If you have owned a holiday home for a certain amount of time then it’s likely the thought of renting it out has already crossed your mind. In fact, many people who own second homes decide to make some extra cash by letting them out during certain times of the year.
However, even though you can make money from letting out your holiday home there are a number of things you need to think about before doing so. The saying goes that there is no such thing as a free lunch, so here are some tips for helping you let your holiday home safely and legally:
Know the law
Unless you are a solicitor who specialises in property law within the country your holiday home happens to be in, it’s highly unlikely that you will know the legislation surrounding letting your holiday home. In the UK there are numerous laws that landlords have to adhere to such as gas and electricity safety tests etc otherwise they could find themselves losing money, or even worse, facing legal proceedings. Further afield, some countries require you to hold a license for a holiday let so it is best to check with a local agent to understand your responsibilities as a landlord.
One of the easiest ways to make sure that your holiday home is let properly is to hire a company such as a letting agent that specialises in this type of service. Make sure you shop around first though as there are numerous companies out there all of which offer different levels of service and varying prices.
Even if you do decide to hire a letting agent to look after your holiday home it’s still a good idea to do some research of your own so that you understand the work your agent is carrying out on your behalf. Don’t forget, you are the ultimate owner of the property which means you have a responsibility to make sure that your agents are doing their job properly.
Finding the right tenants
Finding the right tenants when you are letting a property in the UK is hard enough, which means finding them for a holiday home abroad is even harder. Again, your letting agent can help with this (for a fee) however as previously mentioned, it’s always a good idea to get involved in order to protect your property.
One of the biggest issues that comes with letting any type of property is what to do should one of your tenants damage something. This is why you need to make sure you (or your letting agent) performs an inventory every time someone new begins renting your property. This information is invaluable when it comes to claiming on your holiday home insurance as if it is signed by your tenants it proves the state of your property and its contents before they moved in.
You can also consider asking the tenants for a refundable deposit to cover any potential damage. Again, your letting agent can advise on the legal requirements around this.
It’s all about the money
Not all people are fortunate enough to be able to buy their holiday property outright and therefore have a mortgage or loan to fund the property.
If you decide to let your holiday home, it would be wise to check with your lender to ensure they are comfortable with this. Some lenders will impose restrictions on the length of tenancy etc as they deem holiday lets to be more of a risk to the property.
If you are intending to rent out a static caravan or park home you should always discuss with the site owner that you are able to do this under your site contract. Sometimes, site owners require you to use their rental services, for which they could charge a fee.
Taking a break
Most people who own a holiday home will naturally want to use it themselves at some point during the year, however the issue with this is that it’s usually throughout the summer months when everyone else wants to use it too and when you will get the highest rental return. A good way to get round this issue is to create a schedule at the beginning of the year and stick to it; this will also help your letting agent when it comes to finding tenants as they will know exactly when and for how long your property is available to let out.
Unfortunately, even the best letting agents in the world can struggle to fill your property at all times, which means that it’s likely your property will go through void periods. It is extremely important that you protect your property during these times as this is when they are most vulnerable.
When applying for your holiday home insurance it’s essential that you let your provider know that not only are you planning on letting your property out but that you will also require cover for the times your property is left unoccupied. Without this level of protection you may end up having to make a claim which will eventually eat into your income and ruin all your hard work.
Even though letting your holiday home sounds like a difficult task the truth is that if you find the right help and make sure you have the right level of protection from your holiday home insurance provider you could end up making a good amount of income. Who knows, you could become so good at it that you start letting out properties in numerous countries.
For more information on holiday home insurance or speak to one of Intasure's Holiday Home team on 0330 100 2232 to get a quote.