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Earn Extra Money by Renting Out Your Holiday Home

By Edited Aug 23, 2016 0 2

Earn Extra Money by Letting out Your Holiday Property.

Many thousands of beloved holiday homes have become a burden to their owners. Some were bought as "safe investments", a bricks and mortar place to store  money. Others were bought as part of a love affair with an area, a special place away from the craziness of everyday life. Where you would always find happiness.

But as the downturn arrived many of these properties have become financial millstones around their  owners' necks. People bought second properties with savings that they wish they'd kept, because now they need to dip into them. They bought with property loans that relied on boom time incomes to meet  repayments.  Or worst of all, they bought with an equity release loan and now their home is at risk.

While many people have sold their second property and accepted the loss, many others can't. They are locked into negative equity mortgages, or suddenly their little bit of paradise just isn't so attractive any more. The neighbours are selling at huge losses, properties values are diving, with no new buyers on the horizon.

If this sounds like you - there is something you can do about it. If your property was desirable enough for you to buy, it will surely be tempting enough for someone else's week's holiday or short break. If your house is the right type, in the right area you can cover your mortgage and more by a few peak season rentals.

Check out the competition
Look up the internet, local papers and small ads to see what else is available in your area. Check out the holiday rental prices your area and decide if it is worth the extra effort to make rentals work.

Prepare the house
Remove valuable personal items. Replace anything that you would be sorry to see broken or lost with a cheaper item. If you have a room, shed or attic you can store things for when you use the property yourself, so much the better.
Assess if you need to buy any extra linen or towels etc. Two full sets of house linen is usually the minimum unless you can launder, dry and press everything between lettings.

Do a safety audit. Repair any loose wires, cracked windows, loose tiles etc. Make sure the outside space is safe. No barbed wire just outside a child's bedroom!

Inform your insurance company that you will be letting out the house and see if you need extra home insurance. Don't forget this is a small business now.

Decide how you are going to manage changeovers between guests. Will you be able to clean the house and do the laundry between guests or will you need to employ someone local? How will you go about finding them, and then how will you pay them and how much?
How will you arrange to handover keys? If someone else is going to handle changeovers for you, how much notice do they need for last minute bookings?

Decide how to manage payments. Cheques in advance, cash when the clients arrive or credit cards via Paypal or some other online payment method are all possible.
How will you manage your safety deposit? Taking cash when the guests arrive and then returning it when they leave is one popular method. Doing all your rentals through a booking website is another increasingly popular way to deal with all financial issues.

Make sure your property stands out.
The chances are that there will be plenty of other property owners in your area already competing for guests. Offer something extra. For example if you live nearby can you be available for babysitting? Can you promise that your garden is well enclosed and safe for children. Will you accept pets? Will you accept smokers? Do you have a pool, or are you a two-minute stroll from the beach or a lake. How close are you to the area's major attractions?
Make an inventory of all your positive points, and don't leave anything out. Things you've come to accept as every day may be of huge benefit to your guest. You have a brick-built barbecue and pizza oven in the garden? Be sure to mention it.

Advertise advertise advertise. Anywhere you can. You won't make any extra money if you don't get people through the door. You can pay for advertising in newspapers or on the web, but keep paid advertising to a minimum until you're well established and can set a budget every year. You can put up signs in your local shop. You can build your own website. Tell all your friends, neighbours and family what you're doing – they might mention it to someone looking for a holiday rental.
Join a  booking website or an agency who will market the property for you and take a percentage of the bookings.

I have been renting out a holiday property  since 2004. The mortgage and most of the maintenance of the house are covered ,and year by year we have improved the house with any extra money. We spend a fair bit of time there ourselves every year, and having tenants in the peak season does not reduce our enjoyment of our home away from home.
I hope this article will help someone whose beloved second home has become a burden, and that they will take back control and find enjoyment again in their holidays.



Aug 12, 2011 1:29pm
There can be tax advantages as well. Check with your accountant to see if repairs and interest may be considered business expenses.
Aug 12, 2011 2:38pm
Yes, definitely thanks for the comment javrsmith, I didn't really want to go into taxes because every country is different. But you would need to check the tax situation.
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