I want to rent my holiday home. Is it for me?*
My holiday home is proving to be an expensive pastime. If I rent my holiday home can make it pay for itself?
Yes. One of the most common reasons why people choose to rent their holiday homes is to cover their expenses. In fact 44% of the owners who advertise their properties on the two HomeAway UK sites (HomeAway.co.uk and OwnersDirect.co.uk) to do so in order to be able to afford offset at least some, of their expenses. One third of the owners pay at least half of their mortgage payments by renting. On top of that another 1/3 of all advertisers cover their entire mortgage.
Some owners might have bought their home as an investment during the property boom years, and want to wait until the market goes up before they sell, but don’t want to have to shed out for any more expenses until then. Others managed to get a great deal on house or apartment they wish to retire to one day, and are covering their mortgage and maintenance payments in the meantime. Whatever the circumstances, there’s one very clever idea that unites the majority of owners. They love to holiday in their Mediterranean villa, country cottage or city apartment, and think, "If you can get someone else to pay for you to own it in the meantime, then why not?"
Can I use my holiday home to make an income?
Yes, you can make money from your holiday home but it takes a bit of extra work, and a lot of commitment. The majority of our owners have day jobs, so don’t have the times put all their energies into self managing. Out of all the owners on HomeAway UK, only six percent are living the dream, and manage a holiday home as a primary business.
However despite this 13% of HomeAway.co.uk owners make a profit by renting a holiday home. Around 20% of our owners have annual gross income of £16,000 or more. One of the perks of renting to holiday makers rather than long term residents means that you can put your prices up during the peak season, in some instances almost twice as much as off season.
Peak periods are dependent on the location. Properties in long haul locations, that count as summer and winter sun destinations have a longer peak period. City breaks are also popular all year round. Popular European summer holiday destinations, such as the Mediterranean resorts have a peak period which averages to about 12 weeks. These traditional locations more than make up for their shorter peak season by constantly being in great demand with travellers.
Owner's Gross Rental Income
I already rent out my holiday home with a property manager. What's the difference between doing this and renting by owner?
People lead busy lives, so many property owners hand the responsibilities that come with running a holiday lettings business over to a property manager. There are pros and cons to renting by each method. In fact many owners share responsibility with a property manager to get what they feel is the best of both worlds. Some owners do all the marketing online, or take bookings over the phone from their primary home many miles away, whilst letting the property manger take care of things on the ground. The most import thing is finding the method that will work right for you.
There are many advantages to using a property manager, or property management service. A good PM will market your property to guests, take bookings and deal with the related administration (such as deposits, rental agreements etc), manage arrivals and departures, cleaning and maintenance. However self managing your property is easier than you think. The trick is to educate yourself (you can’t got wrong with having a browse through the Owner Resources).
To many, a holiday home is as precious an emotional investment as it is a financial investment. Renting by owner gives them the opportunity to screen their potential travellers and decide who would be a suitable guest in their home. Others realise they can they can do a better job, and their higher standards mean that guests make those all important repeat bookings, and word of mouth recommendations. Other advantages include being able to charge your guests additional cleaning and service fees, rather than having to pay them (at the property manager’s profit) yourself. On top of this saving the 15 – 50% commission a property manager charges per booking, makes the whole process well worth it.
Wait a minute. I don't live anywhere near my property. I don't want to have to get on a plane every time someone locks themselves out, or can't work the remote control for the TV!
No don’t worry, the majority of holiday home owners don’t live anywhere near the property they rent out. Indeed the majority of our clients are UK residents with an overseas property. The trick is to find a good service to look after any maintenance issues, and finding a reliable trustworthy housekeeper.
This person will be essential to running your holiday lettings business from a distance. As well as providing a regular cleaning service between check ins, they will also be your person on the ground. Being there to help renters with day to day problems that you can’t fix via phone or email, checking people in, and being your eyes and ears on the ground can also be included in their duties.
I'm still undecided. Could you answer a few questions for me?
Yes of course.
I’m worried about what people might get up to in my home
Most people are. Renting out your home is a very personal decision. Most owners have a strong emotional attachment to their holiday homes, and worry about having strangers stay. First of all this fear is rarely realised. It’s important to remember that you’ll mostly be renting to like minded people. Holiday rentals are a sophisticated form of travel, and cater for a different to impersonal hotels. Most travellers choose a holiday rental over a hotel because it’s a home, and respect the place accordingly.
If you rent by owner, taking bookings is your responsibility. Every home owner should take the time to call potential renters, and screen them accordingly. If you don’t feel comfortable hiring to a group of students looking for a wild weekend, or feel someone isn’t being entirely straight with you, then go with your gut feeling. You’re the one who gets to decide.
Like any tenants, your guests will be obliged to operate within the boundaries you set. Like any other landlord, you get to draw up the rental agreement and take a security deposit to protect yourself. Whilst you might not want to leave any priceless family heirlooms out on display (especially if you rent to families with small children), it’s highly unlikely that anyone whose handed you a large chunk of their cash is going to do anything to do anything to upset you.
Will I still be able to use the property for my holidays?
Yes of course. You take the bookings, you decide the weeks of occupancy. Indeed the fact that you’re now making money from your holiday home means you’ve got already got an excuse to go and pay more visits. Just tell people lying on a sun lounger all day is essential product research.
Any other benefits?
What about this one? Many owners see running their second property as a business as the perfect excuse to create the home they’ve always dreamed of. Suddenly you can justify redecorating, adding up market amenities like a pool or Jacuzzi, or equipping your home with the latest HD TV or home entertainment system. Suddenly these luxuries are no longer frivolities but sound business investments that can give you the competitive edge, increase your rental rates, or increase the selling price. It’s not uncommon for owners to jokingly admit that their holiday home is far nicer than their primary homes. Whilst their regular home is affected by the hustle and bustle of everyday life, a holiday property stands apart form the daily grind. What could be better than having a luxury holiday property that you’ve created for the high end of the market, all to yourself?
And as well as that, many owners repeatedly say they find renting their holiday home a very satisfying experience. To many, their holiday property is a labour of love. if you have a holiday potential holiday letting with the “wow factor”, then you’ll love reading the gushing online reviews, receiving personal thank yous and repeat bookings. Our holiday home owners agree nothing is more rewarding than enabling like minded people to have the holiday of a lifetime.
Checklist for Turning your Second Home into a Holiday Rental
Here’s the first port of call for anyone who wants to turn their holiday home into a holiday lettings business. It’s easy to get organised. The Checklist for Turning Your Second Home into a Holiday Rental is a comprehensive plan of attack, listing everything you need to consider. Just follow these simple instructions and you’re away.
Statistical information taken from
HomeAway UK Market Place Report , First Quarter 2010
Savills International Research: UK Second Homes Overseas , 2009
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At the time of writing, to the best of our knowledge 27 of 33 London boroughs have no issue with Londoners renting out their properties. Southwark, Tower Hamlets, Islington, Kensington and Chelsea, Westminster and Camden Councils require that owners request permission before renting out their property. If you are from these boroughs, please ensure you seek permission form your local authority before renting out your property.