To those who run holiday cottage/ glamping- can you advise me?

[Twoshoesnewshoes]

I work in quite a stressful sector and would like to step down after my youngest leaves Uni in three years.
I have always liked diy, doing up properties, planning land etc.
so I’ve been thinking for some years that I’d like to do holiday cottage and/or a small glamping project.
I need to bring in around £1500 ish after costs each month.
my friend who has a one bed annexe thinks this is achievable- any thoughts? It can be average over a year.
I would aim for a two bed cottage, or three caravans plus bell tents, or a combination of the above.
we live in a beautiful popular area of Devon.
thanks!

Anyone?

I think this business carries an element of risk that means if you need to bring in 1500 pcm to afford to give up your job, it's probably not the venture for you.

Is that 1500 pcm for twelve months of the year?

I have a friend who was running a cute little AirB&B on the edge of a really touristy place, very popular with walkers. It was £50 a night in March 21; by winter 22 she had to put her price up to £75 a night because the cost of heating it had gone up so much. Come April 23 when she'd usually get booked at least half the nights of the month, she had 4 individual nights booked.

The bottom just fell out the market in her area. Maybe people wanted to go abroad and get people to cook and clean for them for the same money? Idk.

Also, someone nearby opened something bigger and fancier.

I was shocked when she told me, so I looked within a 5 mile radius during the coronation weekend - a bank holiday - when I would be expecting lots of families would be getting away for a long weekend. I couldn't believe how many of the venues were still bookable. And at prices I thought seemed better value for money than the last time I'd looked.

They're very affected by weather, as are a lot of these ventures, I believe.

For me (a very risk adverse person), if I NEEDED an income, this wouldn't be the route I would take.

my friend who has a one bed annexe thinks this is achievable-

How many bookable nights has she been booked out for over the last 12 months? Because that's what my friend has, a one bed annexe. Are you sure she's not just buttering you up to move to her area because she likes your company? :)

Thank you
haha my friend lives about half an hour away, had her annexe running for a year - she has made £14000 in that year.

yes I need £1500 a month all year really.

all year really.

I think that's the part I'd be most worried about.

DH and I made approx £1100 per month after letting agent's commission and fees, on a luxury 1 bed house. It was let 49 weeks of the year because we allowed dogs, made it super dog friendly (properly enclosed garden, throws on sofas, water bowls etc), it had a full Sky package, off road parking, a log burner and was 100m from a pub. A very similar house three doors down was only full half the time as it wasn't "luxury", didn't have off road parking and most importantly, didn't allow dogs.

I think average occupancy rates for STR in the UK are about 55-60%.

What is the average nightly cost for similar 2bed cottages in your area?

Would you use AirBnB or another platform?

Would you manage / clean yourself or pay someone else to do it?

Do you have the up front money to make a property meet the new regulations?

On glamping - do you already have land?

Would you need planning permission? Have you got a sense of whether it would be granted? Are you in a heritage area / AONB / national park?

What is the average nightly price for a caravan in your area? How does it differ to a bell tent?

How would you market it?

Would it be an all year site or just part of the year?

These are some of the questions I’d be asking myself if I was thinking about it

Very much depends on the type of property/ area but I think it’s going to be really difficult to make that every month. Most people I know are happy if an holiday house washes its own face (pays for itself). Also is this after costs, like cleaning, insurance, heating, electricity, council tax, water, replacing stuff? Unless it’s an incredibly unique property on the beach in Cornwall or something this is a big ask. Also some years can be great, others not so good (depending on weather/ cost of living etc). I don’t think the last few years have been great as people are still taking covid cancelled holidays and many people who can afford to go away are going abroad. But I think you’d need to sit down and do the figure based on prices/ expenses where you are.

i think you may struggle tbh OP, if you use an agent to market & handle booking etc they take quite a lot of commission, then cleaning, laundry is expensive unless you are prepared to do that yourself, I feel quite sorry for the cleaning team, they have to deal with some quite unpleasant things 😱 unfortunately. Not every guest leaves the property as they found it.

Also you need to be prepared to replace damaged items (so far since April, we have replaced 6 towels, one duvet, king size sheet, x2 bath mats, x2 throws, glasses, coffee table)

uk booking have been down this year tbh. Who knows next year might be a better year. But if you need a guaranteed income, and possibly need to borrow to set up the lets. Think carefully.

Thanks, this is all really helpful.
to answer some questions- I’d use Airbnb, yes cleaning and maintenance myself most of the time.
we will have the land and annexe already so no additional costs there, but of course lots of additional up front costs like bell tents and loos etc.
round here - high season bell tent £130 a night ish I think

Just doing some quick maths, you’d need to do this in much more detail -

£1500 pcm profit = £18000 a year profit

Lets assume an average occupancy - which is about 55% for STR in the UK

So an occupancy rate of 201 nights per year

18000/201 = £89.55 of profit per night of occupancy

If you take your expenses away from the going rate for the different accomodation types in your area, do you get at least £90 left?

That would be the initial maths I would do.

Have you got any sense whether accomodation in your area was well booked this summer?

Are there lots of glamping options already near you? Can you do something different to what they are doing?

oooh thanks @cherryassam
yes I would have around £70 to £90 per unit after expenses, planning on three units.
im wondering if a hot tub is a good investment- to add something special as you say.
my friends have wood fired ones which is cool
or warm, rather

I have a fhl - get on facebook and join a few forums there is a useful group for uk airbnb owners and a uk hospitality group, both are full of advice and stories or the good and bad experiences to be prepared for.

Everyone on there will tell you about PASC - professional association of self-caterers - they will help you with understanding all the legislation, tax implications etc.

Airbnb and booking who we use are becoming more and more difficult to work with. They are trying to weed out some of the worst accommodations by bringing in sweeping policies - but these make everyone's lives more difficult. If you are happy with admin and customer services learn more about how to get direct bookings, you will get more per night as not paying commission rates and you are more in control, but you can't hide behind a big corporation if things go wrong. ie your guest trashes the place you can use Airbnb to mediate and get money back, but direct booking you need to have a deposit to hold and be willing to deal with the customer yourself.

If you can do all your own cleaning and DIY and marketing and are prepared to treat it like a proper job not a side hustle then you can at least maximise your returns.

Thank you, I’ll look at those forums.
yes it will be my full time job!
interesting about Airbnb- what are they trying to change?

Airbnb have now got more severe penalties for hosts who cancel bookings because guest were losing 'trust in the community'. If you have instant booking - which guests prefer so gets you more bookings - but you find out anything about the guest which means you don't want to host them or you do something silly like double book yourself then the penalties are huge.

We have only ever cancelled one guest because from their message they had booked for 16 adults which is our house maximum and were bringing 7 extra children! We did this without penalty under the clause ' this property is not suitable for the guest' but that clause has now been removed. Now we would have to prove that they intended to break house rules. The financial penalties are very high. Just read all the T's and C's very carefully.

Airbnb will always side with the guest and some guests do try it on to get money back.

We have seen guests wanting money off more and more. They are two guests but want our 3 bed house reduced in price. I will reduce as it’s a booking but we are fairly competitive in the first place.

Bookings are volatile. You cannot plan. For glancing you need sewer and water connection by the way. That’s not always possible.

We don’t make £1500 a month overall on a 3 bed modern house with glorious sea views in Cornwall. 4 bathrooms and private parking. Our expenses are high. We do use an agent and she’s in our village. Extremely helpful.

Also beware allergy guests. We now say we cannot cope with allergies. We have had people object to the stair carpet, feather cushions and rugs. Then they want loads of money off. They pretend there have been dogs in the property when that’s not the case. It’s stressful. They also break things. I’d sell if I could.

I would reiterate on booking.com becoming difficult. We lost 2 potential weeks of bookings over the Summer peak season because booking.com had our property incorrectly listed as unavailable despite being asked to change it. Recently a guest had an issue and was unable to contact anyone at their helpline for support. We fortunately discovered the problem and sorted it out for them. They left us a lovely, glowing, written review but noted they had marked down the score significantly because of their problems with booking.com. Unfortunately, that impacts our overall metrics on the site, despite the guests already asking us about rebooking directly. Booking.com couldn't give a flying monkeys when we complained.

Do you already own the property?
Will you be doing the cleaning and laundry or will you be outsourcing it to another business?

Are you factoring in buying and renovating costs into your profit?

There are strict new rules coming in for holiday lets too.

We have a gîte plus have run a couple of holiday cottages in the UK.
So: the market is very variable, I've had a good year this year, but the number of British guests has fallen off a cliff. Just about all this year have been Dutch or French. Friends in the business in the UK have been struggling to get bookings this year- being forced to discount heavily while their costs have risen .

Guests are much more demanding- wanting better facilities for the same money. Your standards must be really high- the place must be absolutely spotless, gone are the days of using granny's old sofa and cheap mismatched crockery. Hot tubs are a great selling point, but require a lot of maintenance with strict hygiene rules so factor in those costs.
Dog and child friendly- have a look at places which advertise as this and look what they provide- a fully fenced private dog field is also a strong selling point.

Don't just go with Air or Booking- there are smaller more specialized agencies out there who are easier to deal with and still get in the bookings. You will need your own website and Facebook page too.

Have a good look at other cottages and glamping places and see which are booked up and which are not.

Good luck!

Thank you! Lots to think about!

Be prepared for the unexpected.
I have just forked out £1400 on roof repairs.
Routine maintenance has to be done, think oven cleaning, regrouting the shower, repainting, replacing time expired alarms etc. All costs.

i need to bring in around £1500 ish after costs each month

So you need to make 1500 in pure profit? You have to pay tax on that income over the personal allowance.

The tax thing is fine, I won’t be much over the personal allowance.
im having second thoughts now though! Just over whether I’ll make the income.

We make about that per month ( it’s only rented about 4 months a year). It’s open all year though, just it mainly peak June-sept with odd other weeks. So it’s higher in summer and then several months at €0

However that isn’t profit. Insurance, higher utility costs ( winter guests have heating on blasting, or use tumble dryer daily in peak summer etc). Plus we have to pay a local tourist fee. There is constant renovation and maintenance costs also, such as this year from gardening costs like plants and wood chip, new planters, auto watering system on balcony. We have added new bike storage shed this year (€€€), new bedding (it’s high quality and €€), coffee machine, dishwasher repair.

we also had entire new heating system fitted last year, that included our part of the house but cost a fair amount more in having separate system for apartment, and making sure new water tank was larger and efficient for more people using it.

For us it worth it as we live on site, I do all maintenance myself and cleaning and bookings. And the renovation costs are for us also as when not rented it becomes part of main house and in future we will open it up to make larger single property. So the renting covers these things we would need to do anyway. But it doesn’t really make a large ‘profit’ as such.

The only way really to make profit is no frills rentals, with nothing premium bought, and no maintenance ever done. And don’t provide anything

If you want £1500 in profit then you will probably have to have a turn over of around 1750 just to cover costs and that doesn't include any costs that booking sites may charge or cleaners

That means you need to being in nearly £450 a weekend. So 225 a night if you have one property and it a a two night weekend. Feels a lot

We have a two bed cottage with sea views, 5 mins to beach, large deck and garden, hot tub in a 'glam' area and would only be able to charge that at the absolute height of summer.

We make around £12k a year and we are booked every weekend. It costs us around £50 in costs to host guests for a weekend (extra electric, washing, cleaning products, restocking consumables) even though we clean ourselves so profit each year is around £9500 so we fall short of your £1500 profits a month by nearly half.

Thank you that’s so helpful, yes you’re right that my figures aren’t adding up.
im looking at three units but probably around £120 a night each in high season as they would be shepherds hut or similar, maybe a couple of bell tents too in summer
sigh

Look into what licenses you need for all year glamping/units, at the moment you can do 60 days