Holiday let management has never been easy. Even now, during the pandemic, the competition is growing. Sykes Holiday Cottages, the leading cottage rental agency, has revealed an increase of 80% in enquiries from second homeowners to list on their platform after 4 July.
While restrictions on international travel are still in place, domestic travel has rebounded around the world. Almost a third of travelers in the 25 – 49 age group indicated that they are interested in enjoying a staycation instead of a holiday abroad. For example, in the UK, a popular destination like North York Moors has enjoyed an increase of more than 140%.
To simplify the process of managing your holiday lets, we have answered some of the most frequently asked questions relating to holiday let management.
Some authorities require that property owners have a license in certain destinations. This is to help them keep an eye on the property use and ensure that there remains enough housing supply.
Before you can market your property on some holiday rental platforms, you will first need to have your registration number and permit. It is best to do your homework and get your paperwork in order before listing your property as your local government can fine you for failure to adhere to the regulations.
There are several factors that will impact the tax considerations for your holiday let. For example, depending on how many days of the year you rent out your holiday home, you might have to pay business rates instead of council tax. In fact, this could be beneficial as business rates could work out less expensive than council tax.
It is crucial that you have the right insurance for your property. Standard home insurance policies are inadequate. Not only will it not cover your property should you rent it out commercially, but your policy will most likely become void as well.
Instead, you will need a specialist holiday let insurance. While it is not mandatory, if you do not have the right insurance for your holiday home, your guests as well as your property are left exposed. In fact, if you have a mortgage, building insurance will most likely be a basic requirement.
Also, if you have other employees, it is mandatory to have employers’ liability insurance as well.
You have two holiday home management options. You can either manage them yourself or hire a holiday let management agency.
There are several factors that will impact your final choice. Here is a closer look at some of the pros and cons of each of these two options.
You can decide whether you want to rent out your property or if you would like to stay there yourself without any agency restrictions. You can also decide what services you want to use and how to market your rental without the agency’s input.
If you manage your properties on your own, you do not need to pay property management fees. On average, a property management company in the UK can charge anything from 15% to 30% of your rental income. This means that you can pocket all your rental income after subtracting your expenses and tax.
On top of the general flexibility, you also have more flexibility with regards to deciding your pricing. You can adjust your rental rates and provide travelers a discounted price or special offer for the holiday season much faster. This increases your chances of getting a last-minute reservation.
Not only do you have more control over your rental rates, but you can also enjoy more control over your business on the whole. In short, you will be in control of the quality, which will help you to ensure that all guests can enjoy a 5-star guest experience every time.
The learning curve of the industry is rather steep. So, if you are still new to the industry, you could make errors that could prove to be costly.
This is probably the most significant con to managing it on your own. The admin on its own is already a lot of work. On top of your administrative duties, you will also have to take care of guest requests, cleaning, and maintenance.
If you do not work with a holiday let management agency, you will be responsible for the contracts of your cleaners and other team members. You will also be responsible for the guests’ rental agreements. If legislation about employment is a foreign concept, this can prove to be even more challenging.
Some hosts have reported that they spend more than 40 hours a week on holiday let management. This is a significant amount of time that you could have concentrated on growing your business.
Routine tasks like reservation requests and communicating check-in and checkout instructions can quickly add up to a stack of paperwork. A holiday let management agency will also be able to take care of these daily tasks.
Legal regulations relating to the industry also change from time to time. In some instances, it can lead to uncertainty. Reputable holiday let management agencies will be up to speed with the latest legislation and ensure that you are also at all times informed about changes.
While one of the major advantages of managing it on your own is more flexibility when it comes to pricing, an agency knows when it is the best time to adjust the pricing in response to demand and seasonality. They also have a PR team that knows how to market your property to the right type of travellers and where to find your preferred target audience.
For example, they might suggest other channels where you can market your property. This knowledge about the local market will help you to improve your occupancy rate, profits and guest satisfaction.
A holiday let agency has the experience with regards to handling guest complaints and difficult guests in general. In fact, they might even be able to avoid renting out your holiday cottage to a problematic guest altogether. Not only do they have the necessary experience, but it is easier for them to set aside their personal feelings as it is not their property. Thus, they can respond to the guest in a professional and unemotional manner.
A holiday let agency most of the time already has a network of professional cleaners and tradesmen that they have worked with before.
When it comes to marketing and accepting reservations, you won’t have a lot of input. Also, you will have far less flexibility to book certain days for your own personal use.
As you will have to pay your agency for their services provided, holiday let management costs will be an extra expense. You can end up paying as much as a third of your income to the agency.
All things considered, it can be hard to decide which route to go. In many instances, it is easier to use an agency at the beginning. Then, after you have gained more experience, you can manage your bookings on your own.
With the global pandemic, remote holiday let management has become crucial for eliminating the spread of the virus. Many hosts have reconsidered their ways of managing rentals and realised that they can do it effectively, even from a distance.
Luckily, there is a variety of tools and software solutions available to help you manage your holiday rental remotely. Even if you do not need to run your rental remotely, it is still a good idea to invest in one or more of the following tools as they can help you to reduce your workload.
When it comes to offering self-check-in as an option, you have a few tools. You can opt for lockboxes, smartlocks or a key exchange service. Not only will they allow you to practise social distancing, these tools are also convenient when your guests encounter a delay and will be arriving later.
While a lockbox is an affordable solution, the code has to be created manually. So, if you are not in driving distance from your property, you might not change your code after every guest which poses security risks. Also, some insurance policies might not accept lockboxes or, at least, include strict guidelines.
A smartlock, on the other hand, is a safer option. They enable your guest to unlock the door using a temporary code that is sent via a smartphone. This way you remain in complete control of who may access your property and for how long without having to be at your property in person.
The only problem that you might encounter is if your guests do not have a smartphone or temporarily cannot access their device. Should this happen, you can always unlock it remotely or still use a physical key for this specific guest.
Enlisting the services of a professional cleaning service or housekeeper experienced at cleaning holiday rentals specifically will be one of the smartest investments. To ensure that you receive positive reviews, the cleanliness of your property will play an important factor. Not only is it good for your business, but it is also essential during the COVID-19 pandemic. If you charge a security deposit, a reliable cleaner can also report damage to you so that you submit claims in time.
There is a big selection of automation tools that you can use to help you run your property remotely and become more environmentally friendly. These include motion sensors, smart thermostats, smart lighting, and digital welcome books.
You can, for example, install smoke and carbon dioxide sensors and a motion sensor that will inform you when there is a possible intruder. These do require an upfront investment, but in the long run they will save you money and boost your security.
Smart lighting can also help with security. If your property is unoccupied for a period of time, you can set it so that the lights will switch on and off at specific times to create the impression that it is occupied.
While a smart thermostat might not improve security per se, it can help you to create a warm welcoming (quite literally). You can use it to turn on the heating remotely for a few hours before check-in to ensure that the temperature is right for the guests’ arrival.
A digital welcome book can share all the information your guests will need for a memorable stay. In addition, it can also be used for FAQs which will ultimately reduce the hours spent on guest communication. As everything will be in digital format, it is also easier to add information if the need arises.
One of the major headaches that hosts face is the possibility of unauthorized parties. A ring video doorbell can help you to keep track of who enters your property. You can also consider using a tool like NoiseAware that enables you to keep track of the level of noise. If you wish to install these types of tools, just remember to inform your guests about it beforehand.
A holiday let agent can take care of the intricate and time-consuming tasks. These include: coordinating cleaning jobs, restocking supplies, inspecting the property, and organising the key exchange (or create codes if a smartlock is used instead).
When searching for the best holiday let management agency to hire, you should take into account the following factors.
As part of transparent reporting, your holiday let management agency should offer income and expense statements every month. This will help you to see clearly how money was spent.
Ensure that you see the contract beforehand. As your circumstances could change, it needs to offer flexibility to allow for these possible changes. Also, ensure that you have the option to cancel your contract before the expiration date without having to incur penalties.
Creating a thoughtful strategy and sharing sound marketing advice are key. Virtually all agents can attend to basic requests, but only a handful can offer marketing advice to help you achieve better results. Look at their own social media presence as this is a good sign of their marketing expertise.
You are searching for an agency that will take care of your bookings and customer relations. Ideally, you want to work with an agency that will also offer 24-hour support as emergency calls do not just happen during normal business hours.
Decent agencies will be able to share a few reviews written by other hosts who have used their services. You can also check out Facebook groups, online forums and review websites or simply do a Google search quickly for more unbiased reviews.
Vacation rental software, like iGMS, can also help hosts to manage their holiday rentals remotely without the need to appoint a big team. It is an affordable alternative to using the services of a holiday letting agency.
iGMS can help you to automate many of your routine tasks that you will need to complete. These include: