Can holiday homes ever pay for themselves?

[ThisAzureFox]

Can holiday homes ever cover their own costs if you rent them out? Perhaps having a couple of weeks out for your own use.

We want to own somewhere to use for the real long term but can’t afford £3,000-4,000 a month.

If you can't afford to pay for it, you can't afford to run it.

How will you manage if you don't get enough bookings? Damage caused to the property / furnishings etc?

It's a big investment, and can be high risk.

I think as long as you have a large enough contingency fund to dip into with repairs, and have done your research into market rates in the area, you'll be fine.

At some point I'll buy an existing holiday let in my favourite town because I love the area in 'off season' ~ so will be able to rent out in the summers etc. I made some initial enquiries and was able to get a decent breakdown of previous annual earnings etc at an early stage. As much as everyone says they're a money pit, plenty of people out there seem to be making money off holiday homes!

I've a lot of friends who have holiday let businesses. Proper businesses it's their living.

They don't make much profit per property given the effort and they don't take any time there themselves or have any borrowings.

The furnishings, business rates, laundry, cleaning costs, commissions and utilities are high. They make almost nothing in the winter but do take bookings as it keeps loyalty with the contracted services that they absolutely rely on in the high season.

Dealing with the public isn't easy.

They've turned up on changeover days to find things left such as: 3 broken curtain rails. A sofa that was urine drenched. A family refusing to leave because they were ill and didn't want to get out of bed.

It all depends on how much you do yourself. If you're going to do your own marketing, websites, handling bookings, organisation of cleaners, repairs, maintenance, etc., then it can be a very good business, but that's what it is - a business. Any business takes a lot of time and effort to run.

If you don't want to deal with that, and want local agents to do the marketing, bookings admin, cleaning & maintenance, you'll be paying a small fortune to them to do all that. Typically 25% of income for the marketing/management alone, plus wages for the cleaners and maintenance people

Plus costs of replacing fixtures & fittings, soft furnishings, bedding & linen, welcome packs, etc etc. Plus of course, management fees of any complex it's based on for maintaining communal areas, freehold building repairs, swimming pool maintenance etc etc.

If you need to borrow and pay interest, there'll be little "profit" left, even less after agents and other costs if you don't manage and clean it yourself!

Lots of people make good money out of marketing, managing, cleaning and maintaining other peoples' holiday lets!!!