But while owning and letting a holiday home may seem like a sensible investment, many may not be prepared for what goes into running a successful holiday rental property.
Harry Roberts, managing director of My Favourite Cottages, shares his expert insight into the ins and outs of owning and managing a holiday rental.
Location, location, location
One of the first and most important factors to consider when deciding to invest in a holiday property is its location - since an undesirable area is unlikely to get many bookings.
But with desirability comes a higher cost, and prospective holiday homeowners should expect to pay significantly more in high-tourist areas than they might have pre-pandemic.
For example, Cornwall house prices, on average, have seen a 30 per cent jump over the last two years, with properties averaging £304,637 in February this year, compared to £234,198 in February of 2020 – with prices likely to continue increasing.
When deciding if a property is a good investment, buyers will need to calculate if the cost of a property in a sought-after location is justifiable against the property’s earning potential.
Desirable features and investments
So, you’ve got your holiday home, in a good location – now, what can you do to make it even more desirable to potential customers?
Firstly, make sure it’s equipped with furniture and accessories that aren’t too personal. Think plain and simple, but keep your desired clientele in mind. Those looking for a more luxurious stay may not appreciate anything too basic, while expensive items are harder to replace if broken or damaged.
In terms of the property itself, make sure to review a property’s existing features before spending money on renovations, as existing things such as outdoor spaces or period features could add value - which allows you to set higher rental costs.
And any keen business owner should always be on the lookout for things that can add value to products and services, and this is no different for holiday homeowners.
Hot tubs were one of the most desirable holiday home features last year, boosting booking rates by £200 per week and resulting in a 20 per cent increase in bookings.
Holiday homeowners should be prepared to invest in additional luxuries to give properties as many selling points as possible that attract more clients and increase profitability.
Marketing your property
The biggest and most important challenge holiday homeowners face is finding people to book their rental.
And with new stricter laws coming in April 2023, holiday homeowners will need to prove their property is rented for a minimum of 70 days a year to qualify for cheaper business rates and avoid paying council tax.
But effective marketing to secure more bookings can be a full-time job in itself, with necessary tasks such as increasing visibility online and updating social media channels extremely time-consuming.
This is where a trusted holiday lettings agency can help. These businesses help market and manage multiple properties on their recognised platform and use their expertise to help drive traffic to advertised rentals, taking the stress out of owning a holiday home.
Some might consider a holiday rental just an easy way to earn some extra cash, but the bottom line is renting out property is a business and should be treated as such.
Focusing on the customer experience is the final puzzle piece that can ensure guests leave all-important good reviews but may also result in securing repeat customers.
Good customer service means something different to everyone, but generally, the property should be clean and presentable, with plenty of amenities to make the stay as comfortable as possible.
And should something go wrong, landlords will need to be flexible and on-hand to help resolve the problem as best as possible – or at least appoint a designated handyman to do it for you.
Guidance on local tourist attractions may also help guests avoid feeling isolated and gives them plenty of ideas on how to enjoy their stay. The proximity to attractions should be an important consideration when buying the holiday rental and access to transport links. Having things to do on your doorstep will help make delivering excellent customer service easier as you won't need to provide as much entertainment for guests in the property.
*Harry Roberts is the managing director at My Favourite Cottages
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