Well done. You’ve decided to rent out your property as a holiday rental. Now, what to do next? Where do you start? Here are a few suggestions, based on both our client and personal experience.
Advertising your holiday rental
This is key to both finding a good audience of tenants and enticing them to stay at your property. If you have a great advertisement on a well viewed website, you can attract quality tenants and be fully booked.
Look around at various sites to decide which ones have good exposure and also to compare the costs of advertising your property. Some websites charge a one-off fee to advertise while others charge a fee to advertise plus a per night successful booking fee.
Also look around at the various advertisements on the websites to see what other property owners are charging for similar properties in your area. It’s a good idea to compare and understand what is included in the nightly fees charged so that you can set your holiday rental fees accordingly – and ensure you are competitive and in the range of similar holiday rentals.
Managing your holiday rental
You can choose to: manage the holiday rental yourself; hire a property manager; or contract with a professional management company.
If you can, avoid the professional management companies – you will save a lot of money and may find you are much better off. Most professional management companies charge at least 18-22% of your rental fees and have additional costs for advertising, linen, call out charges and other hidden charges. This can eat up your profits and make holiday rental a less viable alternative for your property.
If you don’t want any involvement at all with your holiday rental and prefer to hand it over to a professional management company, then this may be the best option for you – but be aware that there is a high financial cost of doing so.
Alternatively, you can find your own property manager. Sometimes you may be surprised: if you ask your friends and family members you may find that it could be a great part-time job for a stay-at-home mother, university student, etc. Who wouldn’t want to earn a little extra income? Just make sure you pick someone who is reliable, organised and trustworthy.
If you decide to self manage, make it as easy on yourself as possible. For example, have inspection checklists ready. Have a Holiday Rental Agreement template set up so that you only have to fill in your tenants’ details. Set up a calendar system with automated reminders so you know when final rental payments are due.
At Legal123 we’ve included many of these time-saving templates, including a property manager contract, into our Holiday Rental Agreement.
Using a holiday rental agreement
One of the most important items you need as a holiday rental owner, is a Holiday Rental Agreement with your tenants. This is not only protection for your rental payments, property and any damage that may be done by tenants, but it is also a requirement by insurance companies to claim on insurance for any damage. A Holiday Rental Agreement also gives protection and comfort to your tenants and makes clear your terms of rental.
A Rental Agreement normally includes the specifics of the rental: dates, check in/out times, contact details. In addition, general terms are also included: whether the property is smoking/non-smoking, pets are allowed/not allowed, noise guidelines, etc. It is important for your tenants to understand and agree these terms – and makes it easier to enforce them, charge for any damage done, and so on.
An easy-to-understand, well drafted and comprehensive Holiday Rental Agreement will also make you look like a professional operator – and your tenants will feel more comfortable paying deposits in advance and also encourage them to look after your property.
Stay tuned for more tips and tricks from Legal123 on how to manage your Holiday Rental Property.