Renting out a second home or holiday let for the first time

Buying a second home is exciting – a home away from home with a change of scenery and country life immersion awaits anyone that decides to make the leap. Second homes can be costly to run, and therefore many property owners look to rent their homes out as holiday lets in-between their own family holidays and breaks.

With staycation holidays in the UK growing historically on average around 4.5% year on year, and latest predictions saying demand will increase by 6-7% per annum until 2025* you can understand why more and more owners are considering a second home as a sound investment choice. If you are looking to invest and bring the county living dream alive, then here are a few pieces of advice to consider.

*Source PwC

Searching and buying a holiday home

As the saying goes – location, location, location! Picture perfect stone cottages can be expensive, so consider something that maybe is not so pretty on the outside, but delivers an outstanding location and stuns on the inside.

Think about transport links from major cities for guests looking for weekend retreats. You can also never go wrong if you can be within a mile of a great country pub. Remember, a lot of people live in towns and cities, so when they look to book a staycation, they normally look for the rural experience. So small villages and countryside settings are always a winner.

If you find that quintessential cottage in the ideal location, then the other thing to consider is its size. The general rule is the more guests you can sleep (comfortably), the more money you will earn. So hunt around for the perfect home, and if you can afford a three-bedroom rather than a two-bedroom, then go for it.

On average a Cotswold property marketed by Bolthole Retreats would earn:

• 2 bedrooms – £40,000 to £60,000
• 3 bedrooms – £55,000 to £75,000
• 4 bedrooms – £70,000 to £95,000

Diversification

Diversifying from farming and other rural businesses into running holiday lets is becoming more of an option with the return on investments people are seeing. The first thing to consider is: what market do you want to attract? If you have several buildings or one large building you may choose to look at converting these into smaller properties to appeal to the mass market. The other option would be to convert the whole building into one large property to attract guests looking to celebrate an occasion or birthday. There are fewer large properties on the market which can make them more desirable and easier to fill.

Once you have decided on what market you are going to target, then speak to a letting agent. Any independent and experienced holiday letting company will have someone in their team that would be able to visit your site and advise if you have the optimum layout and design to make the most of your holiday let for years to come.

A unique experience

One to always remember when you are working on interiors are that guests book a holiday cottage from the photos on a website. Make sure that when you come to completing the interiors of your property you think about how it will look and will the style and finish appeal to as many guests as possible. Make your property look as unique and luxurious as your budget will allow.

Other things to consider:

• Create a welcome guide for your house and local area. Guests love to be able to easily plan their days and you will support your local businesses. Here at Bolthole Retreats, we create full welcome guides with guidebooks, links to experiences in the Cotswolds, and walking guides which all contribute to booking conversion.
• Pets are the hottest trend globally and this trend has accelerated rapidly in recent years. The UK dog population has increased from 10m to 13.5m since March 2020. Ensuring your property is dog-friendly will increase the desirability of your house.
• If you have the space and budget, look to install a hot tub. Research we have carried out with our own portfolio shows that properties with hot tubs sell twice as fast as like-for-like properties without one.

Letting agency versus going at it alone

With the boom of online travel agencies such as Airbnb and VRBO offering an alternative route to market, most new holiday letting owners will look at both options.

The main consideration when looking at how to market your home is to consider how much personal time do you have to answer questions, manage bookings, deal with issues when they arise, and make sure you are legally renting your home within holiday letting legislation and laws.

A good holiday letting agency will cover all of the above for you and will have your home professionally photographed and written to show it to its best. They will secure bookings from their own direct website and will work with multiple online travel agencies. They will normally charge a commission of between 12.5% – 21% but will offer you more of a hassle-free option and will know the area, local cleaning and housekeeping teams, and peak pricing events in your area.

If you chose an online travel agency you will need to produce your own photography, content and guest management, but will typically pay a commission of between 3%-15%.

Running the property

Once your home is ready to accept guests, remember to book your own holiday dates out! You do not want to have to cancel someone else’s holiday for your own.

Budget to invest around 5% of your yearly income of the property back into the house to keep it in the best condition possible. A lot of holiday homeowners block dates out in low season months such as January to do repair, decorating and maintenance.

Look at council tax versus business rates and speak to a good accountant on how to offset taxes as holiday homes are different to long term rentals (AST).

Final steps

All that is left to do now is enjoy sharing your home with guests that will think it is as special as you did when you decided to buy it!