Turning A Holiday Home Into An Investment
There are lots of benefits to owning a holiday home. On top of being able to escape to it whenever you need a break, you can take whoever you want with you and set your own rules. However, it can also be a great investment opportunity. When you’re not at your holiday home, you can allow other guests to stay there, earning money that can help to cover mortgage and maintenance costs. You may even be able to charge enough for guests to make a tidy profit you each month.
Turning your holiday home into a business isn’t easy – like a buy-to-let property you need to ensure that there are always people in the property that the condition of the property is good and that general admin is all completed. However, unlike a buy-to-let property, you have the perk of also being able to use it for personal use. Here are a few steps that you should take when investing in a holiday home.
Choosing the location
A holiday home doesn’t have to be on your doorstep for you to effectively manage it. It’s possible to own a property overseas and hire someone else to manage it for you. This will be an extra expense to consider, but it could allow you to buy a place in the sun that you yourself want to escape to, rather than a cottage down the road. Buying abroad may be cheaper in some cases, reducing the upfront costs. Unless you want to take a hands-on approach to managing your property, it could be more rewarding to buy a place afar.
It’s best that the location is somewhere that you’re fond of. You’ll be able to market it more effectively and getting help from locals might be easier as you may already know people. The location needs to be a place that attracts visitors all year round for you to make a profit, whether they’re tourists or people traveling on business. Attractions in the area and a friendly attitude to outsiders will help to make it more attractive.
Knowing your key client
It’s worth doing some research into the key people that visit the area. This will help you to find the right property and market it efficiently. If you’re catering to people traveling on business, you may not need a villa with a swimming pool and could look into apartments for sale. If the area is popular for family holidays you may want somewhere bigger with enough rooms. If the area attracts a lot of couples, you might want somewhere more secluded where you haven’t got lots of outside noise. The age may even play a factor – older people may want somewhere with few stairs and easy access to facilities. You should also consider whether to accept pets if you’re catering to holidaymakers in your own country – many families will want somewhere dog-friendly.
Finding the ideal property
On top of being in the right location and meeting the criteria of your key client, the property needs to be in good condition, unless you’re willing to spend extra money renovating it. Hiring a surveyor could be worthwhile, as you would with any other property. Whilst it’s possible to buy online without even visiting the property, you may get a better feel for the place by visiting in person. Consider features such as parking and distance from public transport stations. Visit at different hours at different times of the week to get a feel of what it’s like around the clock.
It could be worth making some improvements to make your property feel less like a home and more like a holiday home. Pay attention to the bathroom as this where people like a bit of luxury – make sure there are a steady temperature and steady water flow by installing a thermostatic power shower. You could even add a heated towel rack and underfloor heating. Make sure that safety and security features are added to the property such as carbon monoxide monitors and decent locks. From here you can start to furnish the home out for maximum comfort with a decent bed and mattress. Extra luxuries can help to make your holiday home all the more attractive to buyers, as well as giving you a reason to push the price up a little bit more. This could be something as small as a complimentary bottle of bubbly in the fridge to something as big as a hot tub outside (these are becoming increasingly popular).
Marketing your holiday home
Once your property is all done up and ready to receive guests, your next step should be to start marketing it. With a standard buy-to-let property, you may only need to pay for marketing when tenants are planning on leaving. With a holiday home, you need to be marketing all the time. Booking sites such as AirBnB are perfect for advertising your property and managing bookings. You can also consider getting into travel brochures and advertising on social media platforms like Facebook. All consider cross-promotion – you may be able to help promote a local business in exchange that they promote you. Also, consider businesses that host competitions – they may be willing to pay you to offer a stay at your holiday home as a prize.
Maintaining the property
Keeping your property clean and presentable is important if you’re going to be renting it out to guests. If the property isn’t local, you’ll probably want to hire someone to look after the property for you. Their role could include handing guests the keys, attending to repairs and cleaning the property before each new guest arrives. Many holiday home owners may charge a deposit that is given back to guests at the end of their stay providing that they don’t damage the property and clean up after themselves. Some holiday home owners will similarly set rules against smoking and allow pets on the premises to minimise further damage. Try not to set too many rules as this could deter guests.