Anyone here run a self catering business?

[justdoit]

I own a 1200 square foot 3 bed cottage in rural tourist area which I think has great potential for short term self-catering letting. The cottage is currently empty most of the year as we only use it maybe 1 week every 3 months. Its been in the family for years so I don't want to sell it, but feel that it would be a pity not to turn it into a financial income producing asset.

Anyway I'm thinking of letting it on a self-catering basis (don't want to let it to long term tennats as we wouldn't be able to use it at all) and would expect to achieve approx 40% yearly occupancy based on the research I have done, which would bring in approx £10,000 per year.

Now I'm trying to get my head around just how much work is involved in actually running a self catering cottage and the types of problems people typically encounter to see if it is worth it.

Can anyone give me a good idea just how much work is typically involved finding and booking clients, making sure they are happy, dealing with problems etc

I should mention as well that I live 2 hours away so I would need to pay someone locally to clean the house after each visit and be on hand for problems etc.

I appreciate this is a bit of a vague request, but I'm just looking to get a feel for the scope of this undertaking before jumping head first in!

Thanks

 

[Alex@Iansprint]

I can't comment on the locality or any of the details but as far as my experience of renting self-catering accommodation goes, I will help where I can!
I have used Owners Direct before, and this may be an avenue to explore?
As for having it cleaned etc, maybe enquire within the locality, do you have neighbours who would be willing to help out in return for a fee?

All the best, and if you want some flyers to advertise it, don't hesitate to get in touch

Alex

 

[Rainbow Chasers']

If you are not close by, then you will as you say, need an honest and good, reliable cleaner - not always simple to find - especially as you cannot check on things.

You will also need, laundry services, a maintenance man/contract who again is honest and reliable and can attend at the drop of a hat (someone retired maybe?) - they will also need to meet modern standards though!

I have seen lots of handovers done with no-one presnt, by using keysafes that are concreted into a wall. The customer enters a code, then it opens to access the property keys. Inside, you could leave a step-by-step guide/dvd to the house if you didn't want the logistics of having your cleaner wait all day for clients to turn up - again quite a commitment!

I take it the house owes nothing - if it does, then it will need to be cleared through any finance houses - there is also council tax for second property etc.

Insurance, liability etc and that should be covered - after that just advertise on a variety of cottage let websites, and off you go!

 

[*Lexxy*]

we looked into buying a property & doing this a couple of years ago but didn't go ahead as it just wasn't viable, which was fortunate as prices are still dropping in the area now!

this is a good site for info, http://www.laymyhat.com/forum/ it's mainly owners with property abroad, but there are some UK owners.

for 'selling' yourself http://www.holidaylettings.co.uk/ is a nice user friendly site & not too expensive to list.

like us, your main hurdle is going to be distance from the property & the extra costs this involves, finding someone reliable might not be easy.

research, research then a bit more research is the key!

good luck

 

[justdoit]

Thanks for all the responses.

I do have a reliable neighbor close at hand who mentioned they would be keen to take care of the cleaning and laundry (@ £10 per hour). Assuming it gets filled 20 weeks a year, how much work do you think this would involve? I'm thinking approx £25 per week's visit so say approx £500 pa for these costs.

This leaves the issues of marketing and handovers.

For the handovers I like the idea of the box with the code for the keys - the only problem being that I would have to check that the keys have been returned to the box at the end of each visitor's stay. I guess the neighbor who will be doing the cleaning would be able to manage this and keep a spare set if need be.

For the marketing, I'd hope most of this can be automated via the internet and most communication could be done via email. Can anyone confirm how much time managing this side of things actually takes. Would 30 mins per weekly visitor seem reasonable. Say 10 hours per year?

Are there any current self catering business owners who can give me an experienced idea if these seem reasonable?

My other concern is that there is likely to be a much higher likelihood of the tenants causing problems (such as trashing the place/breaking furniture, stealing things) given the high turnover of visitors. Is this common place in the self catering business?

Answering the above will help me to decide if its personally worth the hassle/stress/work:|

Thanks everyone so far.

 

[*Lexxy*]

i can only answer based on the research i did & it's a little difficult without knowing the area or intended market, ours would (will be one day!) have been a sea front apartment in a busy Cornwall town (probably the opposite market to yours?).

admin time on each enquiry/actual booking - no idea how you'd quantify/estimate this as each will be different, some customers will be perhaps 1 email & a phone call, another could be backwards & forwards umpteen times wanting every little detail before they book (& you can bet a fair % won't even make a booking!).

problems - yes, potentially. 1 apartment we stopped in last year is marketed through one of the most expensive agents for the area, for how much they charge the owner (25% commission from memory) & the holidaymaker. you would hope this would get the more discerning visitor? no, previous people to us had made a right mess & caused a fair amount of professional cleaning to be done (the place was all ok for our stay, this info was from a lady who lives there full time & we know quite well).

there will always be breakages etc., but you should be taking a deposit which should cover this. would have to make sure your T&C's are pretty clear & legal though.

i think your expectation of 20 full weeks a year is a little optimistic, but as i said, without knowing the area & what other holiday lets are managing, it's difficult to say. we worked our figures on full weeks for the school holidays & main bank holiday weeks only. i would have listed ourselves on holidaylettings & got our own website, with prices a decent % under similar in the area. i keep my eye on a few properties & these are the only ones with consistently good occupation (if the information on the owners websites is true of course!).

 

[justdoit]

Thanks Lexxy. That's very useful insight.

 

[justdoit]

I take it the house owes nothing - if it does, then it will need to be cleared through any finance houses - there is also council tax for second property etc.

Insurance, liability etc

Thanks RC.

You are correct no finance. Can you elaborate on the council tax for second property?

Also any ideas of approx insurance liability costs?
thanks

 

[justdoit]

ps laymyhat is a great site. thanks a bunch for that link

 

[NeilLynne]

I guess by now you probably have an answer?

We have been running a self catering cottage for about 4 years. We live in Bristol, however the cottage is located in Dartmouth Devon approximately 2 hours drive from home. We employ a cleaner, which realistically is the only way to run such a business from a distance. You will need to find someone you can trust, which fortunately we have found. I am sure you are aware there are many potential pitfalls, living so far away from your main residence, knowing someone who can pop around, even when the cottage is not booked is essential.

We are a very busy professional couple, but have taken on all the marketing responsibility for the cottage. You can take a far more hands off approach if you do not want it to eat into your personal time. There are loads of cottage rental companies, who will handle all of the marketing, customer payment and administration of the business. These companies will typically take about 20 - 30% of your income, but can make this an easy inroad into self catering.

We run our own web site for Drum Cottage and take most of the bookings directly. I guess this takes about 3-4 hours a week, more in the summer.

I hope this helps.
Regards

 

[Katy Radcliffe]

I used to clean holiday lets when I lived in Argyll.

I have to say that if you want a reliable cleaner, don't be stingy. I was told "Oh, the going rate is £6 an hour." And, I always wondered "Then why don't you already have a cleaner?"

You're asking someone to be available every Saturday, even though you may not have work for them on any given Saturday, and they'll only be working 2-4 hours. Make it worth their while to be available to you when you need them.