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How To Maximise Your Holiday Let Property – Increase Your Profit Potential

Despite “gloom and doom” in the UK property market, it actually seems to be “boom” in the holiday let business. Perhaps because of the increasing difficulty of flying, more and more British people are taking self-catering holidays in the UK. In fact some property agents claim that holiday letting is the fastest growing sector.

So if you have been toying with the idea of getting into the holiday rental business, there’s no time like the present. But don’t think this means you can just put a card about your suburban semi in the newsagent’s window and expect the bookings to come rolling in. As the sector becomes more competitive, the clients become more choosy. So how do you make sure you get your share of the profits?

First and foremost, the old adage about “location, location, location” is even more true about holiday lettings than it is about residential property. Your nice semi in Acacia Avenue may be a very pleasant place to live, but is it somewhere people want to go on holiday? If not, you won’t get many bookings!

Second, remember that if you just let out your property in the ordinary way, you will have to pay tax on all your rental income without being able to claim anything against it. In order to claim your full tax allowances, you have to set up your holiday let as a proper business for HM Revenue and Customs purposes.

So how do you go about maximising your earnings potential on your holiday let property?

  1.  Choose your location carefully – make sure it’s somewhere people want to go on holiday. Coastal or mountain areas are usually a winner and it helps if the property is within easy reach of the sea, and/or has a sea, river or mountain view. It also needs to be convenient for basic shopping, restaurants and pubs.
  2.  Size matters! There is still a place for the little cottage for a romantic couple retreat, but you will maximise your letting chances by having at least two good-sized bedrooms.
  3.  Nowadays amenities are more important than they used to be. Holidaymakers increasingly demand facilities up to or exceeding the standard they have at home. Lettings agents find that properties with as many bathrooms as bedrooms win out, and clients expect fully-fitted kitchens with dishwashers, washer-dryers etc. as standard, as well as provision of gadgets like Sky TV, computer games and DVD players.
  4.  Have a “Wow” factor! Remember this is a competitive business. If you can find a “wow” factor that makes your holiday property stand out, that will increase your earning potential. It could be an amazing view, a particularly gorgeous house, or extra stylish fittings – anything that makes people say “Wow!” when they see it, and that you can use in your advertising.
  5.  Once you have your holiday home, do contact HM Revenue and Customs and have it set up as a business as soon as possible. The Revenue do have some criteria for accepting your holiday let as a business. It must be available for letting for at least 140 days a year and actually let for at least 70; letting periods must be no longer than 31 days and the property must not be let to the same person for more than 31 days in any tax year. This may seem irksome but it does give you good advantages.
  6.  Take trouble in deciding on your rental levels. Check round other rental properties in the area and make sure your rates are neither too low nor too high. (You can also make sure your property is competitive in terms of facilities as well!)
  7.  Don’t forget the hidden costs – insurance, breakages and wear and tear. If your normal home is not near the holiday property you will need to employ someone to clean between lettings. Some expenses can be set against tax, but do need to be budgeted for.



A holiday let business can be hard work, but immensely satisfying and exciting. If you follow these tips with your first property, you will maximise your chances of making a profit. This may encourage you to branch out into a full-time business!

E Berry May 2008

 

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