Journal
Costs to think about when running a holiday let.
Are you a new property owner and want to know more about the costs of running a holiday let? There's lots to consider when setting up a new holiday home, so to make things easier we've put together a list of the main costs you will encounter when getting started. Read on to find out what the true cost of running a holiday let...
Initial Set-Up Costs
The initial costs of running a holiday let are usually the most expensive part of the process. Once the main things have been paid for, things tend to settle down into more manageable payments. Below gives you an idea of the initial costs involved.
Mortgage / Buying Costs
Whether you’re a cash buyer or plan to take out a mortgage, this is going to be the one of the biggest costs of running a holiday let. Make sure to set yourself a budget on what to spend and stick to that budget when viewing properties. To give you an idea, according to Zoopla, the average sold price in Whitby for a property over the past 12 months is £266,795.
Planning Permission Fees
If you require planning permission to extend, develop or erect additional buildings around your holiday let, this is another cost to consider. There’s not only the cost of the physical renovation work to consider, but also the cost of applying for planning permission.
Furnishing & Decorating
Once the sale of your holiday let has been finalised, it’s time to get it looking exactly how you want it! The cost of this can vary depending on how much work your property requires. New carpets, bathroom suites & kitchen units will rack up quite a bill, but if your holiday let just needs a lick of paint then the price will be a lot less, especially if you’re able to do the decorating yourself.
You will also need to consider furniture. It’s better to spend a little more money on high quality furniture that will stand up to wear and tear from guests, rather than going for the cheapest you can find. Cheaper furniture tends to break more often and will need replacing, meaning the overall cost could end up being more.
You might also want to consider putting a few luxuries in to improve your guests stay. Ideas could range from a coffee machine in the kitchen to a hot tub on the patio.
Stags Mount
Ongoing Costs
The ongoing costs of running a holiday let range from property insurance through to basic utility bills. Some of these are essential costs of running of a holiday let, but others such as broadband and TV subscriptions, are optional.
Council Tax
The cost of council tax depends on a few things – what area your property is in and which tax band it falls into. You can check your council tax band on Gov.uk then research which local council your property comes under to check the price.
Insurance
Regular home insurance will not provide the required level of cover for a holiday home. Instead, you will need to look at Holiday Let Insurance and Public Liability Insurance (minimum cover of 2 million).
Broadband
There’s now a huge range of broadband providers across the country, one to suit every budget. Try looking on comparison sites such as Moneysupermarket.com or Confused.com to find the best deals. These sites allow you to enter your property postcode and see which providers can cover that area, and what offers they currently have on.
On average, broadband can cost between £22-£38 per month, but some will do a cheaper deal for new customers so it’s best to shop around. Although it’s not necessary to provide WiFi in your holiday let, we highly recommend it. Properties that offer WiFi can receive up to 20% more income than properties that don’t.
Utility Bills
This includes water, electricity, gas and heating bills. Again, it can often be best to shop around and see which providers can offer the best deal for your property. If you have a log burner or open fire, don’t forget to factor in the cost of providing a fire starter pack for guests. This usually includes some firelighters, matches and a small supply of logs.
TV Licence & Subscriptions
To allow guests to watch or record live TV your property will need to be covered by a TV licence. The cost of this is £169.50 which needs to be renewed annually. If you’d like to pay for certain TV subscriptions for your guests to use, these often run on a monthly payment basis.
Manor House
Running Costs
Aside from the ongoing costs of insurance and bills, there are also the day-to-day costs of running a holiday let. Some of these include:
Cleaning & Laundry
After every changeover of guests, your holiday let will need to be thoroughly cleaned and the linen washed. When you come on board with Yorkshire Coastal Cottages and opt in to our fully managed service, we can organise this for you. Cleaning costs can range from around £65 to £250 approximately depending on the size of the property.
Property Maintenance
From time to time, your holiday let will require some maintenance. For example, tidying up the garden area, re-painting the walls, or a deep clean of the carpets. There may also be cases where something goes wrong, such as a burst pipe or leaking roof. The cost of this type of maintenance work may seem large at the time (depending on the scale of the problem), but these cases should be few & far between.
Welcome Packs
Most guests like to arrive at their holiday cottage to a small welcome pack of tea, coffee and biscuits. Although it’s not essential, we do highly recommend providing a welcome pack to your guests to enhance their experience.
Kaitkyella Lodge
Agency Costs
When you let your holiday home through Yorkshire Coastal Cottages there will be a few charges to consider. We understand that the overall costs of running a holiday let can be daunting to begin with. For this reason, we like to keep our costs simple to make sure you get great value for money along with excellent service!
Commission levels & fees
Yorkshire Coastal Cottages offer very competitive commission rates, which can be tailored to suit your personal circumstances. Please contact the local team in Whitby for more in-depth information.
As we are part of the Sykes Cottages family we have a multi-million pound marketing budget so we can promote your property to the highest level, getting it in front of the right people & securing you bookings. We work with over 700 partner websites, as well as featuring all properties on the Yorkshire Coastal Cottages & Sykes Cottages websites. This level of marketing would cost into the thousands of pounds if it was arranged individually, meaning you get extremely good value for money when you let with us!
Managed Services
If you’d like an extra helping hand with running your holiday let, our fully managed service could be the solution. We can arrange cleaners & maintenance, carry out periodical property inspections, and put together welcome packs for guests.
Are you still looking for some more information about the costs of running a holiday let? Our friendly, local team based in Whitby are always happy to answer your questions. Talk to our fantastic team today for more information on holiday letting by calling us on 01947 820949 or download your free owner pack here.
** This blog has been adapted based on original content written by Alice Wills Nov 2019
Please Note: The information contained in this article was accurate at the time of writing, based on our research. Rules, criteria and regulations change all the time. Nothing in this article constitutes the giving of financial, tax or legal advice to you; please consult your own professional advisor (accountant, lawyer etc). in this regard. If we have referred within the article to a third-party provider of unregulated holiday let mortgages, this is due to the fact that such mortgages aren’t currently regulated by the FCA.
As a helpful reminder, your home may be repossessed if you do not keep up repayments on a mortgage, so again anything you decide to do in this particular area this is one on which you should take your own professional advice on too, as we aren’t providing and can’t provide you with this.