Overseas family holidays are a relatively recent concept in the UK. They came about as a result of air travel becoming affordable to people on average incomes. While they are still very popular, there are clear indicators that people are now beginning to remember the benefits of holidaying in the UK and so the “staycation” market is now growing again and looks set to be a major niche going forward into the future. This brings exciting opportunities for property investors, particularly buy-to-let landlords, and so here are three tips to make the most of this growing market.
Remember that many staycationers are driven by factors other than cost
Some people may link holidaying at home with economic turbulence, such as the Brexit factor. This may be the case for people who opt to stay in their own home and just enjoy down time rather than flying off to the sun, but is not necessarily the case at all with those who are going away from home in the UK. In fact holidaying in the UK may not be at all cheaper than going abroad, but it does offer three other benefits any or all of which could encourage people towards this option. Firstly it avoids the need to negotiate airports or seaports, especially with young children, secondly it is a far more environmentally-friendly option for short breaks and thirdly it simply allows people to see more of their own country. Keep this in mind when looking at potential investment properties and when creating your marketing literature for them.
Include management and marketing when considering your costs
Staycation lets are, by definition, short-term lets, which means that every time your guests change, your property will need to be “changed over” in the same way as hotel rooms do, which will, of course, require either your time or the cost of a cleaner. You may also find it advisable to offer regular cleaning during your guests’ stay (at least if they are staying more than a day or two) as hotels do. This not only makes life pleasanter for your guests, but also provides an opportunity to see if anything is amiss. Marketing is the other major cost for staycation properties, as compared to regular buy-to-let. In particular, unless you have the expertise and equipment to take decent photographs, then you will need to find (and pay) someone who does.
The staycation market is also a regulated one
By this point, the staycation market is essentially too big for authorities to ignore and, at the moment, central and local authorities are both looking at the challenge of how to balance the needs to investors with the needs of those who live in an area and who do not, for example, want flats in their block being used for non-stop parties. Future regulation is probably not going to be too much of a concern for serious property investors, in fact it may even be a benefit by shaking “fly-by-nights” out of the market. You will, however, need to keep apprised of current legislation both at national and local level.
Mark Burns is the managing director of property investment firm Hopwood House.