So - you've just bought your first Holiday Home and have decided to rent it out to make your fortune?
Think again and read on!
You've signed on that dotted line, bought your dream Holiday Home and are now thinking a good way of covering all your costs and making a huge profit on it: is to rent it, as that's what the sales-folk told you. Right?
Be aware that unless you can run Holiday Home rentals as a business (ie: more than one!), you will never make a huge profit. (So put that picture of your yacht in the Bahamas firmly out of your head...) The highest you should aim for is to be able to cover most of the costs involved in running it. Never purchase a Holiday Home expecting to "make a living" from it:- as that simply won't happen.
PARK v AGENT v DIY
Now the rental decision has been made, should you choose to rent through your park direct, use an agent or to rent it yourself privately?
Many pros and cons to all choices, a few are shown below:
PARK: Usually a large % of any rental taken
AGENT: A smaller % of the rental fees are charged
PARK: Usually never given as a "disposable income" payment. Your rental profit will be credited to your park-account at the end of season (just in time for your site fees to be charged)
AGENT: Varies from agent to agent, but your rental profit is usually paid on a monthly, annual or "on guest departure" basis
DIY: Yours straight away once the rental has taken place
AGENT: Usually an annual management fees is charged
PARK: Some parks will make additional charges to your account to cover things like the linen supplied for a rent. (One well-known holiday company charges the owner's account £25 per rental just for a linen pack - which is given to the guest free of charge as part of the rental & is not "optional")
AGENT: Any additional fees will be shown in your agent contract
PARK: Very rarely given and difficult to obtain when asked for. Usually issued only at point of payment at end of season
AGENT: Usually supplied regularly through the season and readily available on request
DIY: Down to you to keep (and you MUST - see our section below re Mr-Tax-Man!)
PARK: You have no input at all in what is charged for your property. It can be offered as a "free-upgrade" on guest arrival, and you will only receive a % of the original booking, which may well be less than it is worth
AGENT: Usually the agent will liaise with you over pricing and offer advice with regards to increases or decreases to rentals
DIY: Down to you (see our pricing blog!)
PARK: Your property will just be added to the relevant grade of properties available on the park's hire-fleet, with no specific advertising given to it
AGENT: Your property will be advertised "individually" to prosepective guests
DIY: All down to you! Advertising is the hardest and most time-consuming part of rentals. Competition is fierce, so you will need to work long and hard to achieve your bookings
PARK: You will be required to remove every single personal item in your property for a park-rental. This in turn means, when you use your property, you will need to bring these with you
AGENT: Most agents will advise to remove or store any personal item of any particular value to you, but you will need to supply the "basics" required for a rental
DIY: Down to you, but if you leave personal items at your property for a rental, expect them to be used!
PARK: Will simply treat your property as a "hire-fleet-rental" so will receive a minimal clean in-between guests due to house-keeping schedules
AGENT: Will either have their own housekeeping team in situ, or will require you to arrange this
DIY: Down to you
PARK: You will never be informed who stays at your property, or how many are in the booking. If your park accepts newspaper offers, you may have a "£9.50 rental" in your property, in which case:- your rental fees are based on that £9.50 booking and may not reflect the price that could have been achieved elsewhere
AGENTS: Your agent will always have full details of guests
DIY: Down to you to keep, within GDPR regulations
PARK: Will state they are responsible for any damages during a rental through them, but it is commonplace for this to take months for them to action (if at all) Usually they will advise you to claim through your insurance for any major issues
AGENT: Will have Terms and Conditions in place in your rental agreement as to what happens when damage occurs
DIY: Down to you
PARK: Never taken and no repercussions ever taken should damage ocurr. The same guest can quite easily be placed back in your property at any time
AGENT: Will always take a damage bond from the guest, have Terms and Conditions in place for the rental should damages ocurr and the same guest will never be able to rent through that agent again!
DIY: Down to you
OK: You've made the decision to oversee all your rentals yourself.
So what do you need in place before you even start?
The following are quite simply "MUST HAVES" if your rentals are going to succeed:
You must check that your park actually allows private rentals and if any limitations on this are in place. You could lose your pitch licence if these are contravened.
Gas safety & electric safety checks are required in EVERY Holiday Home, regardless of whether they are rented out or not. Gas safety is legally required annually, electric is every 3 years. PAT (Portable Appliance Test) requirements vary from park to park, so may or may not be necessary at your Holiday Home.
When renting, you have a legal obligation to ensure your safety certs are in place, up-to-date and they should be clearly displayed in your Holiday Home. You, (or your housekeeping teams), should be keeping a regular "visual" safety check for every rental. Any obvious un-safe items should be removed from the property, or repairs / replacements put in place.
Ensure you have smoke and CO2 alarms and a fire extinguisher, (in kitchen area), in situ and that all are working and in date.
You should ensure you have a "malicious damage" clause on your insurance to be fully covered for any arising issues with rentals.
You can only legally rent to the maximum capacity of the berth of your property, which will be stated on your sales documents. It may seem tempting to allow a newborn baby to stay, which takes your 6-berth to 7 in total: but it is illegal, is against your park's pitch licence regulations and contravenes your insurance, thus making it null and void.
Can't stress enough how important this is! So many owners rent without any documentation at all, which leaves no protection whatsoever for either them or the guest. Wrong in every way! You will need acceptable booking forms, receipts and terms and conditions at the very least.
Booking Forms: You need to obtain full guest details: home address, contact number, email and date of birth (or you may end up with 6x16-year olds in your property.) If yours is a dog-friendly property, you need to ask what breed and how many, to ensure you are not breaking your park's regulations. Your home address and contact numbers should be shown on these as standard. Obviously date of required arrival and departure should be shown, along with details of which property is being booked. Never give out the pitch number until near to arrival date, as this is a scammer's ploy to use those details to obtain funds illegally. The required rental price, deposit, damage bond, any other additional fees, payment due dates and payment methods should be clearly shown. Until the guest signs the booking form, there is no contract between you.
Receipts: You must issue a receipt for any and every payment made by the guest
Terms and Conditions: If you have no terms and conditions in place for your rental, neither you as the owner, nor the guest, are protected at all and you have no way of enforcing anything the guest does during the rent, nor any conditions of payment, cancellation etc. Take a look at your park's terms and conditions (can be found on any holiday park's website, usually via a tab at the very bottom of the page) and you will see how lengthy they are! Very few guests are aware of these and very few "bother" to read them: they find their holiday, sign the booking forms and then furiously complain when something goes wrong and they realise they have agreed to it in this "small print" Without comprehensive terms and conditions:- you may as well not even start to rent. It is a MUST.
Always have a completely separate bank account for your rentals to your personal account. Several reasons for this:
- It's all too easy to "spend" when the funds are mixed and then find yourself in a position of having no funds available if a refund is due to the guest.
- You need to declare any rental income to Mr-Tax-Man, and that is a lot easier to do when separated from your personal funds.
- Helps to identify any fraudulant activity with your rentals
Never accept PayPal as payment, as it has been known for guests to pay in full and then "reclaim" funds via PayPal as "item not as described" once they are home and have had their holiday... sadly PayPal does bend towards the "buyer" in their dispute decisions and invariably, you have then effectively "given away" a holiday.
Some holiday parks will accept payments direct into your park-account. Just ensure you keep tabs of this and are well aware of who paid what for which break away.
Arrivals and Departures:
All owners work differently, some may provide a "meet and greet" service, some may require key collection from the holiday park reception office and some will have a key-safe at the property itself. Make it clear to your guest as to how (and when) they can access the property.
If you have a key-safe: ensure the code is changed for every guest and changed to a "base-code" on departure, so no "unauthorised" access can occur. Make it clear as to what is expected on departure. If you're happy for them just to "up and leave", or you require them to tidy up before they go: tell them!
Never, ever class any rental payments as "yours" until after departure. It's very easy to start spending as soon as your first guest pays their deposit and you have funds. However, what happens when that rent is cancelled or there are problems with it? Unless you have "back-up" funds, a rental income is never your "disposable income" until after departure and all has gone smoothly.
The Dreaded Tax-Man:
Be well aware that any income from a Holiday Home rental, legally needs to be declared to ole Mr-Tax-Man whether you make a loss, break even, or get to that elusive "making a profit" stage - you are legally obliged to decare it. That applies to sole owners advertising just their one privately owned property, through to "my friend advertises for me" to agents and businesses: so don't fall foul of the law & just fill out the forms!
You have to include all utilities in your rental price, or you simply will get nowhere if you try to charge these costs on top of your rental. Just be aware that your guests will happily have the fire on full-blast, with the Holiday Home doors and windows wide open, leave all lights on for the duration of their stay and possibly have your central heating on in August. This cannot be avoided. So just be prepared for your utility bills to raise dramatically as soon as you start to rent. See our pricing blog!
The Holiday Home:
You must state clearly what is included in your rentals and give an honest description. If it's an older property, say so: (and price accordingly - see our pricing blog!), there is little point in taking "clever" photos to give the impression of a stunning property, to have the guest arrive there and feel that they may as well have stayed at home. All this will achieve is to give you a bad reputation and negative feedback.
Contents: You are advised to remove or store anything of personal value before you rent. If you have personal storage within your Holiday Home, ensure it is locked or it then becomes "available" for guest-use. Having said that, you have to make certain you leave enough storage space for the guest: if several cupboards are locked and inaccessible, you will have complaints.
However: you must supply the basics!
- TVs: (Usually top of the "guest-requirement" list!) The guest will expect at least one TV, (living area) preferably with at least freeview and a DVD capacity. If you want to supply a selection of DVDs, be prepared for them to go walk-about! A 50" screen really is not necessary, the basics are fine.
- Heating: if you only have a gas fire in the living area, state that. It may be worth investing in other portable heat-sources, or wall-heaters, (but ensure you cover usage of that in your terms and conditions.)
- Kitchen: Needs to be fully equipped, 2 old saucepans and a frying pan will not suffice! Think of what you use at home on a regular basis & supply that for your Holiday Home. Ensure you have enough crockery and cutlery for the berth of of your property (and some "spares!"), if you have 6 guests staying and 5 bowls, it really doesn't give the right impression! Never, ever leave any foodstuffs, unless it is within a "welcome pack" provided (and if that's the case: everything has to be new and sealed), or you are leaving yourself wide open to possible health-issue-claims.
- Bedrooms: You must at least supply duvets and pillows. Mattress and pillow protectors are a MUST and must be changed in-between each rental. If you supply linen, it must be in good repair and clean! Try not to just use "left-over" bedding from home, as it will look mismatched and unprofessional!
- Bathrooms: Keep basic. Possibly some liquid soap, (never leave a used bar of soap in situ!), but basically everything else loo or shower-wise is down to the guest to bring!
- First-Aid Kit: Have a basic first-aid kit in situ & keep a check on it for any items that may need replacing
Often THE most "debated topic" with Holiday Homes! Obviously one person's view of "clean" is not necessarily the same as anothers.... but there are basic standards that should be met and on the "flip-side" of that, minor issues that should not be raised as "complaints!" (See our "bad-rent" blog)
You simply must ensure your Holiday Home is clean for a guest arrival, and that doesn't mean a quick "flick-over" with a duster! The property has to have an "arrival clean" Never, ever rely on one guest leaving the property at a rental standard for the next guest's arrival. Unfair to both set of guests and you have no way of telling "who did what" if there are problems.... Maximum "gap" between rentals for a property to be left without a pre-arrival check, should be no more than a week at most.
Always have all "major appliances" checked for cleanliness as a prerequisite prior to arrival, it is just unacceptable for a guest to arrive to left-over, dried-on food in the oven they have to use for the duration of their stay! Depending on housekeeping schedules:- ideally, EVERYTHING in situ should be checked, although sometimes this is just not possible in the allocated time between guests. Concentrate on the "most" important items for the guest first:
- The property should be hoovered and/or floors mopped throughout prior to an arrival.
- All surfaces should be cleaned, including kitchen work-tops and window-sills.
- Try to check the seating on every clean, little hands have a habit of hiding things down the side of the seat-cushions, which can be anything to hair-bands to sweet-wrappers, machine-tokens, to food... (Won't say what "adult-hands" can find to hide!!)
Obviously most arrival-cleans are carried out on a time-limit, so just try to ensure it is as clean as it can be in the time allocated. "Rule of thumb" is to view it from the guest's eyes on arrival.... if you had paid to stay there, would you be happy with it?
Damages and Damage Bonds:
"Accidents will happen" and owners should understand that 100%! Especially with excited "holiday-children" or following an evening at the club-house! However, certain "damages" are just not acceptable on a private rental, or a holiday park rental for that matter, albeit that holiday parks do not charge any kind of "damage bond", which is why some of the "damages" on a private rental occur.....
Never, ever rent without taking a damage bond. The amount is up to you, go too low and you may not cover any minor damage: go too high and it will put the guest off from renting. Usual figures are between £50-100 per rental. It may seem preferable to "trust" your guests, but at some point, unfortunately you will regret not taking one! Always make it very clear as to what your expectations are regarding damages and the condition of the property on departure with regards to the bond refund in your documents.
To deduct or retain a bond for a few minor cleaning issues is unacceptable! Your guests are on holiday and they do not want to spend their last day cleaning your property from top to bottom! However, if there are major cleaning issues and several of them, then possibly a deduction may be warranted. Always be reasonable with minor damages! Does a glass or a mug really matter that much to your property's itinerary? Of course it doesn't! If your guest reports "major" damage, your first step is to get it repaired or replaced as soon as possible. Keep quotes and invoices to discuss with your guest at a later stage. Be honest!
Never refund the bond until the property has been checked! Always take photos of any damages, or any issues left on departure. Without evidence, there is no "case" for deducting or retaining the bond. Contact your guest asap after departure, always in writing, with details of why you are deducting or retaining the bond. Always supply copies of quotes or invoices where applicable.
Never enter into a telephone conversation with the guest regarding the matter, as you simply cannot "prove" what has been said and it will usually end up rather heated. The "usual" response is for the guest to either "vanish" and not respond, or more likely:- the issues at hand will be denied and possibly retrospective complaints made regarding your property. Once you have made an informed decision regarding a deduction or retention of the bond: never back down, or you may as well not have the bond in place in the first place.
Never take to social media with your situation! It really won't help you at all and could leave you open to repercussions under GDPR (replaced Data Protection Act in May 2018)
To protect your rental reputation, you need to remain professional at all times.
Always keep in contact with your guests, as an example: never rely on a Facebook profile as your only contact!
Oh gosh, where to start? As we stated above, advertising is the hardest and most time-consuming part of rentals:- it can end up taking over your life and becoming a full-time job to be successful! A lot of new owners seem to think "renting" is a very easy option and the rents will just come pouring in after one advert... Total opposite!
Competition now is exceedingly fierce and you need to have solid advertising plans to be able to achieve your rental potential.
Make your adverts clear, most guests will only even look at your ad if your photos are appealing. First impressions are crucially important for selling holidays, people make a snap judgement based on emotion when they first see your property online:– there can be no other way of judging it as you can't (obviously) touch or feel a holiday until you get there. So the first few seconds on your advert will be enough to give the potential guest that crucial emotional response, which is hopefully a “Wow” rather than a “No.”
A screenshot or hand-written ad is just such a big "No!"
Take time with your ads, make sure they are well written and presented: spell-check! Nothing is worse than a badly written ad, with spelling mistakes (and please note it is "berth" and not "birth" for properties!!) You need to show honest details of what you have on offer and include photos.
Watermark all of your photos, or quite simply you are opening a very big door for the scammers to steal them. Just google "watermark photos" and there will be several options available free of charge for you to do this. Most advertising groups on social media now require this before your ad will be accepted there. (Something AVMR's Facebook advertising groups have required for quite some time now and others are following! Just email us if you would like details of our groups to advertise on, all free!)
We hope this rough guide, (there is still so much more, but this blog is now becoming lengthy!), has been of some use to owners just starting out on the very rocky-road of holiday-rentals, if you'd like any other advice just email us and we'll do our best to advise! Or of course - you can let us do it all for you!