As the credit crunch tightens, second home owners may be tempted to let their property to bring in extra cash. But opening your home to paying guests might not be as straightforward as you may think.
The number of Britons who own holiday homes overseas is estimated at 425,000. Many aim to rent these properties for at least part of the year. When you couple this with people from other countries who also own holiday properties, it's clear that there's stiff competition for the same pool of holidaymakers.
So how do you make your property stand out, and ensure everything runs smoothly? Sarah Chambers of Holiday Rentals, an online advertiser, says that before you even start renting you need to understand all the legal aspects.
"Ensure you are allowed to let your property on a short-term basis and that you understand applicable taxation laws, as you must declare income from holiday lets," she says. "You also need liability insurance and, ideally, a booking contract to confirm details of the reservation, deposit or cancellation policies and terms and conditions of tenancy."
Understand the market you are aiming for and what you can realistically charge, she says. "Research the price of comparable properties in the area. Having your own website is great but there are millions of online portals, so you also need to advertise somewhere where you'll definitely be seen with great photos and descriptions of every room, plus exteriors, facilities and the view."
Alice and Jim Rattenbury know exactly how to run a successful holiday lets business. They have two Spanish rental properties and Alice works as a scout for the rental firm Elysian Holidays, checking out homes to see if they are suitable for customers. "Visitors are looking for a relaxing time, with everything regarding the property and its surroundings taken care of," she says. "They want a home from home and will have made a careful search online and looked for previous clients' feedback."
A landlord must respond quickly to enquiries or problems, she adds. There are also issues of security if a property is left empty, and you'll need to think about routine tasks such as housework, gardening and pool cleaning. A letting agency will make all this easier, though they'll dictate when your property needs to be available to rent, and will charge a fee. This may, however, may be a better option than employing staff privately, as you need someone reliable and must conform to local employment laws.
Matthew Fox, of the property management agency Pure Destinations, says that one of the main problems faced by owners wanting to rent is the lack of information or help. "Good rental agencies should offer a complete package, from generating business to seeing legal aspects are in order – and maybe offering extra services such as airport transfers," he says. Many owners have little idea who is renting their home, he points out; a letting agent will filter visitors to ensure that they are reliable and trustworthy. "We also aim to generate business out of season. Any agent can fill a place in July and August."
Ian Richards and Bob Garner own Casal Dei Fichi, a restored farmhouse with six self-catering apartments in Italy's Le Marche region. They believe that customers want somewhere at least as comfortable as their own home, and encourage return custom by offering added value, such as welcome packs with local produce and information about social events. "We're conscious that there are thousands of businesses like us," says Richards. "Being successful basically comes down to providing everything customers could want in the ideal location."
Holiday Rentals: www.holiday-rentals.co.uk; Alice Rattenbury: 00 34 636 022 027, www.fincaalboran.com; Elysian Holidays: 01580 766 599, www.elysianholidays.co.uk; Casal Dei Fichi: 00 39 0734 959 018, www.casaldeifichi.com; Pure Destinations: www.puredest.com
*A letting agent should take charge of marketing and bookings, cleaning, maintenance, and sorting out problems. Fees vary but expect to pay around 10 to 20 per cent of the weekly rental income.
*Online advertising portals usually charge a fee that depends on aspects such as where your ad is placed in their listings and the number of photos displayed.
*You must declare any rental income for taxation purposes, either here or in the country in which you own. You can usually offset the cost of maintaining your home against tax.
*Regulations vary between countries but in most cases you'll need a permit to rent out your home. This may include providing safety certificates for utilities, and liability insurance.Reuse content