In this month’s owner spotlight, we catch up with William and Charlie Morris – Cornwall holiday home owners. The...
Whether you have recently started your holiday let business or are a property owner with ample experience, understanding and managing the practicalities involved in running a holiday let is key to its success. While it may seem relatively straightforward, running a holiday let business is a time consuming, challenging and complex affair.
Whatever stage you’re at, it really helps to have first-hand advice. Drawing on our years of experience as one of the leading holiday letting agencies in Cornwall, we’ve compiled this comprehensive guide. It will take you through every stage of setting up and running a successful and profitable holiday let business.
Use the quick links below for details on a particular topic or continue reading for our complete guide to running a holiday let business.
Given the right consideration, understanding the market and other influencing factors, running a holiday let business can definitely be a profitable venture and a good investment.
When first embarking in the world of holiday letting and management, it’s soon apparent that there are several potential benefits to running a holiday let business. These unique gains range from financial to lifestyle benefits and are evident in a variety of different ways.
According to the Sykes Holiday Letting Outlook Report 2022 the top three motivating factors for running a holiday let are:
Here we look at a few of the reasons to support why running a holiday let business is a good investment.
The UK self-catering holiday market continues to go from strength to strength. With 2022 bookings currently up 35% compared to pre-pandemic levels*.
A staggering 84% of owners say bookings are stronger than ever and expect this trend to continue over the next five years. With a 78% increase in owner enquiries year to date in 2022 compared to the same period in 2020, it’s clear that there is a positive outlook on the growth of this sector.
Buying a holiday home is for many an aspiration. It’s the chance to fulfil the dream of owning your own holiday destination while running a lucrative business which offsets the cost of your own holiday.
Running a holiday let business is not only a great lifestyle investment but also a strong income provider. If done properly can generate a steady income.
An analysis of data shows that the increase in demand for post-pandemic UK breaks is translating into revenue for property owners with the average income from holiday lets up by 33% in just two years.
For further insight into whether a holiday let is a good investment, read our blog on thinking of buying a holiday home in Cornwall.
Whether you’re new to the holiday letting industry or an experienced owner, you’ll still benefit from various advice and tips when setting up a holiday let business.
If you haven’t purchased your property yet, possibly one of the most important decisions of your letting journey is choosing its location. Choosing a property in an area that suits both you and your guests is a major factor in how successful it will be.
The most sought-after locations according to the Sykes Staycation Index are by the seaside, while the other half are popular walking destinations. Having a holiday cottage in any of these popular tourist locations will ensure a high volume of bookings and a good return on investment.
If you are considering buying an investment property in Cornwall, there are so many options when it comes to location. Read our blog on the 6 top places to buy in Cornwall to help narrow down your search.
Identifying your target market is key to running a successful holiday let business.
Think about who your property is best suited to and who your ideal guest would be. If yours is a cosy bolthole with one bedroom, it’s perfect for couples as a romantic getaway. If you have a large property, then your target market is likely to be families or bigger groups.
Every target market has different preferences and needs, so the features and guest experience you offer should appeal to your target audience. Even if you’ve been renting your property for a while, it is always beneficial to review who you want to attract, what they are like and what they want from your holiday home.
As with any venture, you’ll need to think about how best to finance your holiday let business and make sure that the option you choose is right for you, to ensure your business will be a viable success.
When buying a holiday home, most owners won’t be able to purchase a property outright and will need to apply for specialised financing in the form of a holiday let mortgage.
Running a holiday let business also means you need a reasonable amount of capital in order to furnish, decorate and cover any upgrades needed. You will also need to consider the day-to-day cost of running your holiday let. This will give a fairly accurate insight as to what you should be charging guests in order to make a profit and overall positive return on your investment.
For information on initial setup to the ongoing holiday let costs and the type of mortgage you’ll need, read our comprehensive blog on financing a holiday home.
A forecast on your holiday lets’ potential income is a vital step in running successful holiday let. According to Sykes the average income of a holiday let owner was £28,000 in 2021 up from £21,000 in 2019.
Your earnings will depend on factors like the size, availability and location as well as occupancy levels.
The team at Cornish Cottage Holidays are on hand to provide a free bookings and income proposal for your property, using our vast amount of data on what similar properties in the area have achieved. This will help to ensure that your property can pay for itself and get you the best possible return.
In a highly competitive market, making your holiday property stand out from the crowd is one of the most important factors in ensuring your success! Here are just a few of the considerations that we’ve found help to secure bookings.
It may not come as a surprise that certain features are extremely appealing in a holiday home.
A few often-simple changes can significantly impact the number of bookings you receive and see your income increase considerably.
Holiday cottages with hot tubs are more popular than ever. Not only will having the luxury of a hot tub raise your rental rates, but it could also bring in more bookings and help you stand out from other properties.
While purchasing a hot tub for your holiday let is a substantial investment, our data shows that properties with the added luxury feature can earn more than 49% in additional revenue compared to those that don’t. Making it a worthwhile investment.
With over a third of guests taking their pets along with them on holiday, choosing to make your holiday home dog-friend is a simple way to open it up to a wider audience.
Accepting pets not only allows you to welcome more customers but can increase your holiday let income. Pet-friendly properties can earn an additional 10% in revenue.
WiFi has become one of the most requested features and could well be the deciding factor when guests are researching which holiday cottage to book. With social media and online streaming services so much a part of our lives, and ‘working from holiday’ becoming more popular, it’s easy to understand why 33% of Brits consider having WiFi connection a priority.
With a 44% increase in bookings for properties with WiFi this summer, having a strong and reliable connection is a simple yet inexpensive way to increase your income from your holiday ley by up to 16%.
As people browse for their ideal holiday destination, added luxuries can make a huge difference. And there’s no more appealing feature than an open fire or a log burner, especially in the colder months.
Holiday lets with a log burner or open fire can generate an additional 34% income during the winter months. With less of a demand for holiday cottages during this time of the year, having this added luxury feature is a great way to increase earnings and make your property stand out above the competition.
The key to great booking levels and positive return on your investment, is to ensure your property receives as much exposure as possible and is seen by the largest number of potential guests.
At Cornish Cottage Holidays, we use a range of leading marketing channels to bring your property the best possible exposure.
Working with an experienced holiday let agency like us can help show your cottage at its best via property listings, social media exposure, search marketing, paid advertising, email campaigns and professional photographs.
We’ll highlight your property’s unique features and advise on how best to advertise and market your property to realise its full potential.
Knowing what to charge for your property will be an important element of your holiday lets’ success. As an owner, you need to know that costs are covered whilst still making a profit.
There is a fine balance to pricing a holiday let. Charge too much, and you could put potential guests off. If your price is too low, you will have a high occupancy, but your profit margin will be relatively small.
At Cornish Cottage Holidays, our revenue management systems allow us to compare the pricing for all our current properties. It takes into consideration their features and booking performance, to ensure we are setting realistic and achievable prices.
We have our own dynamic pricing tools, which proactively adjust prices in line with demand. This means that when there is high demand for a particular date or area, prices will increase to maximise your income.
In periods of low demand, prices can decrease to secure bookings (but never below a base rate which we agree with you). We find that across the year, this can generate over 10% more income for our owners.
Furnishing your holiday let in the right way is a vital step of letting your property.
Selecting the right furnishings determines the look and feel of a holiday cottage and is a key factor that will influence guests when booking their holiday. So, creating a stylish, inviting, yet functional and relaxing interior that feels like a ‘home away from home’ for guests is vitally important.
Most guests expect not only a comfortable and stylish property, but one that is well-resourced. The good news is that if you qualify as a Furnished Holiday Let, the cost of your furnishings can be deducted from your pre-tax profit.
Running a successful holiday let business has a few unique differences to renting out domestic residential properties.
Planning permission is generally not required when buying and running an existing holiday let. It may however be applicable if you’re starting a new business, converting or extending your property. If any of these apply, you may need to apply for a ‘change of use’ for your property.
As an owner, you have the responsibility to ensure you’re protecting your property as well as any guests should anything happen. You’ll need to get a specialist policy that will cover a multitude of elements that a regular home insurance won’t.
Holiday let insurance includes buildings and contents cover as well as loss of potential income. Although not a legal requirement, having public liability insurance cover of £2 million, is also an advisable requirement for running a holiday let business.
There are a number of tax implications unique to a holiday let business.
Furnished Holiday Lets have a unique standing with taxation, and therefore gain from certain benefits and allowances. If it meets the qualifying criteria, you could be entitled to a tax relief and could be looking at significant savings and financial gains for your business.
At this stage you will want to make sure that you are complying with all legislation and rules regarding furnished holiday lets. Read our article Furnished Holiday Let tax guide to check you’re on the right track.
Once your holiday let accommodation officially becomes a Furnished Holiday Let, you are legally required to register for business rates. The rate you pay will be less than if you qualified for council tax, by up to half. If you want to know more about how much tax you would need to pay in your area, contact your local council for specific details.
Buying a property in addition to your main residence, whether it’s a second home or holiday let there is an additional Stamp Duty charge known as Higher Rates on Additional Dwellings tax (HRAD).
This form of tax starts at 3% and then rises in bands, climbing to 15% for the most expensive properties. Visit the HMRC website for more details.
If your property is registered as Furnished Holiday Let and you meet certain criteria for income and booking levels, there are several strict occupancy conditions.
The property will need to be in the UK and must be furnished so that guests are able to use it. In addition to which, it needs to adhere to certain occupancy rules.
Understanding and managing the practicalities involved in running a holiday let is key to its success. There is a lot to take into consideration, from preparing your home for guest arrival, to maintenance and health and safety requirements.
The day-to-day administration and booking management, along with customer communication is an important part of letting your holiday home, but it is time consuming.
Your guests will need vital information in order to plan their trip as well as details on where your property is, if there is any parking and details on key collection.
Whether a guest is enquiring about property details, making a payment, or has a query about their holiday, our team will be their point of contact. We’ll take care of all the hard work and finer details, so you don’t have to.
Leaving a few basics for your guests, such as milk, bread and other essentials is always appreciated by guests. Small touches like this cost very little but really make a difference.
You could also choose to provide a small hamper of delicious local goodies to really make them feel welcome. Going the extra mile for your guests encourages them to leave positive feedback, which helps with new and repeat bookings.
Another essential to welcome your guests and help them settle in, is to provide a comprehensive guest information folder. Read our blog about how to put together a guest information folder for your holiday home for tips.
An integral part of running your holiday let is managing changeovers between bookings. This will include general housekeeping and cleaning, providing freshly laundered linen and towels as well as property checks. It’s a crucial part of customer care and it should never be overlooked.
This is where a managed housekeeping service can be beneficial to running you holiday let. We can provide you with a premium service which allows you a hassle-free solution and complete peace of mind, ensuring your property is ready for guests.
Working directly with our suppliers, our Managed Services team can organise and conduct a range of services. From normal changeovers to property checks through winter, our Managed Services team are there to help.
As with any property, a holiday cottage requires regular maintenance in order to uphold standards and encourage repeat bookings. Weekly maintenance can cover the basics involved in keeping your property in good shape. It can be done without much hassle but it’s important to keep on top of.
Most of the time, you can avoid any serious issues by following a regular maintenance schedule. There will sometimes be jobs and ad hoc repairs that are a bit more complex and would benefit from planning, comprehensive advice and qualified tradesmen.
Our Managed Services team can assist owners with organising holiday home maintenance, using our large network of reliable suppliers.
A crucial element to consider when running a holiday let is to uphold a good level of health and safety.
When letting out your property, you have a care of duty to your guests to provide safe accommodation and do your best to minimise the risk from potential hazards. By ensuring your holiday let is a safe environment, both you and your guests can relax in the knowledge that potential risks have been minimised.
There are many operational factors to keep in mind when running a holiday let business.
Have you thought about the process of letting your cottage and how you want to manage your bookings? Are you going to handle each aspect yourself, or are you going to seek the help of a holiday let management company?
You need to know whether the agency you are interested in can effectively manage, market and service your property.
Using a holiday letting agency can make running your holiday let a breeze. Finding the right holiday letting agency in Cornwall for expert advice and support can make all the difference to help you achieve holiday let success.
Deciding on whether to look after your holiday let by yourself or through an agency is key. This will decide on how your letting journey will unfold. For expert advice read our blog on choosing a holiday letting agency in Cornwall. (Moved from H3 Holiday let management)
Partnering with a team of industry experts like Cornish Cottage Holidays, who specialise in the self-catering holiday market is key to your property’s earning potential and overall success.
With over 600 self-catering cottages locations throughout Cornwall, all inspected by us, we have the expertise and industry know how to help you run your holiday letting business.
We want letting your holiday home to be as enjoyable and effortless as possible for you so we’ve created some helping guides to answer any queries that you may have. Simply visit our Owner Advice Page to find out more.
Request your FREE owner’s pack or give us a call on 01326 336773 (option 2) today.
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*Statistic provided by Sykes Holiday Letting Outlook Report 2022 and Staycation Index