Cost-saving strategies to increase profits and improve your lifestyle
Using strategies to maximise your holiday let income and boost year-round income aren’t the only ways to increase your profits. You can improve your bottom line by hundreds, if not thousands, simply by being savvy with your costs, spending money more wisely, and ensuring you take advantage of all the tax breaks available on holiday let property investment.
In this article, you’ll learn how to increase your holiday let profits by being clever with your costs.
Don’t go overboard with your welcome pack
That first impression is important, and a great way to make a good first impression is to leave a welcome pack for your new guests. However, you don’t need to go overboard. A few essentials will be as welcome as a few luxuries. Think about what your guests will need to make their first night and morning more accommodating. For example:
- Tea, coffee, milk and sugar
- Bread and butter
- Eggs, bacon, sausages and beans
- Breakfast cereal
Cut out the luxury items, and cut your welcome pack costs.
The advice that Martin Lewis gives homeowners is every bit as valid for holiday let owners: save money on your utility bills by switching. By spending a couple of hours each year searching for the best switching deal, you could save hundreds on your gas and electricity bills. For the holiday let investor, those savings flow directly to your bottom one.
When considering switching utility suppliers, follow the advice of Martin Lewis:
- Beware of compare sites – use them, but remember that they don’t necessarily show all the best offers
- Pay by direct debit to save more money
- Consider how much you could save by switching tariffs instead of suppliers
Use energy-saving devices
Energy-saving devices can reduce your utility bills drastically. The type of devices you should use include:
- Energy efficient bulbs or LED lights – each replacement bulb could save up to £6 per year.
- A smart device, to control your energy usage remotely. (Did you know that devices left on standby add around £30 per year to your electricity bill?)
- Energy efficient washer dryers could reduce your energy bill by 7% (according to uSwitch).
- Installing a water meter could save as much as £100 per year, and water-saving shower heads could reduce your water bill by another £50 or more.
Invest to save more
By investing wisely in your holiday let property, you could save more money. For example, spending around £400 on loft insulation could repay itself in two years via lower energy costs (and you could reduce the thermostat setting by one degree to save another £50 or more). Investing in cavity wall insulation if your holiday let doesn’t have it could save more than £200 each year.
Other investments to make include:
- Buying better-quality furniture that is more robust and less likely to need replacing at the end of a busy holiday season
- Purchasing extended warranties for appliances
When investing in furniture, appliances and other items, look for sales, interest-free offers and cashback deals available when paying by card.
Compare your insurances
In the same way that you could switch suppliers to save money on utility bills when your insurances are due to be renewed make sure that you shop around. However, make sure that the insurance you purchase covers everything you need it to. Consider paying the premium in one go rather than by monthly direct debit – most insurance companies will offer a discount to customers who pay the entire cost upfront.
Use a mortgage broker to get the best deal
Your mortgage payments are likely to be your largest expense. You may decide that a fixed rate deal is best. When it comes to the fixed rate period ending, you should use a mortgage broker to search the market for the best mortgage product in your situation. If you are not on a fixed rate deal, have your mortgage broker review your mortgage every 12 months to make sure that your mortgage arrangements are still competitive.
Don’t neglect maintenance issues
Holiday let maintenance is essential to keep your property attractive to holidaymakers. It’s also essential to stop small maintenance issues from becoming large and expensive repair problems. You may be able to take care of some maintenance requirements yourself, but never attempt to make repairs that are outside of your capability – a poorly executed job will always cost more money in the end.
Use a holiday letting agency
Finally, consider how best to manage your holiday let property. Work out how many hours you put into marketing, managing and maintaining your holiday let, and how much you make from it. Are you making more money per hour than you do in your job? If the answer is no, then it is time to contact professionals and have them manage your holiday let for you.
Using a holiday letting agency frees up your time, ensures your property is marketed and managed more effectively and might increase your bookings because of their expertise. The management fees are deductible for tax purposes, and the profits you make will help pay for the lifestyle you desire (now that you have more free time to enjoy life).
When you own a holiday let property, you have a great deal of control over the profit it makes. There are strategies you can employ to increase bookings, ensure your property is let more often in the low season, and improve the holiday let rental price you charge. As I’ve discussed in this article, there are also strategies you can use to reduce costs across many areas – and lower costs flow directly into your profit column of your holiday let business.
Helping property investors invest wisely and improve their profits is our job. To learn more about the advantages and benefits of holiday let property investment, contact Gladfish today on +44 207 923 6100.
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