Letting out your holiday home
Hulse Ross explains how letting out your holiday home can help cover your purchase price and park outgoings.
Before you decide to let out your precious holiday home you have to understand what is involved and be clear about it if you want to make a profit or help to pay towards the bills like your site fees. Do not underestimate the outgoings during the lettings.
Lets look at two different scenarios.
Person A buys an expensive holiday home for £50,000. Person A manages to let it out for 10 weeks and has a total income of £5,000. Outgoings are site fees at £1,800 per year, electricity and gas at £20 per week, gas service and certificate £100. Cleaning is £15 per let, laundry another £5, insurance £200, maintenance £200 and advertising £300. A total of £3,000. That makes a profit of £2,000. It would take about 25 years to pay for the holiday home. And this does not take into account wear and tear and depreciation, nor financing the holiday home in the first place.
Person B buys a second-hand cheap holiday home for £4,000. Person B does all the repairs and maintenance including cleaning. Total income is £2,200 for 10 weeks and total outgoings are £2,100. A profit of seemingly only £100. At this rate it would take 40 years to pay for the home. However, the depreciation on older caravans are negligible.
These two scenarios show that it is not easy to make an overall profit.
Tips for successful letting
1. Without your own website to promote it, it is hard to sub-let your caravan.
2. Sort yourself out with terms and conditions, booking forms and insurance.
3. Don’t forget gas safety tests on all your vans.
4. Cash flow is important, so get your deposits in on time.
5. Have a final cut-off point for the last payment.
6. Arrange for a cleaner to look after your holiday home.
7. Think about how to get the keys to the person booking on time. Consider a back-up.
8. Keep your booking data in a save place and back them up on the computer.
9. Consider a cleaning deposit as well as a booking deposit.
10. Make it clear if you don’t allow pets in your home.
How your park can help
If your park is offering a letting service you may want to consider it as they may be able to advertise more effectively. On the other hand you will have to pay them commission which increases if they handle the booking for you.
What other things to consider
1. Consider your customers expectations. They want a clean, warm and cosy let, a home away from home.
2. Customers expect high standards. Be pragmatic and take all negative comments on board and consider each on their own merits.
3. Offer a discount on future holidays.
4. Sub-letting can be a lot more work than you expect. Consider paying somebody to manage everything for you.
5. Caravan facilities have to be adequate for the number of visitors.
6. Think about supplying access for disabled people.
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