You have a property and it’s not your main home. Maybe you’ve owned it for many years, or recently inherited it. Now you’re not sure what to do with it. Could you let it as a holiday home?
Although it’s not onerous work, you should think of holiday letting as a business, whether you have one property or five. Firstly, is it suitable? Will it generate enough income to at least cover your costs? Consider the practicalities, too. Will you be able to greet guests? If not, where do they get keys from? Who will clean the property? If the boiler breaks down, who’s on hand to quickly fix it? These and other aspects will take on even greater significance if you don’t live near the holiday home.
To help give your thought process a little focus, we’ve listed the main things for you to consider below. This article is quite long and so comes in three parts - just click the links to keep reading. As well as looking at this, do plenty of research and speak to holiday letting agents in the area of your property, as they’ll know the market better than anyone.
Could your property be a successful holiday home?
It’s the first question to ask, of course: would your property make a successful holiday home? Here are the most important factors you need to consider:
- Location Location Location: We’re lucky in North Wales in that so much of it makes a great holiday destination. Some visitors want to be at the heart of the action or walking distance to pubs and restaurant, while others prefer to be quiet and away from it all. Views of sea and mountains add appeal. If you can walk to a beach, lake or popular mountain, it’s likely a good selling point too. Snowdonia, the Lleyn Peninsula and Anglesey are hot-spots, and in particular the towns of Llandudno, Conwy and Betws-y-Coed. Yet properties away from these areas can be successful, too, if there is a specific appeal. Cwm Bychan, for example, is in the hills east of Llanrwst. It’s within easy reach of Snowdonia and the coast, but guests here enjoy a high spec of property and even more peace and tranquility in an “off the beaten” track location.
- Size and type of property: Number of bedrooms will dictate who you attract and therefore how much you can expect to earn – a six-bedroom house will earn more per booking while a one-bedroom bolthole will attract couples and earn a lesser amount. Experience tells us that larger properties book better in school holidays while smaller properties do well at other times. Two-to-three bedrooms is an optimum compromise, but there are other factors that will drive popularity too. Character properties are sought after but modern apartments appeal too. Outdoor space sells, from a balcony overlooking a beach to a one-acre lawn. Think how your outside might differ from more traditional urban homes.
- Laws and taxes: Know your obligations. Speak to a letting agent local to the area (they’ll have the best knowledge of any local taxes such as Council Tax), specialist accountant or insurance broker. They’ll be able to advise you on the current rules of holiday letting, as well as any planned changes in legislation, health and safety and fire regulations.
- Crunch the numbers: Discuss with your letting agency the likely “marketability” of your holiday property. A local agency like North Wales Holiday Cottages will give the best advice on local trends and numbers. Most use “price bands” for properties and they’ll be realistic. Be honest about likely income and make sure you include all costs. Every holiday home owner we’ve ever dealt with has said how important it is to be realistic about holiday letting – set modest goals and learn as you go.
- Think long-term: This isn’t a quick-win game. Look at the longer picture. Perhaps you’d like to retire the property in the future? Maybe you have a personal, sentimental attachment to it and simply want to hold onto it. Bricks and mortar are a great investment option and could help supplement your pension or future financial plans.
Have you decided to let a holiday homes? Read part two for the next steps...
If you’d like free, impartial advice, call North Wales Holiday Cottages on 01492 582492 or email us here.