Today I decided to work out the difference between renting my house in Fuerteventura as a holiday let vs. a long term rental. I sacked my agents last July which I wrote about here, I also updated you about the joys of holiday home ownership here!
Now almost a year on and with my bookings calendar complete to the year end I am able to sit down and calculate was the extra effort and expense worth it?
So let’s be honest when I decided to rent my property as a holiday home and manage it myself there were cost implications. Firstly, I had to provide a lot more furniture and stuff at the apartment than what I did before and I had to upgrade several pieces. The sort of furniture you have in a holiday rental needs to be a better quality than in a long term rental – after all you only have a week to make a good impression so the bed better be comfy!! In a holiday rental you also need more “stuff” than you would normally provide in a long term rental – so I had to buy some added extras such as an ironing board, an iron, hairdryer, TV, stereo etc. And all those extra things cost money!
As a holiday let you then have the cost of advertising. I decided from the outset to go with Holiday Lettings and they have been very good. It cost me about £280 to advertise for the year. While the cost of advertising on holiday rental sites seems quite a lot (especially when you have to pay for it in a lump sum and upfront) when compared to the 10% you would pay an agent for managing your property it compares very favourably indeed! But let’s be honest, if you are paying an agent a managing fee then you don’t have to manage the property and so you don’t have to worry about the advertising at all – so I’m not comparing like with like there.
So let’s compare the amount of time I now spend managing the property as a holiday let compared to when I had it managed by an agent as a long term rental. I have totted up the amount of time I spend on the property and it works out about 2 hours per week, or around 8 hours per month as a holiday let. Previously I would spend maybe 2 hours per month as a long term rental as the agents would always be onto me about something – whether it was the water meter reading or to tell me about a maintenance issue – there was always something which required me to think about, decide or act – or do something!
What I want to stress though is the quality of that time spent now as a holiday let vs. the time I spent when the property was managed as a long term rental. Previously I found everything to do with the property was a problem that was being reported – a maintenance issue, a tenant issue – whatever – it was always negative. Now, when I look at the time I spend on the property it is always positive! Yes, I have had a couple of maintenance issues but in the main my time is spent chatting with holiday makers in a positive light. My time is spent recommending places to go, listening to what they’ve got up to, taking bookings, taking monies – it’s all positive! So in terms of a trade off yes I spend a bit more time on it – but now the time I spend is positive. It’s fun stuff. I get so excited for the holiday makers as well and I love hearing their recommendations and things they’ve done – and it also means I have more things to discover when I go back.
Now the biggie that you are waiting for – financially was it worth it? The answer is a big resounding YES! The property now earns 44% more as a holiday let than when it was let as a long term rental and the huge benefit for me is that I get to use my home as well! Before when it was let as a long term rental I couldn’t stay there. But now it’s a holiday rental I get to spend a lot of time there, have friends and family there – and I am still financially better off! And amazingly in the first year we have now already recouped the additional monies that we spent upgrading the property to a holiday let.
So I am chuffed – I am thrilled to say my first year in managing my holiday let from thousands of miles away has been a success. I am financially better off and I am emotionally better off – I now have a place in the sun which I can properly call my own – and which I can stay at too!