To turn your second home into a holiday rental is a big step.
It can be tempting, when you talk to friends or see online holiday home owners who have taken the plunge and who are earning an extra income from their holiday home, to want in immediately. To want to turn your second home into a holiday rental right now!
But don’t do anything too hastily.
It needs to be thought through carefully and then only you can make the decision if it’s right for you and your family.
It’s not right for you if:
You’re not prepared to spend any money to make any changes
Styling changes – It’s likely that your second home has been furnished, in part, by old pieces of furniture that you’ve either been given, or were no longer needed in your own home. Great for your own use but not so if you’re taking paying guests. Your holiday home has to be presented to look its absolute best. The furniture doesn’t have to spanking brand new, but it does need to look right and be the right shape, size and colour for the room in question. You also may need to add or upgrade that rug, that’s looking a bit threadbare and pay attention to additional items such as cushions and accessories.
It’s not about ripping everything out and starting again, but working with what you have to ensure your holiday home is presented to look its best both online and offline when guests arrive. If in doubt, a home stager could help you with some techniques to get the look right.
Extra purchases for basics – from providing a well equipped kitchen, to upgrading your average towels, to thick fluffy ones. And OK you may not use wifi when you stay there and you may not even have a television license but most holiday makers will expect wifi and a tv as standard.
Maintenance – all maintenance and repair jobs, including decorating, need to be done before paying guest arrive. The washing machine that needs a kick before it starts, needs to be replaced. No excuses.
Bear in mind there will be expenses and changes to be made. These can be both time consuming and costly when you first set out. Very doable but only if you’re prepared for some short-term spending.
You’re unrealistic about your income
Gaining a client base and bookings takes time. People need to get to know about you and to be convinced to book with you over other holiday cottages.
You have two main options. The first is do it yourself and get your own bookings via your own marketing efforts. Such as your website, social media and listing with fee-based listing sites, with links back to your own website. This route earns more profit for you.
Or advertise via an agency who will take a commission and do all the work for you. But because of this, the profit per booking is significantly less. It’s likely in the short term you’ll go this route while you develop your own marketing strategy. Fine, but remember that 20% on average commission rate. So your short winter break price of £400 which seems a good income initially, once you take off your changeover costs for ironing, cleaning and the welcome hamper (mine is in excess of £100) plus wear and tear, utility costs then the commission – is it worth it? Yes it’s a booking, but there’s no point if there’s no profit in it. Something to think about when you set your prices too.
Remember that the income may not always be as good as it first seems; be realistic about the net income. I’d always advocate being independent of listing sites and agencies as a long term goal and even from the start working hard to find your own bookings. This is how you maximise your income.
You’re not prepared to run your holiday rental as a business
From the moment you take paying guests you are running a business. The tax man will see it that way and your mindset also has to be that of a business owner. This means having a grasp on the finances and every purchase you make for your holiday rental needs to be logged. Even small expenses such as extra batteries and light bulbs.
It means you need to be more organised and put a system in place to track your income and expenses. You need to know if you’re making any profit and you also need to monitor your changeover costs and list every detail. Running it as a business may affect your own usage too as every weekend you stay there, reduces your potential income and this mindset can sometimes take away the enjoyment of being there with the family. Something to consider before you advertise for guests.
You’re not a people person
You need to think of future guests as people, not as pound signs. They are investing their hard earned cash, in you and your holiday home, to spend their precious, well-earned holiday time there. It’s your job to help them with that.
It’s not about taking their money and leaving them to it. You need to care that they have a fabulous holiday with you and want to help them get the most out of their holiday time. This is in the area and in your holiday home itself. You need to exceed their expectations on every level from your excellent customer service before they arrive, to the welcome hamper you leave for their arrival, to dealing with any queries and problems they may have while staying with you.
You’re not ready to embrace new technology
It’s likely that you’re using Facebook for personal use. But when you’re running a holiday rental you will need to embrace social media a whole lot more than this. You will need to learn not only how to use other social media platforms but how to use them effectively to get results. Also running your own website and an e-newsletter platform will be a learning curve at first. You have to be prepared to do this.
Think short term pain for long term gain. But if technology scares you and you want to bury your head in the sand about social media and online marketing, then maybe you need to think twice about running your own holiday rental business. Or get someone to do it for you, but once again that means reduced profits.
You’re too precious about your second home
Of course you love your second home (that’s why you bought it in the first place). And you love to spend time there. You still can. But you have to remember when guests are there, on those days, it’s their holiday home and not yours. So if next time you visit, there’s a chipped plate, the toilet rolls have been used up or there’s a stain on the lounge carpet, it’s all part of renting it out. You can’t be too precious about these things.
For major damage you can claim on your insurance (as an aside, you will need to let your insurance company know that you’re taking paying guests). For other accidental damage, it’s all part of the process of taking paying guests.
So is it for you? Are you ready to turn your lovely second home into a holiday rental property?
It’s not something you should do on a whim. Running a successful holiday home takes up a lot of time and effort. But if you’re up for the job and you get it right, it’s a very rewarding business to be part of. And you still have a place to go on holiday!
PS Still wondering whether to turn your second home into a holiday rental? This free guide will help steer you in the right direction: