My book, Room For Profit, shows you how to make maximum income on your holiday home, wherever in the world that may be. Over the coming months, you can enjoy extracts from the book here.
This time, let’s look at some common excuses for not maximising the available rental calendar from Room for Profit, Chapter 8 – Maximising Your Money.
We’ve heard some great excuses over the years. For some people, cutting down their rental calendar to a minimum of weeks somehow sounds like a good idea. Consider these statements below.
1) “I don’t want to rent my villa in Queensland, Australia for more than ten weeks a year in case it gets trashed.”
2) “I only like to rent our Berlin, Germany apartment in summer because the heating bill costs a fortune.”
3) “I’m not renting my place in France for any more weeks because I don’t want to pay any more tax.”
4) “If I get 20 weeks’ rental per year for my Californian house I’m happy as that covers my mortgage.”
5) “My place is worth £1,000 a week, and it’s not worth renting it for less. If I rent it for less, I’ll get budget people who smell and won’t look after the place”.
Let’s smash these myths once and for all. After all – as we’ve seen – the more you rent, the more you make.
1) We know of no rental properties that have been ‘trashed’. Most property agencies charge a damage waiver (as seen in Chapter 4). Moreover, the sort of clients who can afford a ski chalet in St Moritz or a pricey apartment in London are not the sort of clients who would trash it. People trash hostels, but not £250 per night pied-à-terres where they have left a digital trail including their passport, credit card and postal address enmeshed in their booking. If your property is trashed, then we’re sorry. But allowing ten weeks or rental, not 40 weeks of rental, won’t alter the probability of such a random event very much.
2) Your heating bill in Berlin won’t break the bank if your apartment is rented in December. Yes, guests will use more hot water, lighting and heating in winter. But this sum won’t be greater than your weekly rental income. If it was, then the entire German nation would go bankrupt.
3) The old ‘not renting your property in case I pay too much tax’ idea. It’s like saying ‘I don’t want a pay rise because I’ll only have to pay more tax’. The phrase is a well-used excuse for not getting your property on the market in the first place. As in the above example, you may pay more local taxes if you rent your property for a longer period. But this sum is extremely unlikely to be greater than your weekly rental income. If it was, then the entire French nation would pay more in tax than they earn. They don’t (it just seems like that sometimes).
4) So 20 weeks of rental income pay for your Californian holiday home? Bravo! How much is that by the way? $8,000? $16,000? $32,000? If you’re not using your holiday home those other 32 weeks per year, why not treat yourself and double your income by renting for 40 weeks instead of 20? (If you don’t need the money then our address is on the cover of this book. Thanks!)
5) Says who? Your rental space is never worth what you think it is. It is worth what someone is willing to pay. Yes, if you’ve done your homework and it does seem to be worth £1,000 you might get that most of the time. Are you really going to give up 10 bookings at £900, that’s £9,000 when the right price doesn’t come through? People who pay a little less do not smell any worse than a higher paying guest. They may smell much better. In fact, guests who feel they got a good deal are far more likely to look after your space than a guest who think they paid too much. And more likely to tell others.
Next time, we’ll talk about how to make a great short term letting host over the coming decade. Can’t wait that long? Room for Profit is available to buy in paperback or kindle through Amazon UK, Amazon US or Amazon Global.
Gayle is happy to speak to buyers about buying a short term rental investment in Nice. She can be reached at email@example.com
Catch Gayle’s interviews on BBC London, Share Radio, Informed Choice Radio and Real Estate Radio. Details on our facebook page.