Top 10 tips for renting out your holiday home
With many leisure property owners feeling the impact of recessionary times and with the peak holiday season just around the corner, now is the ideal time to rent your holiday home out to potential holidaymakers. In the leisure property market, sales are down as sellers currently outstrip demand from buyers. As a result, many long-term second home owners are ready to rent out their personal retreats to bring in extra cash, says Adrian Goslett, CEO of RE/MAX of Southern Africa.
He notes however, that holiday home letting isnt without its fair share of complications, and offers the following 10 tips for those owners who are considering letting their leisure properties out:
1. Up your offering
The expectations of the majority of todays holidaymakers gets higher every year in terms of standards and facilities. Goslett notes that the following facilities are in demand, especially at the upper- to medium-end of the market: a pool and/or spa bath, air-conditioning, a deck or terrace with sun loungers and preferably with a view, braai facilities, satellite TV and Internet access.
2. Aesthetics and decor count
When decorating, remember that your personal taste may not be others, so opt for a neutral look and colour palette. To maximise appeal, complement the decor with colourful accessories that can be easily and inexpensively changed according to trends. Goslett also advises that you spend a bit more on quality furniture that will be able to better withstand frequent use it might cost you a bit more initially, but it will save you money in the long run. He also says that you should pay attention to the outdoor areas: Outdoor dining areas, sun loungers and a braais are always a win.
3. De-clutter the space
If you intend to use your leisure property yourself when it is not being rented out, then make sure your personal clutter is locked away in a chest, cupboard or unrented room when you leave. People dont want to feel like they are staying in someone elses house, explains Goslett. He says that books, magazines and games however, are a great addition to any holiday, and families will also appreciate high chairs, cots and stair gates.
4. Treat every room the same
Goslett advises that when decorating, make sure you get the most bang for your buck by making the most of every room in the home: Go for consistency throughout the property, rather than splashing out on a designer kitchen and forgetting to sort out the bathroom for example. If you are working on a tight budget, aim for a neat, comfortable, tidy and functional aesthetic, and keep it clean and well maintained at all times.
5. Competitive rentals
It is essential that you get your price structure right, says Goslett. Find out what the local competition is charging and price your property accordingly too much and youll have empty weeks, and if you are under-priced during the peak season, you will leave little room to manoeuvre financially during the rest of the year. It is also important to work out how much you need to break even this total will be a good indicator on where and when you can be flexible. And lastly, remember to factor in the extra costs, like higher electricity and water bills, says Goslett.
6. Spread the word
There is no better way of marketing your property than by word of mouth, explains Goslett: Happy holidaymakers will come back for more, and they will tell their friends about it too. However, one cant rely solely on word of mouth you will need to factor marketing into your expenses as well. You can oversee this yourself, or you can get a letting agent to do it for you, says Goslett: Letting agents cost in the region of 15% of the rental returns, which may seem quite high initially, but remember that they handle and pay for the advertising and marketing, they do a background check on prospective tenants, organise the deposit and payment, they arrange the delivery of the keys to the property to the holidaymakers, do an inventory check once the holidaymakers leave, and they are on hand should the holidaymakers have any issues during their stay.
7. Showcase your property to its full advantage
The best tip is that any potential holidaymaker wants to imagine themselves in the photo, says Goslett. So when you are taking pictures of your home to use for marketing purposes, take a little time to style your home to its best advantage put a pretty tablecloth on the table, along with a bottle of wine and two glasses, make the beds up nicely, include some fresh flowers in the living areas, put cushions on the outdoor furniture and loungers, and remember to take photos of the views, if there are any. Whatever you do however, never include pictures of people in the photos.
8. Take the necessary legal steps
If you are renting your holiday home out, the bank holding the bond on the home should be informed. Also, it is a good idea to look into taking out public liability insurance to protect you against any claims made by holidaymakers should they hurt themselves whilst in your property. Also, Goslett says that the rental should be covered by a contract, which includes deposit/payment terms, cancellations, breakages and complaints.
9. Consider the tax implications
Make sure you are aware of the tax implications of earning income from your holiday home. Of course, if you earn money from letting out your holiday home, you will need to pay tax on these earnings. However, the good news is, that there are deductibles that you can claim against the profits, such as maintenance, security, management, insurance and marketing costs for example. Also, since it is a second home and not your primary residence, you will need to pay Capital Gains Tax on the property when you sell it or if it is transferred into another name, says Goslett.
10. Hire some help
Since you wont be around for the most part of the year, you will
need to hire the help of some professionals to help you maintain and secure
your property. Hire local help many rental agents should be able
to inform you of suitable companies or individuals that you can use, and
they should also be able to negotiate good prices for you. These services
should include a regular garden service, domestic cleaner, a security
company, pool maintenance if there is a pool, as well as general handymen
and painters for general upkeep and maintenance of the property.
Article by: www.remax.co.za