Many Brits are expected to opt for a staycation over a holiday abroad, mirroring the staycation boom that we all got to enjoy last summer.
Because of this, those with a second home or money to invest are increasingly viewing holiday letting as an attractive property investment to consider.
According to Sykes Holiday Cottages, new owner enquiries were up 80% when travel resumed last summer as property investors looked to take advantage of the rise in staycations, and there are already signs of new investors starting to prepare for the year ahead.
Whether it’s your sole income, a second job, or simply done for the enjoyment, the rewards of running a holiday cottage can be considerable. So, for those looking to learn all, there is to know about the market and wanting to understand how best to maximise returns, we spoke to Bev Dumbleton, Chief Operating Officer at Sykes Holiday Cottages, to get her top tips.
1. Calculate any costs
First things first, start by assessing your financial situation before you chose to invest. This will help you determine how much money you have to kick-start your new project.
If your property is going to need some work done to it before you can start letting it out, then think about how much this will cost you realistically, on top of what you’ve paid for it.
Then you will need to factor in costs like bills, cleaning and changeovers, maintenance, repairs and any mortgage repayments, if applicable. Take these costs out of your revenue to ensure you understand what your profits will be both in the short and long term.
Seeking expert advice from a letting agent at this stage will help you estimate costs properly and plan your finances.
2. Think about your location
Whether you already own a second home, or you’re looking to buy, it’s important to consider where your holiday let will be based as this will impact the income you can generate.
The actual location of your property is going to play the greatest role. According to Sykes data, the Peak District takes the top spot as the highest-earning region for holiday lettings in the UK, with a four-bed cottage generating £27,000 a year. This compares to the UK average of £21,000 a year.
If your property is close to local attractions or amenities, such as beaches or historical sights, this will likely draw visitors to book a stay and pay more. For example, Sykes data shows that coastal properties can earn on average 7% more thanks to their location.
It’s also important to think about how accessible your holiday home is, including how much parking is available, and whether there are good transport links in the area.
3. Money well spent
Giving some thought to who your target visitors will be will help you furnish and add appropriate finishing details to your holiday let.
You want it to feel homely, but also be as practical as possible. If you’re appealing to large families, make sure there are a range of bed sizes and enough chairs around the dinner table, and keep it cosy if you want to attract couples for a romantic getaway.
Spending a bit of extra money on high quality, endurable furniture will save you money in the long run, as this has to withstand use by many different guests. Also, think about how easy your furnishings are to clean as you will want to make this job as easy as possible - especially if you will be doing this yourself. Leather sofas, for example, are much easier to maintain than fabric.
Ensuring your guests have a great stay will encourage good reviews, recommendations and repeat customers – all of which will boost your profits.
4. Set your sights on year-round bookings
Making sure your property has year-round appeal will help to boost your income, and there are easy ways to do this.
For example, you can maximise revenue by allowing guests to book shorter breaks. This is especially true for over autumn and winter when people want to escape for long weekends. According to Sykes, owners welcoming shorter breaks can earn 30% more each year by doing so.
There are also many property features that drive off-peak bookings, including hot tubs, open fires and wood burners. In fact, holiday lets with a hot tub earn 50% more, on average, than those that do not.
If you have any features that will attract bookings year-round, it’s important to highlight them in photographs and descriptions of your property.
5. Marketing your property
You should contact a letting agency for useful help and advice, whatever stage of the journey you’re at.
It is, however, most useful to approach them from the outset to make use of their support from the very beginning, not just when you’re ready to start letting.
They’ll be able to advise on everything from the features to prioritise and how to price your holiday let, through to taking the perfect images to market the property online.
When it does come to taking bookings, using an agency like Sykes Holiday Cottages will give you access to invaluable marketing support, including adverting your property across 500 other websites.
As well as using an agency, you should also consider using the power of social media. This will allow guests to leave you a review and any photos of their stay that they wish to share.
