Renting out a home as a holiday let is a great way to boost your income. Before you choose to take this leap, it is critical that you understand the relevant rules and regulations. Discover the ins and outs of renting out your home as a short-term holiday let and how easy it can be with the right agent by your side:
What is a holiday let?
A holiday let is a property that is only used for short-term rental purposes, which can be as little as one night to multiple weeks. Holiday lets are always furnished and delivered to a high standard, containing every necessity you may need when staying away from home. Most holiday lets are located in tourist hotspots, cities, or locations people are keen to visit.
How much could you earn with a holiday let?
When renting your property as a short-term holiday let, you will charge a nightly rate. You have the freedom to choose your nightly rate, which you can adjust based on supply and demand from season to season. Completing research on other similar surrounding holiday lets can assist you in deciding what rate to charge.
Calculate your overall costs of running the holiday let and ensure you are making a profit. You could charge discounted rates for longer stays, such as two or more weeks, and boost your prices during weekends if the demand is there.
How can you prepare your property for a holiday let?
When considering entering the holiday let market, it's crucial to ensure that you have met all the necessary requirements and have prepared your property to stand out in the competitive market. Having a certain theme or décor throughout the property can attract customers.
Higher-standard properties perform better as short-term holiday lets, as people are willing to pay a premium price for a shorter period of time. Whether it’s a log cabin, a city pad, or a seaside cottage, a property with personality becomes more popular with guests.
What are the rules, regulations, and compliances for a holiday let?
With all the different types of lettings in the UK, it’s crucial to identify what you need to legally run a holiday let.
If you don’t outright own your potential holiday let property and you’re paying off a normal residential mortgage, you need to check with your lender to see if a short-term holiday let is permitted in your contract.
As a landlord, it’s your responsibility to regularly service and maintain the property. Managing a short-term holiday let requires more attention to detail, given that the property is fully furnished with numerous appliances.
For your property to qualify as a holiday let it needs to:
Legal requirements:
· Be fully furnished
· Be let out for a minimum of 105 days of the year
· Perform fire risk assessments and install needed fire safety equipment
· Install smoke alarms
· Install a Carbon Monoxide alarm
· Gas safety certificate
Non-legal requirements:
· Carry out PAT testing
· Electrical safety certificate
· Hazard assessment with pools and hot tubs
By having a letting agent manage your holiday home, they can eliminate the stress of legal requirements and organise these requirements for you.
What are the costs of running a holiday let?
It’s important to understand all the costs of running a short-term holiday let, especially if you're new to the market.
Mortgage costs – If your potential property holiday let is mortgaged, you need to factor in the monthly repayments as an ongoing expense.
Advertising – Holiday lets need to be permanently advertised across platforms to ensure a steady stream of guests and reduce empty standing periods.
Cleaning – Each time guests leave the holiday let, the property will need a full turndown service in preparation for the next guests. So, employing a cleaner will come at an ongoing expense.
Maintenance – Like any other property, there will be maintenance and repairs that need to be completed, but as a holiday let, there will be a higher level of wear and tear due to the guest-to-time period ratio.
Utilities – Gas, electricity, water, and Wi-Fi are ongoing expenses for any property.
Insurance – You will need building and content insurance for your holiday let. There will also be extra coverage available for emergencies, accidental damage, and legal cover.
Property management fees – If you’re looking for a more hands off, easy approach when running a holiday let, you can delegate the property management to a letting agent at a cost.
Do you understand the importance of managing a holiday let?
Managing a holiday let can become very time-intensive, depending on how popular it is. It’s key to make sure the customer service of the holiday let is high, as it is a crucial part for repeat guests and positive reviews, which lead to an increase in popularity.
By having your holiday let managed externally, you are able to answer questions and queries promptly and professionally, and they are able to complete all the daunting tasks, allowing you to just provide the property and see a repercussion in profit.
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