Holiday homes are becoming the second step to security as it provides multiple options for the family. Settling down in a prime retirement location such as the Lake District, for instance, can make for a comfortable and striking settlement for the homeowner’s later years.
It’s also a striking space to spend the weekend over the holidays, making it an excellent lodging for getaway trips with family or friends. In addition to being a home away from home, renting holiday cottages can also be a lucrative business.
When done right, it can enhance the flexibility of your income and maximize your profits under one lease. Holiday houses for rent are particularly popular amount young adults as over 22 million households have this arrangement.
However, more income channels and tax breaks come with more responsibility. There are various factors you need to consider if you want to ensure success. This includes checking in with your state for housing compliances with the law to licensing, and fee requirements.
Preparation is critical to renting your vacation home, so the steps below aim to help you get started on the right foot:
1. Discuss Plans with Your Mortgage Lender
Before moving forward with your plans, the first and most crucial step is to talk with your mortgage lender. You will need to acquire consent for lease from your lender, which is a necessary document for starting out on your new business venture.
2. Update Your Insurance Provider
Aside from your mortgage lender, the next one you should contact is your insurer. For one, you will need to update your policies and obtain a landlord insurance policy to boot.
3. Hire a Reputable Agent
Hiring a letting agent when renting your holiday house – be it a staycation space by the beach or a peaceful land by the lake – is not necessary. However, having a professional by your side can save you time as they have the resources to cut back on your legwork, such as the following:
- Take the responsibility of advertising your property
- Showcase your house-for-rent to prospective tenants
- Create a tenancy agreement
- Make deals with tenants on your behalf
4. Prepare Your Property
Once sorting out your strategy, you can move forward and get your property ready for rent. This is the part where you need to decide where you will keep your house furnished or not, both of which offer distinct pros and cons. Other factors you need to consider before putting your house out in the market are the following:
- Be sure to remove anything from the property that is fragile or important to you.
- Assess your home from every corner and conduct repairs, fixtures, and fittings.
- Ensure all appliances are in working order.
- Give your place a small fix-me-upper to enhance its cosmetic appeal.
5. Weigh the Costs by Comparing Prices and Evaluating Your Home
There are many factors that you need to take into account when inspecting the value of your home, such as the following:
- Safety of the neighbourhood
- Curb Appeal
- Square Footage
- Number of Rooms
- Updated Appliances
While these are all face value, the aspects mentioned above all contribute to the property’s value as it influences rental demand and affects the vacancy rate of the market. Other elements you need to consider involves digging deeper into the numbers of your property’s costs. This includes:
- Comparable prices to other properties in the neighbourhood
- Having enough equity to cover exit strategies and a profit
- Having no need to borrow too much on buying costs and repairs, making for a solid loan-to-value
- Having enough cash reserves or after-repair-value
Renting a holiday home can be exciting for many as it opens up the opportunity for extra income, though the process can often be time-consuming and overwhelming.
There are various requirements you need to be wary of – from regulations, showcasing, updating your home to improve its value, to working with the right agency. With that in mind, the tips above should help you survive the entire process and help put your house out for rent in the market.
If you’re looking to buy one of our lake district holiday homes, get in touch with us and see how we can help.