Pros and cons of going local with your holiday let strategy
To maximise your income for a holiday let investment, you need to get it rented for as many days as possible. There will be a breakeven point on your cash flow – the number of days where your income equals your expenses. This should be your minimum goal. Every extra day your holiday let is rented after breakeven equals profit. (Read our article “How to calculate breakeven on your holiday let investment”.)
The question for you to answer is how to get your property rented at the best price for the most days each year. You might decide to advertise the property yourself – an expensive and hit-and-miss way of trying to get business. You should create a website, and this may attract some business. Most likely, though, you will use either a local lettings agent or online sites that help you let your holiday let.
In this article, we’ll summarise the pros and cons of using a local letting agent to help get your holiday let rented.
How you benefit from local holiday letting agencies
When you hire a local letting agent, you should expect a lot of personalised and knowledgeable advise. They will have extensive knowledge of the area, what makes the area attractive to holidaymakers, local peak seasons, and what type of guests you should be targeting. They will be able to help you identify how to present your property for maximum impact, and what items you should include (for example, games for kids, wet weather gear for adults, Wi-Fi, etc.).
However, local letting agents offer much more, including:
- They are likely to be up to date on legal, tax and insurance issues, so can offer specific advice. Online agencies probably won’t have this capacity, and certainly not to offer bespoke advice to suit your particular circumstances.
- They will be on hand to deal with queries from guests, allowing you to get on with your life.
- Tenant vetting is better.
- Local agents will be able to deal with repair problems, hold a spare set of keys (yes, holidaymakers do leave their holiday home and lock the keys indoors!), and manage all other day-to-day issues.
What’s not to like about local holiday letting agencies?
While local letting agencies offer you a lot of advantages, there are also some disadvantages. For example, online agencies such as Airbnb have a far bigger reach. However, many of the visitors to online agencies won’t be searching for accommodation in the area where your holiday let is located. A local agent with a good website which is search engine optimised is likely to be found by people entering a specific search for accommodation.
Other disadvantages are:
- Local letting agencies are likely to charge more than online agencies. Typical letting costs will be in the range of 5% and 20%, compared to Airbnb’s charge of 3%, for example.
- You will have less control over marketing, and if you want to make changes, these may take a few days to update.
- Some online agencies offer cover for property damage caused by holidaymakers. Local agencies won’t.
What is the best agency strategy?
The best strategy for you depends upon your circumstances and your aims. However, in general, it pays to take an approach that includes using online agencies and local agencies. You’ll benefit from the advantages of both, increasing your marketing reach and benefitting from local knowledge and expertise. Whatever marketing strategy you employ, you should not forget the following:
- Maintain an accurate booking diary to ensure you don’t double-book and that people searching for accommodation know exactly when your property is available.
- Keep your accounts up to date, and ensure you maintain all records to comply with holiday let tax
- Ensure you invest in an adequate holiday let insurance cover, protecting you against damage, public liability, accidents and loss of rental income.
- Make sure that your holiday let complies with all health and safety regulations.
Your investment objectives really could be achievable through holiday let investment. To learn more and discuss how to build the best letting strategy for you and your property, contact Gladfish today on +44 (0)207 923 6100. We’ll be happy to discuss how a holiday let investment might fit in with an existing portfolio or be the investment to help you achieve your lifestyle goals.
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