With interest rates falling and the value of your savings being eroded, many people are looking for alternative ways of getting a good return on their investments.
This is leading some to consider holiday home property management for the first time. In some cases, this may be people who have a second home that until now they have kept for use by their own family but who are now considering renting it out as a vacation home to make additional income.
In other cases, it may include people who have snapped up property at bargain prices in the weak real estate market, and who are now looking to establish high yield holiday rental properties.
However, although there are many advantages of renting out holiday homes, including the prospect of good yields, there are also pitfalls that can trip up the unwary.
If you want to run a holiday letting business, you will face new issues and challenges, some of which are quite different from those associated with owning a second home for private use or long term lets.
Many people let out second homes, but it is vital to realise that the rules change significantly when you are letting out your second home to members of the public as a holiday home.
There are legal Health and Safety obligations that you must understand and comply with, as otherwise, you run the risk of prosecution.
In the UK, you must check that the electrics, the gas and all furnishings in a holiday home are fully compliant with the latest legislation and that installations are checked regularly.
Take expert legal advice if you are renting out a holiday home abroad as each country has its own laws. The whole area of public liability is fraught with pitfalls, so do not fall into the trap of being unaware of your responsibilities, as ignorance is no defense in a court of law.
You must have specific holiday homes insurance, including public liability insurance. Make sure that you read all the small print in the insurance policy as you will need to make sure that your policy covers the specific needs of your holiday home and failing to do this is a pitfall that trips up many.
Another potential pitfall is failing to supply the details and items your guest may need if their holiday does not go according to plan. Think through the kind of things your guests may need in an emergency and supply these at the holiday home. Such items could include contact details for hospitals, police and so on, as well as items such as a first aid box, fuses and torches. Failure to do this could mean that an emergency could become even more serious than necessary.
You will also need to decide if you are going to use the services of a holiday home property management company or whether you wish to manage the property yourself.
The latter can be problematic, especially if you live some distance away.
If you decide to secure the services of a holiday home services specialist, you will benefit from their years of expertise in avoiding pitfalls and making sure that the holiday home rental runs smoothly.
Remember there is a long list of aspects you need to consider and arrange. You will need to arrange professional cleaning services, key holder services, customer liaison, maintenance and repairs, gardening, inventory checking and so on.
Each of these items include their own specific risks and pitfalls, not least the risk of being let down by friends and neighbors, if you ask them to help with these tasks. So there is a big advantage in handing all of these responsibilities over to a holiday home services specialist.
With effective planning and specialist guidance, you can avoid the pitfalls and establish a profitable holiday letting business.