Do you have a second home that you vacation to? Is it empty much of the time or hard to maintain or clean – especially if you live away from the area?
Holiday Let Management Companies like us make all these problems go away.
Whilst we know that our clients rate our services as helpful, affordable and beneficial, we know that they won’t work for everybody.
For example, it’s a big decision to decide whether you can manage everything yourself, or if an agency should take over.
So we thought we would break it down for you; what are the limitations of going it alone? Are agencies worth it? Find out below…
- Is holiday letting profitable? During peak season, especially as of late, holiday letting can earn you as much in a week as you would usually earn in a month from regular buy-to-let schemes. Holiday landlords can actually earn up to 30% more providing an annual return of 8% (2% more than buy-to-let investments).
- How much is a holiday let management? Traditional agencies fees can be around 20-25% including VAT. However, here at Hello Guest, we charge a 12% fee.
- What do holiday letting agents do? We deal with enquiries, bookings, availability, reviews, complaints, guest communication, check-in and check-out, listing optimisation, property management, cleaning and providing amenities.
Going it alone
For those just starting out, or wanting to maintain a closer handle on their holiday rental, there are a few advantages. These include:
- The slight potential for higher earnings: With no agency fee, you get to keep 100% of the rental income. However, agencies often increase the number of bookings so if you do not actively work to promote your property there is the chance of having smaller returns.
- Ease of entry to the market: With multiple online vacation rental sites that are easy to use, you can upload your property and get it seen by guests instantly. These sites also charge a fee though.
- Screen guests: You can personally vet all your guests and have the final say of who comes to stay in your second home. However, this can often be time-consuming.
- Flexibility: You set your own timetable when you want to be at the property yourself with no restrictions. Although agencies like ours offer homeowners complete flexibility and ownership of their homes.
- Set your own rates: As you’ll be directly in charge you can adapt to the market and offer special deals or discounts if you choose. This can help to secure last-minute bookings – whereas an agent could do this for you, but would need your approval beforehand.
- No guarantee of bookings: It’s that simple, running it yourself and doing the best you can does not necessarily mean that you can provide yourself with a steady stream of income.
- It takes a lot of time: For example, holiday rental owners spend on average 9 hours a week marketing their vacation rental as well as managing their bookings. This is not taking into account property inspections, repairs, cleaning, tidying, replenishing, guest communication, check-in and check-out etc. Not to mention the time it will take to the administration work. Essentially it’s like having another full-time job, which can be difficult to keep up with if you have children too. Often DIY holiday let management leads homeowners to work in the evenings, weekends and any extra moment they have.
- Issues can happen at any point: It could be the middle of the night and your guest might have a problem. You will be required to handle these straight away, so if this is not your only source of income it might be difficult to help. Property management companies here manage all of this for you and are available to deal with complaints or any problems as they arise.
- It’s impractical: Unless you’re based close to your property, managing it yourself will not be practical – especially if there’s an emergency.
- Lack of expertise or experience in the sector: Whilst it may sound easy and simple, if you’re a newbie to the holiday letting sector, it can be a steep learning curve. Expect to make mistakes – even costly ones as you find your feet.
- Extra responsibility: If you hire people to help with the running of your holiday let, such as cleaners, gardeners or a receptionist of sorts, you will be responsible for their contract, working conditions, health and safety, pay and arranging their tax with HMRC.
- Competition: Airbnb has 6m rentals worldwide. As more and more holiday rental owners join the competition, it can be difficult to stay competitive. Professional rental agencies have better online distribution models as well as more properties in their portfolio – they can offer lower costs, commercial experience and marketing prowess.
- Marketing expenses: In order to be successful, you will need to market and optimise your property listing through marketing and advertising. This can be a significant outgoing especially if you’re trying to get established.
Pros and cons of a holiday letting agency
If you’re struggling to decide on what to do, it might be worth seeking advice from those who have tried both ways in the past.
A lot of our clients have tried the DIY management approach and now wanting to scale their business even further come to us.
Interestingly enough, we started by letting out our property and have done the DIY model ourselves, through much success and from seeing the main difficulties; we created Hello Guest to help homeowners across the country reap more of the benefits from this lucrative industry.