While a myriad of reasons is likely to have influenced this decision, there is no denying that recent legislation changes on buy-to-let landlords have played a role. On top of that, the financial rewards of running a holiday cottage are fast overtaking buy-to-let, with Sykes owners earning £21,000 on average last year, up from £18,000 in 2017.
The growing popularity of staycations mean that the short-term rental shift is likely to continue in the long-term. So, now is the time to learn all there is to know about holiday letting and understand how best to maximise returns.
1. Consider your location
First things first, when deciding whether your property is right for holiday letting, consider where it’s based as this is going to impact the income you could generate.
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, on average. This is closely followed by properties in Cumbria and the Heart of England, including areas like Herefordshire, Shropshire and Worcestershire.
Also, look at things like proximity to local amenities and the beach, as well as how parking is locally and whether a place has good transport links, as these will all affect revenue too.
2. Calculate costs
Take time to evaluate your finances to determine how much money you have to kick-start your holiday let.
If you already have a property you let out, you’ll have to weigh up the differing costs of shorter-term letting, factoring in budget for things like cleaning and changeovers, utility bills and regular maintenance.
Although there may be more costs, the revenue and profit you’re likely to generate through holiday letting is much higher than buy-to-lets.
3. Finishing touches
Furnishing your property as a holiday let is going to be different to how you’d do a typical buy-to-let. And remember, the higher the standard, the greater the booking value and, therefore, potential earnings.
As your property will be used by a lot of different guests, investing in good-quality, endurable furniture will save you money in the long-run. Be sure to choose your furnishings wisely – for example, leather sofas and hard floors are far easier to keep clean than the fabric equivalents.
Remember that guests are looking for a home-away-from-home – with added luxury – so you need to think carefully about who your target visitors are likely to be and kit your property out accordingly.
By making sure your guests have the best possible experience, you’ll also secure repeat customers and great reviews, which all help to improve profitability.
4. Guarantee year-round appeal
Additionally, think about whether your property has year-round appeal to ensure a steady flow of bookings. There are lots of features you could add fairly easily to ensure this.
For example, properties with hot tubs, on average, earn over 50% more than those that don’t, while other stand-out features like wood-burning stoves and open fires tend to encourage bookings all year round. Making your holiday let pet-friendly will also help to drive bookings outside of the peak holiday season.
Plus, owners who accept short breaks in winter earn 30% more over the winter period, with people more likely to book long weekends away during this time.
5. Marketing your property
Contact an agency as soon as you’re considering entering the market. It is an entirely different game to long-term lets, so getting expert advice from the outset will help to avoid any potential pitfalls.
Getting your pricing right is also crucial, so research the competition and speak to experts to understand how to flex your pricing based on seasonal demand.
Photos are key to showcasing your property and are incredibly important in driving bookings, and also consider including images of local amenities to highlight what there is to do nearby.
*Bev Dumbleton is Chief Operating Officer at Sykes Holiday Cottages
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