the very least space for multiple beds. If it’s a hotspot for older tourists, you may want to minimise stairs and look for a property that’s easily accessible. If you’re catering for couples on a romantic getaway, you may want to stay clear of areas with lots of kids. If you’re targeting groups of young people, you may want to choose a property that’s right in the hub where the bars and clubs are.
Knowing your demographic will also help when marketing the property, allowing you to highlight local features that could tempt people to stay at your accommodation. Remember that in some cases you may be able to renovate a property to make it better suited to your client.
– Make the purchase –
Once you’ve found a property you like, make sure that you’ve hired all the right people to negotiate the buying process. It’s worth hiring surveyors beforehand to check that the property is in good condition and that no expensive repair costs are round the corner. This is more important than ever in a holiday home, in which a major fault could damage your business reputation.
You’ll likely also need local conveyancers to carry out the legal paperwork. If you’re buying abroad, consider hiring a translator who can guide you through the process. Translators may also be handy when dealing with agencies.
It’s also worth considering your payment options. Paying in their currency may work out cheaper as you won’t have to pay a hefty transfer fee and will be able to shop around for the cheapest currency transfer rate.
– Make improvements –
Next, you need to turn your property into a holiday home. Many of the rules apply on a holiday rental as they do on your average buy-to-let property when it comes to meeting living requirements and having health and safety features (e.g. fire escapes, carbon monoxide monitors).
Knowing you client is important when it comes to renovating your home. If older people are likely to stay there, you may want to fit grab bars or ramps or walk-in showers that make it easier to get around.
Also consider your furniture choices as well as kitchen supplies and tools. A sofa that can convert into a bed may give the option of an extra bed. If you’re accepting pets, it could be worth putting some dog bowls in the cupboard.
Try to keep décor fairly neutral to appeal to as many people as you can. Guests shouldn’t feel like they’re in someone else’s home. That doesn’t mean you can’t add some quirky features, however you should try to minimise personal ornaments and belongings that could clutter the place up.
– Treat your guests –
It’s worth investing in a few luxuries for your guests to make an impression. These could be big luxuries such as installing a hot tub (these are very popular amongst holidaymakers right now!). However, you may also be able wow your guests simply by adding a few small touches such as leaving a bottle of bubbly in the fridge, supplying a welcome pack or offering a few breakfast cereals. You may be able to provide these treats based on the guests you’re planning on receiving – a bottle of wine may be great for couples, whilst coffee and a breakfast selection may appeal to business travellers.
– Advertise your property –
Once you’re ready to receive guests, you’ll need to start doing some marketing. There are plenty of sites such as Airbnb on which you can advertise your property. It could be worth hiring a professional photographer to take some good quality pictures. Also consider getting on social media, as some people may search for properties this way.
Getting to know the locals can also pay off as it can allow you to create cross-promotion strategies. For example, you may be able to offer a discount on a local restaurant or recommend a local car hire place, increasing business for the two of you.
– Create a screening process –
You may also want to protect yourself against the wrong kind of guests. A deposit scheme is worth having in case guests cause damage. In some cases, you may want to disallow certain guests such as those with pets or kids, as well as prohibiting certain rules such as smoking. This should be included in the advertisement. You may even want to request that those applying to stay at your property give a reason for their stay. In quiet and friendly neighbourhoods, you may not want groups of young people who are looking party to the early hours.
Similarly consider how guests will pay you. Allowing credit cards may result in a charge but could increase your scope when it comes to potential customers. If you’re allowing people to pay in instalments, you may also want to have a credit check in place to stop someone missing payments and then cancelling on you last minute.
– Consider a property manager –
Unless you live local to the property you’re renting, you’ll probably want to hire someone to look after it. This may include giving it a thorough clean after guests have left or attending to repairs. You can encourage guests to do their own cleaning before they leave, however it’s likely you’ll still want someone on hand to go over it thoroughly before the next guest arrives. Property managers can also hand guests the keys as well as handling key replacements if their lost. They may even be able to offer local knowledge that you don’t possess. All in all, they can offer some friendly in-person hospitality and monitor the property for you.
– Keep clear financial records –
Any income you make from your holiday rental could be taxable. You’ll need to keep clear records of your earnings to help when doing your tax return. It could be worth hiring an accountant to help you out, especially if your property is abroad where different taxation laws may apply. A financial advisor meanwhile may be able to help you when it comes to trimming costs as well as picking the right mortgage and claiming certain costs on expenses. Even if you don’t make enough to owe tax, you should still keep records as proof just in case the tax man comes knocking round.
– Build a good reputation –
Building a good reputation will help you to get more business. Many holidaymakers rely on online reviews from sites such as Trip Advisor when choosing the right holiday rental to stay at. Encourage positive reviews by attending to all your guests needs. You can then follow up their stay with an email asking them to leave a review (of course, you may not want to do this with people that haven’t had a good stay). Also make sure that you’re protecting your reputation on social media. Facebook pages also come with ratings nowadays so encourage your guests to leave a rating via this method too. On top of feedback, also consider offering guests incentives to stay again. This could be a discount on their next stay or some other form of reward.
I would love to change either my current apartment into a holiday home, or even make a extra purchase for some added extra income. It is so easy and simple to purchase a lifelong investment like a rental property.
Have you considered purchasing a rental property?
Would you look to such an investment?
Let me know your thoughts in the comment section below!
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