Getting Ready to Rent: A Checklist

    After visiting your favourite holiday destination on a near annual basis you decide to buy a vacation home in the area. This gives you security, peace of mind and makes spontaneous getaways easy to arrange. Now you want to share your holiday...

    by Pass the Keys

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    Airbnb Tips

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    11 May 2018

    After visiting your favourite holiday destination on a near annual basis you decide to buy a vacation home in the area. This gives you security, peace of mind and makes spontaneous getaways easy to arrange. Now you want to share your holiday paradise with other likeminded holidaymakers by renting your property out.

    If you have a potential holiday letting with the “wow factor”, then you’ll love reading the gushing online reviews, receiving personal thanks and repeat bookings. What's more, renting out your vacation home can yield significant financial benefits – but only if you do it right.

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    The benefit for holiday homes located in the UK is that you are exempt from the new tax law under section 24 of buy-to-let property. Under the old rules, landlords could claim tax relief on their mortgage payments at their marginal rate – so higher-rate earners could claim 40 percent. The change to a flat rate of 20 percent means that many landlords have seen their profits halved.

    However, as a vacation homeowner, you can still obtain higher and top-rate tax relief on mortgage interest repayments, and the returns from holiday letting can be impressive; between £12,000 and £15,000 a year for the average two-bedroomed cottage in the UK. Learn more on how a furnished holiday let could be better than long term buy to let property.

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    Here are 10 essential steps to complete before renting out your vacation home:

    Make an initial analysis: Create a spreadsheet to analyse what it will cost you to rent out your home versus the income you can expect to generate making it a vacation rental. Expenses will include maintenance, utilities, taxes, insurance, repairs and amenities. Make sure you budget for preventive maintenance and wear and tear.

    Claim any allowances you're entitled to: Letting out a holiday home counts as a trade rather than an investment, which gives you more favourable tax treatment. You may be able to claim various allowances and reliefs, including:

    • Capital allowances on furnishings and equipment
    • Capital gains tax reliefs, e.g. business asset rollover relief.

    To qualify for these allowances, your holiday home must meet specific criteria, including being available for at least 210 days per year and let for more than 105 days a year. Also, no single guest may stay for more than 31 days, and you must charge market value rent.

    Get proper insurance: Ask your agent what type of policy you need for short-term rental homes.

    Furnish, decorate and equip your home: Amenities typically depend on the market and the price, but people often expect to be provided with the amenities they would be given at a hotel. A fast Wi-Fi connection, extensive cable package and other entertainment options are recommended, whilst a hot tub, pool table, board games and other recreation options are very appealing to families.

    Get professional-quality photographs and write an excellent, detailed description: People will choose your home based on the quality of the pictures and the description of the property. That first photo is incredibly important in catching the eye of potential guests. Be very thorough in your description; list every amenity, down to balconies, cribs and pool noodles. The more information available to the customer, the more trust they will place in you.

    Find a dependable cleaning crew and other maintenance personnel: If your home is popular, you will have one set of guests checking out in the morning and a second set arriving that afternoon. Therefore it is imperative that your cleaning crew is reliable and efficient. If you don't live nearby, your cleaning crew also serve as your eyes and ears. You may also need to arrange pool service, lawn service and a handyman.

    Be ready to respond quickly: Most travellers will send inquiries to several homes at a time. The first suitable host to reply is likely to get their business.

    Create a guest screening process: Screen your guests by asking for the number of guests, their ages and their plans during their stay. If they book, get their full names, addresses and phone numbers. You get a lot more information and a feel for people by talking to them so schedule a call to confirm arrangements. Even better, organise a guest screening using a property management company.

    Offer a personal touch: Anything you offer to make your home stand out and to make your guests lives easier is likely to yield more income. You can store useful things such as beach equipments and toys for children's use in the property, and leave tips for holidaymakers based on your own experience. Anything you've learnt, pass it on. This gesture will help your guests feel at home and appreciated and will significantly increase the chance of recommendations and re-bookings, leading to a steady annual income.

    Hire a property management company: Consider hiring a property management company if you don't have the time or desire to run your vacation rental yourself successfully. They can manage every aspect of renting your home, from managing bookings, to creating your listing. Leading Short-Term Management Company and Airbnb co-host, Pass the Keys, can streamline your vacation rental experience, making it more profitable and hassle-free.

    Get started today or speak to a host advisor

    Book a call with our host advisors today and have all of your questions answered