Whether you already own a second home, or you’re looking to cash in on the rise of the staycation, putting together plans for a holiday let business needs a lot of thought. Building a staycation business doesn’t mean you need lots of land or a huge house to accommodate people.
Here, the team from Ryan’s hospitality division look at different holiday homes you could invest in to get started with your own holiday rental property journey.
Building in your holiday let plans
Whether you’re buying or building to let, before you start you’ll need to assess the financial aspects. This will help you work out how much you have to kick-start your new business.
If you already have a property, there will probably be some work needed to meet regulatory requirements, as well as decorating and furnishing, before you can let it out? Make sure to be realistic about the costs of these changes, and build them in to your plan. This will be the same if you’re buying a property and, if you’re building a property, you’ll need to build in costs for regulatory requirements, such as fire systems, too.
You’ll also need to factor in bills for facilities such as water, electricity and gas, as well as cleaning and changeovers, maintenance, repairs, management, insurance and any mortgage repayments.
Once you've calculated your costs, deduct them from your projected revenue to help you calculate likely profits in the short and long terms.
Location is also key, not only in terms of making sure your holiday let is in a suitable and desirable place for guests, but also to enable you to manage it efficiently and effectively. Here, you will need to consider who your target audience is likely to be, too, and this will feed into all of your plans – from choosing the type of holiday let you’re investing in, to decorating and kitting it out and, indeed marketing it.
A home from home
Buying a second home to let as holiday accommodation has always been a common go to for those starting a holiday let business and certainly a more traditional form of accommodation, such as a house or cottage, is more likely to provide you with short term rental income all year around.
There are considerations to build in to this model, though, including the cost of additional stamp duty (it will likely be higher than on your main home), other tax rules (which may be of benefit, such as capital gains tax relief for furnished holiday lets), legislative responsibilities and insurance requirements.
Setting up in glamping
Whether you have a field at your disposal or a corner of your garden spare, going into glamping is a relatively quick way to set up a staycation business.
Shepherd’s Huts – with very little spare space at your main residence, you could add a haven in the form of a shepherd’s hut. Very similar in size to a small caravan, and providing living, sleeping and cooking space all in one room, a shepherd’s hut is a great space for a retreat for one or two people.
Do bear in mind, though, that you will also need to provide toilet and bathroom facilities for your guests and, as with any glamping site, preparing your site to make it appeal to your targeted guests is essential to getting bookings.
Yurts – similar in the space required to a shepherd’s hut or bell tent, a yurt is a lightweight round structure in which the roof is held up under a combination of tension and compression, with no centre supports needed. Depending on size, these ancient Asian shelters can be partitioned to include space for a bathroom, so are more adaptable than some other types of temporary accommodation.
Bell tents – when it comes to glamping, bell tents are perhaps the most recognisable accommodation offered. With a central pole holding up the structure, these are less versatile than a yurt but offer similar space and style for a boutique camping experience.
You may consider adding a ‘bed and breakfast’ approach to your glamping business, and there are many other ways of differentiating the guest experience you offer – from the surroundings you develop, to the additional services – such as a yoga or wellness retreat – you can provide.
Insuring your staycation property
You’ll need additional insurance to cover you for the risks associated with your business, including public liability and, if you’re setting up your glamping business at home, a shepherd’s hut, yurt or bell tent is unlikely to be covered by your home insurance as it is not classed as a traditional outbuilding. Always speak with your insurance broker to find out about the cover you may need.
To find out more about insurance for your staycation business, please contact Ryan’s Hospitality Division today on 01473 343330.