If you have a spare property in a prime location that is ideal for short stays, then one solution to realise its value and make a profit, is to use it for holiday letting. The advantage of this is that you don’t get long-term tenants and you are always in a position to sell the property if you wanted to.
If you don’t have a spare property then the good news is that you can still make a little extra cash from your own home when you decide to shoot off on holiday yourself.
According to The Guardian, short term lets are becoming hugely popular and a number of websites have grown up that allow you to rent your property whilst you go on holiday. This can be from a few weeks to a few months and is proving a popular way for individuals to finance their own trips.
Yes, there are issues such as what you do with your own personal property whilst you are away but with letting agents often taking a smaller cut than on regular rentals and the chance of making a tidy profit, it’s proving popular with many people.
What Kind of Property?
Letting for holidays works much the same way as ordinary renting with sites posting photos of the property, when it is available and for how long. You can do this anywhere in the country including cities such as London and Manchester where people may want to avoid the high cost of hotels. Most properties are suitable for holiday letting though good transport links are important especially if you are in an urban area.
There are, however, a few problems to overcome if you want to make some extra cash whilst you are away on holiday:
• First, as with normal lettings, you will need to contact your mortgage provider and see if they allow short term rentals. Some mortgage providers won’t, others will allow it under the condition that you use a proper tenancy agreement. Often it depends on how long you are renting out your property for – the longer the lease, the more likely you are to encounter problems.
• You may have a similar problem with your insurance company though some will simply reduce the terms of coverage for events such as theft. Other companies might just add on an additional premium for the period that you are renting out.
• There are plenty of holiday lets available in the UK and it’s quite a big market so don’t automatically assume that you are onto a winner by letting out your property for a short period. It pays to do your research in the first place, find out how other people are getting on and how easy it is going to be to find a short term tenant.
• You will have the same responsibilities as a normal landlord which means you will have to make sure that all health and safety aspects are covered such as installing smoke and carbon monoxide alarms. You will also need to have a valid Gas Safety Certificate.
• There are some councils who are not too keen on short term letting for holidays so you will need to make sure that you are not falling foul of local legislation. If you are letting your home through an agent then they should, of course, be aware of the rules and regulations.
• Finally, whilst it may be great for financing your next big trip, remember that you will have to pay tax on the income that you earn from letting out your property.
How to Prepare Your Property
You are obviously going to need to coordinate the rental with your own holiday and how long you are going for. The big issue is what you are going to do with all your personal property as this will need to be tucked out of the way in a safe place. If you have a large enough property then you can move everything into one spare room and lock it in. Failing that you can rent some storage area for the duration of the letting period.
You will need to take pictures of your property for the letting site and it’s obviously a good idea to make the place seem as uncluttered as possible. You will also have to make a decision on the rent you are going to charge so will need to search for comparable properties that are advertising. Of course, you will want to make sure that amenities such as the heating and kitchen are in good working order.
What Happens if Something Goes Wrong?
The reason that most people will go through a specialist letting agent for short rentals such as this is that the company will be on hand if something goes wrong. So if the heating breaks down or the fridge packs up, there is someone for the temporary tenant to contact. If you are not using a letting agent then perhaps a solution is to have someone on standby who can handle any problems should they occur.
Is Holiday Letting Right for You?
Whilst it can be quite lucrative in the short term, holiday letting is not for everyone. Some people just don’t like the idea of strangers setting up home whilst they are away. Others think there is too much work involved to bother with, including the potential for things to go wrong. For others it is an ingenious way to make a fair bit of extra money, allowing them to go on a more expensive and life changing holiday.
And don’t forget, for holiday makers from abroad it can prove cheaper to find a private individual who is letting out their property rather than opting for more expensive accommodation, particularly if they have a large family. According to The Telegraph one of the reasons for the popularity of letting short term is that people would rather stay in a flat or house that has some charm rather than a characterless hotel room where the only amenities are a mini bar and a bed.