If you’re planning to let a holiday home, you should approach it in the same way that you would when starting any other business: you need a plan for creating the right product (the property), bringing it to the market (generating bookings) and managing costs.
Whatever strategy you choose to carry out this business plan, you should have a clear set of overall objectives; business strategy can be changed according to external influences or a change in circumstances, but your objectives should remain fixed.
Aims and targets
Set realistic, achievable occupancy levels for the first 12 months, then raise this target slightly in each subsequent year. This way you have a plan for steady growth and an idea of projected income.
Before you start taking guests, you need to have a structure of operations in place. This includes provision for emergencies, such as a gas boiler breaking or a guest being locked out, as well as more routine things, such as a cleaning and maintenance schedule and a projection of when furnishings will need to be replaced.
All costs should be carefully documented, to ensure that the rental income is more than covering the overheads. Costs include everything from the mortgage payments and maintenance costs to marketing and management fees, and these must be collated to create a profit-loss projection. Holiday lets are typically seasonal in terms of income, making this projection even more important for planning purposes.
A contingency plan
If your original business plan fails to deliver, you should have a back-up strategy in place to allow you to try a different approach. This should be an approach that will either target a different market to increase bookings, or reduce your costs.
An exit plan
It is also worth having an exit plan in place, should you need to sell the property. This involves keeping a regular eye on local house prices and establishing your liabilities for capital gains tax.