Renting out a holiday property is an excellent way to help cover some of the operating costs, and if carefully managed, having the property in regular use can even reduce its maintenance costs. However, many people go into it wearing blinkers; thinking that it’s as simple as taking a few photos and sticking it up on the big holiday rentals sites. It isn’t. And many people come unstuck and end up miserable as a result of this miscalculation. Running a successful rental property is hard, here are some steps you can take to help ensure your success:
1. Do Your Homework
To some this seems like common sense, but far too many people buy property overseas without paying a visit to their intended destination. If you plan on renting a property out visiting the location becomes even more vital.
And not just once. You will want to get a feel for the neighbourhood, you will want to spend time touring the surrounding area, partaking in the activities, and dining in the restaurants so you really know that this is somewhere great to vacation. Doing so will also give you a chance to assess the competition, because you can book and stay in the type of vacation property you plan to buy.
You should also think carefully about what size of property you want to buy. It is a well known fact that rental yields tend to be higher on smaller properties, and tend to decrease as you move up the scale. However, larger properties often have the largest pool of potential tenants. Consider the competition you have assessed and choose your size carefully.
Part of this process is also to ensure that the local authorities allow vacation rentals in that area, and also to ensure that your home insurer will cover such activities and for how much. You should also look into liabilities insurance, and to what is required in local law, so you are safe if your guest should have any accidents.
2. No Have-a-Go Photo
This is probably the most common and definitely one of the biggest mistakes home sellers and renters make. DIY photos came make a property look anything from smaller than it actually is or dingy to downright terrible. Professional images really sell a property, and the cost of £100 – £300 means they will pay for themselves in 1 – 2 rentals. Try for no less than 10 photos, with the best exterior feature of your property as the first or top listing image, followed by wide-angle lens interior shots and a few of the property at night.
3. The Right Management
Many people intend on managing the rental of their property themselves. But when it comes to a property hundreds or even thousands of miles away this quickly becomes not only impractical but unfeasible and even unviable.
For 10-30 percent of the rental income a good management company will walk guests in as well as checking them out, ensuring that the house is kept in order or that the deposit is withheld. The house manager will also be the point of contact for guests should the plumbing need repair or a pool not get properly hot, which, by the way, it never does.
4. Friends and Family or Success?
Loaning a holiday home to friends and family is one of the best parts about owning one. The downside is that they usually ask to stay in the home during peak rental periods. This is problematic because the peak times are not only the times when the property earns the most money, but also has the best chance of winning repeat business.
Therefore, if you really want to have a successful rental property you must find a way to turn down these requests. If you explain that this is the time when the property earns the most, and that the income is vital to the upkeep of the property, most friends and family members will happily accept or at least understand the rejection.
5. In Rentals Everyone Hears You Scream
You have really gone all out on the images and the description of your property and the rentals are flowing in. But before you accept your first guests and in between every party, you or the management company must ensure that it lives up to the description. If you misrepresent your property then it will almost certainly be posted online and this could easily affect your income. Before renting you should also consider the size of deposit, and also how you will process rental payments.
6. Where are all the Guests?
This is very frustrating. Your home is perfect, exactly equally perfect in fact to the description you wrote for it and the photos you bought for it, but still no guests. The most common problem is the price. If your property is not in line with similar properties in the area, if it is too cheap or too expensive then it will deter potential guests. Failing that find a property in the area that is achieving success and find out what they are doing that you aren’t, and/or what they aren’t doing that you are, and emulate their recipe for success.
If you’ e managed to get inquiries but just can’t seal the deal, make sure you’re responding to your potential renters in no more than a two-hour period, and try not to be too aggressive or too quick to close the deal.
Photo credits: Bengt Nyman via Flickr