Following on from our article debating the Pros and Cons of Short-term vs.Long-term lets for property investors. If you have decided that a short-term holiday let is the best choice based on your individual circumstances and preferences, then read the My Getaways ‘secret formula’ short-term rental investment tips to learn more about what you need in place when selecting a property to invest in as a short-term let.
Number One: Why are you investing?
If you are considering investing in a holiday let or serviced accommodation for business travellers, make sure it’s for the right reasons and that you have carried out extensive research and done the maths.
Here are four good reasons to invest in a short-term let:
- You are buying the property as your own holiday home and want to cover the running expenses by renting it out for short periods of the year.
- You can see the trend in holiday lets and serviced accommodation and want to enjoy the higher rates they deliver.
- You have investigated the tax advantages of a short-term let and would like to benefit from these
- You love hospitality and travel: There is nothing more rewarding than welcoming guests to your accommodation and receiving great reviews. You are making happy memories!
If you are looking to invest in property hoping to enjoy a passive income generator, owning a short-term let is not going to be for you, unless you invest in a professional team to support your journey, such as My Getaways.
To run a successful holiday let you will need to work hard to create a welcoming and comfortable environment and long-term, the property must be run as a five-star home-from-home.
Number Two: A Flexible Investment
If your plan is to enjoy the flexibility of a short-term let and enjoy the property yourself, factor in that within the first couple of years you may only be visiting the property in between guests to carry out maintenance checks, replace damaged goods, stained towels and bedsheets, etc.
However, if you are looking for a sound, long-term investment, a holiday let can be a great choice. Manage it well, rent it out as much as possible during the initial years – only using it out of season, or when you don’t have bookings – and aim to pay the mortgage off as soon as possible. This way, you will have a nest egg and a holiday home waiting for you when you retire.
Number Three: Can I Make Money?
The simple answer is yes. But as with any business, you have to work to make it successful.
If you want to continue using the property yourself and are closing off high season dates for personal use, it’s unlikely that you are going to cover annual expenses.
Here’s an easy way to look at it:
You have 12 monthly mortgage payments and 12 high season weeks between the end of June and mid-September.
Within this period you can charge the highest weekly rental rates. Ideally, each week will at least cover a month’s mortgage payment.
If you aim to rent the holiday home out for the entire high season period, you will be able to cover at least the year’s mortgage expenses and possibly more, if you are charging a higher rate than the monthly mortgage fee.
The bookings you achieve through the mid-season months of April, May, October, school holidays and low-season periods will cover expenses and in time, turn over a profit.
Number Four: Your ideal guest should dictate the property you invest in
If you want to achieve positive results from your short-term rental investment:
- A healthy, regular income
- Guest satisfaction
- Winning repeat guests
The first task, before you’ve even purchased your property, is to decide on who your ideal guests would be? Ideally, you want to attract guests who will enjoy your home and take care of it during their stay.
Think about the different traveller types and niche markets, before deciding on your ideal guest.
- Families with children
- Young couples with no children
- Business Travellers
- Friend or family groups
- Active holidays
- Retirees
- Travellers with disabilities, to name a few….
Each guest profile has very specific and individual needs. If you can deliver accommodation that meets their expectations 100% you can be assured of holiday let success.
Just like you
Think about what type of accommodation you would want to book as a guest?
And which traveller type would you like to welcome into your home?
This can be according to your personal situation/experience or your interests:
- I am a business traveller who identifies the need for a better class of serviced accommodation
- I have two small children and would love to find more family-friendly accommodation in the centre of Brighton.
Whatever you choose we highly recommend you take your ideal guest into consideration when selecting property types and a location.
Number Five: Choose a location based on your chosen traveller type
Families with children
If you want to attract families, choose a location that is away from a lot of noise, such as bars that are open until late, and ideally a location where there is easy parking.
The location should also be safe, away from busy roads, yet within close proximity to amenities.
Young couples and friends
Young couples without children might want to be situated in busier areas, with a more upbeat ambience. Close to bars, restaurants and nightlife, with everything on the doorstep.
Senior couples & retirees
Senior travellers might be looking for a more peaceful location, yet with amenities around them. They will essentially want flat walking to local amenities, and a shorter driver to larger supermarkets, and public transport.
Business travellers
The business travel market is an important one. More and more business travellers are choosing serviced accommodation over hotel stays, for their flexibility, space and comfort.
If you want to attract business travellers we recommend a central Brighton address, or a location close to East Sussex business districts and business parks, such as Hassocks, Hurstpierpoint, Haywards Heath or Three Bridges; locations which also offer easy access to the M25 and London.
If you are targeting business travellers, take into account that their stays may be shorter, which means a higher volume of changeovers and management required, or longer for contractor and expatriate stays.
Other things to take into consideration when choosing a holiday let investment location are views, noise pollution, distance to public transport and access to road links, and of course what activities are around you: beach, parks, attractions, sports, walking routes?
Think about your ideal guest. What will attract them?
Number Six: The ideal property size for a rental investment property
The size of the property you purchase should depend on two factors:
- Your purchase budget
- Your Ideal guest profile
If you want to attract families or group bookings, you’ll need to invest in a large multi-bedroom apartment, townhouse or country property.
Many families are now taking multi-generational holidays with children, parents and grandparents, and are looking for a holiday home with space for the whole family. It’s called ‘togethering’!
If your ideal guests are younger or senior couples, travelling without children, then investing in a smaller apartment is perfect. Aim for small, but perfectly formed.
If you have a high budget and want to attract the luxury guest market, then consider investing in properties with a unique selling point, direct sea views and parking in and around Brighton & Hove seafront, Kemptown or Brighton Marina.
When marketing to large groups or organisations, it’s absolutely essential to have a team in place to cater for their needs. My Getaways will be on hand to act as a property manager, housekeeper and concierge.
These experiences need to be finely tuned for the guest and therefore it’s essential to get a professional company in place to manage both bookings and guests.
Number Seven: The Layout
The location and type of property are not the only consideration when choosing a short-term let investment. The layout of the accommodation, both inside and out, is also an essential part of the selection process.
And as with the other two factors will entirely depend on your ideal guest or traveller type.
Family-friendly: Is there space for children to play, and adults to relax?
Business-travellers: Is there space for a work-space set up?
Family or friend group: Is the kitchen big enough to cater for larger groups, are there enough bathrooms?
Accessible accommodation: Is there work to do to make the property accessible? Wide doorways, wet room, ramps.
There are so few properties that offer accessible accommodation in Sussex, particularly in Brighton & Hove, you could achieve a very high return on investment if you spend some money adapting your property.
Number Eight: Features of a short-term rental investment property
As well as the type and layout of the property you must also consider how to equip your short-term rental to attract your ideal guests.
Features such as heating and cooling systems, high-quality kitchen appliances, hotel quality beds, bed linen and towels, super-fast WiFI and a Smart TV with a choice of channels, Netflix, Prime, etc.
All of these features are considered standard needs for today’s holidaymakers.
Family-friendly features
If you want to attract families, make sure you equip your accommodation with baby equipment, such as a travel cot, high chair and stair guards if needed.
You can also add fun elements, such as games, children’s books and films, beach games if you are located close to Brighton beach or along the Sussex coast.
The more features the property is equipped with, the more appealing it will be to potential guests.
Other features that help a guest decide if your accommodation is going to be comfortable enough, are a good selection of kitchen equipment and comfort extras, such as quality linen, extra towels, and good quality welcome packs so that they can pack lighter.
The same goes for comfortable furnishings and a well-maintained property. If you regularly maintain your property or have a company on hand, such as My Getaways to handle the maintenance, your accommodation will have greater appeal compared to one that needs a lick of paint, sofa change or dripping tap.
Once you have purchased your rental investment, furnished and equipped it to attract your ideal guests, you can start to enjoy a return on your investment.
Your prices will be set on a nightly or weekly rate and if you market your property well and charge a high occupation rate you can earn around 50% more per annum with a holiday let.
Get in touch with My Getaways if you would like to get a no-obligation assessment on your short-term rental property, or would like advice on where and what to buy to maximise your rental income.