A Guide to Setting Up a Holiday Let Business

In order to successfully set up a holiday let business, you must think carefully about the property you're buying, how you're going to set it up, running your holiday let and how you're going to market your business.

Read on to learn all there is to know about starting a holiday let business.

Are holiday lets a good investment?

If you treat your holiday let business like any other business, then it could be a fruitful investment. If you are going to invest in a holiday let business, there are many factors to consider and decisions to make.

There has never been a better time to think about investing in a holiday let, with the already rising level in UK staycations being increased further with factors such as the COVID-19 pandemic and Brexit having a positive impact.

If you're comparing holiday lets with buy to lets, the advantages that short term holiday lets have is that they offer a higher income potential, you are able to adapt your pricing to reflect demand and that there are multiple tax advantages that you can benefit from.

For further information read our post about holiday lets and investment here, and use our Holiday Let Income Calculator to discover estimated earnings from your property.

Buying a holiday let

For many, this will be the first big step into the holiday let business and, whilst this is an exciting process, there are a few things to consider. The time you spend researching the market will pay dividends later.

Location

Choosing the location of your holiday let is undoubtedly one of the most important decisions you will have to make as an owner. Your property's location is one of the major factors in determining how much you will earn from holiday letting, so it's important to take time to carefully consider it.

If you are buying a property with the intention of holiday letting, then this must be taken into consideration when deciding where you want it to be. Don't just choose somewhere that appeals to you, think from the perspective of your future guests. Choosing a location that is within a reasonable distance of a major town or city can really open up the potential client base for your property, as those looking for a weekend break won't want to spend a long time traveling.

When you have a potential location in mind, do your research to find out if holidaymakers actually visit there, and if they do, why? Discovering what attracts people to the area will help you identify who will be looking for accommodation. You can then use this information to either rule a property out that may be unsuitable, or you specifically target that clientele by tailoring your property to suit them. For more help on how to find the right property read our full guide.

It is also advised to choose a location that has a lot going on in terms of a range of attractions, shops and restaurants, so anybody that may end up staying at your property will enjoy their experience. Be sure to pick somewhere that stays fully open all-year-round, this will increase your chances of a consistent income during the off-peak months.

Read our guide on the best places to buy a holiday let here.

Personal travel time

The location of your holiday let isn't just important for your guests, but for you too. If you are planning on running and maintaining your holiday let yourself, then you will want somewhere that is within easy traveling distance.

If you decide to buy a holiday let that is too far to travel to and from regularly, then you will need to figure out whether you are going to use a holiday let management company, or personally hire people to look after the property.

Will it stand out?

People's very first impressions of your property will be from the pictures that they see online, so it's vital that it impresses from the start. Marketing is extremely important if you want your holiday let to be a success, and ensuring that your property stands out from the rest is essential.

Whether that be a stunning exterior or the picturesque views on show, something that makes your property really eye-catching at first viewing would be hugely beneficial. If your property has an unpleasant exterior, then it's likely that people will move on before taking a look at the interior, so it's important to keep this in mind when looking at buying a holiday let.

On-site parking

Accommodation offering free off-road parking spaces is seen as a huge plus near many of the UK's popular tourist spots, as parking at these attractions can be hard to come by.

Not knowing where you are going to park, or how far you're going to have to walk from the car to the property with a week's worth of luggage is a real bugbear for holidaymakers. If you choose a property that is able to offer parking, it will be a sure-fire winner with your guests and will be well worth the extra effort taken.

Making sure that your property is easily accessible is another way to appeal to a wider audience and reduce potential complaints. Your guests won't appreciate having to walk up a series of steps to get to your property, or climbing steep and narrow staircases once they're inside. Simple considerations such as these go a long way to making your guest's stay as hassle-free as possible.

How to set up a holiday let business

There are many decisions that need to be made when setting up a holiday let, and it would be much more beneficial to you and your holiday let business if these decisions were planned as early as possible. The most sensible way to do this is to identify the type of people that you would like to attract to your holiday let, and set it up to suit them.

Holiday let management

Once you have decided to start a holiday let business, choosing how it's going to be managed is one of the first and most important decisions you will need to make.

Managing your holiday let yourself is an efficient way to cut costs, however it is time consuming. You need to make sure that you have enough time on your hands to do so.

Using a holiday let management company does come at a cost, but it also saves a lot of time and effort if you have other responsibilities. If you are going down this route, then holiday let management fees need to be factored into your costs, especially when looking at the best holiday letting agents.

Furnishings

Deciding how to furnish your holiday let can be a fine balance between style and comfort. Appeasing both of these can be achieved, however comfort should always be prioritised. Soft furnishings such as beds, sofas and chairs being uncomfortable is one of the most common reasons for negative reviews, and it lays the foundations for a poor holiday experience.

Although it may be tempting to buy cheap furnishings in order to save on your outgoings, investing in high-quality fittings is the way to go if you are looking to maximise your holiday let investment. Not only will better items last longer and avoid you needing to keep replacing them, your property being of higher class will help attract more bookings.

Think from the perspective of your guests and what their experience is going to be like, rather than trying to save on costs. As well as ensuring that your soft furnishings are comfortable, try and think of other things that can easily prevent issues, such as blackout blinds to avoid being woken up by the light.

If you want to be classed as a furnished holiday let, having a certain level of furnishings is part of the requirements. This classification comes with many additional advantages, including entrepreneurs relief.

Should you allow pets?

You don't have to accept pets in your holiday let, however it is an opportunity to broaden your reach to a wider audience.

Around 1 in every 3 Sykes bookings bring a pet along with them, and our customers actually take more pets than children on holiday with them.

If you do decide to allow pets in your property, then there are some small touches that you can add to show that you are carefully considering your guests' experience, and will encourage repeat bookers.

A safe and enclosed outdoor area is something that pet owners often look for in accommodation, so they can let their pets roam free without worry. Simply having a wall or fence around your garden is the simple solution to this. You could also include things such as pet treats and a dog bowl in your welcome pack - personal touches like this show that you're really thinking about your guests and what they might like.

Running a holiday let business

Although running your own holiday let business can be extremely rewarding, there is a lot to take into consideration when it comes to running and maintaining your property.

This is where holiday let management companies can come in to help take the weight off your shoulders. Companies like ourselves offer bespoke managed services packages that are tailored to how much, or how little help you need. Seeking help in some areas, but still completing some tasks yourself could be an excellent way to getting a bit of help without spending too much.

A lot of people may think that choosing to completely manage your holiday let yourself is a way to save money, however as well as the amount of time that it takes, you are also going to need to spend a fair amount on equipment in order to clean your property to a high standard.

Most tasks that come with running a holiday let should be completed during the changeover in between each guest's stay. It's important that these are done to the highest standard ready for the arrival of your next guests, with the aim being to make it look as though nobody has stayed in the property before.

Cleaning and laundry

Holiday let changeovers must include the cleaning of every surface in every room of your property, as well as washing and replacing all bed linen and towels. Also ensure that any outdoor areas and furniture are cleaned.

Cleanliness is the single biggest driver of positive and negative feedback with Sykes customers, meaning that it can either make or break somebody's holiday. For this reason, it's imperative that your entire property is thoroughly cleaned, especially in light of the pandemic.

Holiday let maintenance

With the recent rise in staycations, guest expectations are higher than ever as people are choosing to holiday in the UK rather than going abroad. Booking your holiday let will be many people's main holiday for the year, so it's vital to make sure that everything works. Things do get broken from time to time, in this case it's important to fix or replace broken items as soon as possible.

Regular checks should be taken, ideally at each changeover, to ensure everything in your holiday let is in full working order. This includes testing light bulbs and switches, any electrical appliances and checking kitchen utensils and crockery for chips or breakages.

The exterior of your property also needs looking after. It's important to keep your garden up to scratch, and keep it looking like it does in your pictures online. This is where your guests are going to be spending their time in the warmer weather, this isn't going to be pleasant if the area is full of weeds, long grass and tatty furniture.

How to reduce holiday let management time

If you live far away from your property, or are tied up with other responsibilities and don't have time to manage your holiday let, there are various ways in which you can make things easier for yourself:

Work with a holiday home management company Hiring someone to handle day-to-day tasks such as cleaning, assembling welcome packs, gardening and laundry is one way to reduce your time spent working at your holiday let.

Install a key safe Having a key safe means that you can simply provide your guests with a passcode, rather than having to arrange to meet them at the property. This is also a more COVID-friendly method of welcoming new guests.

Low maintenance garden Of course, having a beautifully mowed lawn in your holiday let looks good, however keeping this appearance up requires regular maintenance. Low maintenance outdoor areas such as AstroTurf, decking and patios can be just as attractive, and they don't need anywhere near as much attention.

Heating Kitting out your holiday let with a remote heating system such as Hive not only offers a convenient way to keep on top of bills, but helps give peace of mind while guests are staying at the property.

How much could you earn from a holiday let business?

The earning potential of your holiday let is dependent on many different factors, from the location and type of property, to the quality of your furnishings and the features that it includes. At Sykes, our team of knowledgeable experts can tell you exactly where to buy and what fittings to include if you are going to maximise your earnings.

How to price a holiday let

There is a delicate balance that needs to be found in your pricing strategy. Charge too much and your property may be empty in popular seasons, charge too little and you’ll be fully booked, but your profit margin will be relatively small.

Research into market trends for your area and property type will be a good guide for your approach to pricing. Here at Sykes, our revenue management systems are leaders in the market, our dedicated team constantly monitor the markets trends, tweaking your rental prices to optimise your profits.

Holiday let running costs

When estimating how much you can earn from your holiday let business, it's important to consider in the costs of running a holiday let and factor those into your profits. Some of the costs to take into account include: agency fees, insurance, holiday let business rates, furnishing your holiday let and management and changeover costs.

Working out running costs will give you a realistic idea of what your profits will look like after these outgoings are taken away from your rental income.

Read more in our full guide to the costs of running a holiday let.

Additional features

One way to improve your booking volumes and increase your rental rates is to offer extra features that are popular with holiday makers.

Our data suggests that adding a hot tub or open fire to your property can increase your revenue by more than 50%, proving that investing money into your property is worth it in the long run. However, by offering WiFi, a simple and inexpensive addition, your income could rise by around 16%.

Some even simpler ways to increase your revenue is to opt-in to Sykes' Income Maximisation pricing strategy, offer short breaks and to accept pets into your property - all of these could give you an increase of more than 10% on your income.

When you are deciding which features you could add to your property, it's worth having a look at the competition in your area and seeing what they offer. If your property includes something that theirs doesn't, it's likely that customers are going to choose you over them.

How to market a holiday let business

To get the bookings you deserve, you need your property to have the maximum exposure possible. This means having a strong online presence and good visibility on search engines such as Google.

With exceptional growth in the popularity of UK holiday cottages, the marketplace has become highly competitive, making it increasingly difficult to secure a decent foothold in the market as an independent.

An experienced holiday letting agency, such as ourselves, can help you gain the bookings you deserve. We have a large team of experts who are experienced in following market trends and remaining a step ahead of the competition.