Owning a Holiday Let – The Reality – Part 2
Ashley Pearson, National BDM at The Loughborough for Intermediaries
In my previous piece, I evaluated the importance of location and in taking a step back to really take the time to crunch the numbers.
So, we’ve now found a property in a place which should prove attractive to visitors and the sums seem to stack up but how do we set about getting people through the door to cover these outgoings and, importantly, to generate some profit?
Appointing an agent or DIY advertising both have pros and cons.
As my main marketing tool, I opted for an unlimited booking contract with cottages.com – other sites are available. I chose this particular route as it provides me with the flexibility to also take my own bookings via other smaller sites or direct from social media channels such as Facebook.
A booking via cottages.com can incur up to 20% commission rates, although arguably the reach of a specialist website is far, far greater than a DIY option. The system with cottages.com operates on a corridor of supply versus demand i.e. a start price which can go 50% above to as much as 20% below the starting price dependant on availability in the area.
I liken this to booking a flight. If there are lot of seats available, then the price comes down. If there are fewer available seats, then the price increases. Over the course of the year it hopefully balances itself out.
I also manage a Facebook page which requires constant attention and content. I often spend 1 -2 hours per week creating batches of posts for the coming week. So far, I’ve managed to grow the page to just over 500 likes and have received a number of direct bookings via this approach but this has not been an easy task and there has been plenty of trial and error involved. I’ve also joined a number of Facebook groups which offer late deals to people looking for accommodation. Again you have to be very proactive in responding and continuing to post content in order for this to work.
It’s all about the reviews. If someone stays at your cottage you want them to provide a review. This encourages further bookings from other people who are looking to visit the area.
Cottages.com operate a scheme where your reviews are accumulated over a year and, provided you achieve over 9.5, you then receive a “Customer Choice” banner above your property.
In my particular case, my property has won this award for the last five years running and not many cottages around my location have this accolade. A big factor in getting these constantly good reviews is something as simple as having a good reliable cleaner.
Fortunately for me, a family member lives close buy and takes great pride in ensuring that our property is spotless at all times. You can appoint contractors, but you need to continually monitor the quality of the cleaning. After COVID people expect a clean and fresh property as a bare minimum.
Overall, my experience of being the landlord of a holiday let has been positive and the rewards are certainly higher than a residential buy-to-let property. However, I would stress that – depending on your holiday let business model – you can spend a lot more time than you would on a traditional buy-to-let.
Looking forward, the industry faces challenges both now and in the coming years. For example – new licensing laws could be adopted in certain parts of the UK, there is growing opposition to people buying holiday lets in some areas and although EPC ratings haven’t filtered into the holiday let sector yet, it will only be a matter of time once the buy-to-let EPC rules come into play.
Which leads to the big question – would I buy another holiday let?
All I will say is that I keep my ear to the ground and eyes wide open for another holiday let property in the location where I already have one.