MoneyMagpie

Oct 12

Make money renting out your place to tourists

Fancy a few weeks holiday? Then why not get paid for it by renting out your house while you’re away!

Although you have probably heard of Airbnb, there are now loads of sites on the internet which will help you turn your house into a holiday destination.

Some are better than others so here’s all you need to know if you’re thinking about letting.

 

 

How does it work?

Renting out your property for a short period of time is becoming increasingly popular as more and more people have begun to realise it’s a sure fire easy way to make money.

Websites such as HolidayLettings have made it more convenient than ever by launching free listing services and spelling out all of the practical steps you need to take to make your home attractive.

From choosing how you want to accept guests, to whether you would like to charge a security deposit and/or a cleaning fee, these sites not only give you the opportunity to make more money but also peace of mind while you’re doing it.

Lettings sites are also super handy in that you only have to list your home once as you can specify dates on which the property is available.

Although these websites let you set your own prices, the way they make their money is by taking a percentage cut of the bookings that you receive, plus VAT.

Some of these companies will also insure you against damage but this varies from website to website.

To help you out, we’ve done a bit of research into how the different sites compare – check our top 3 out below!

Make money renting out your place to tourists

 

Which are the best sites to use?

Here’s a list of our top 3 holiday rental websites and how they compare with each other:

Airbnb

Airbnb makes it really easy and simple to rent out your house for a short period of time.

With Airbnb, you’re in full control of your availability, prices, house rules, and how you interact with guests. You can set check-in times and handle the process however you like.

Airbnb offer free listing on their site and leave it up to you how much you want to charge them.

Their messaging service also makes communicating with guests stress free, giving you the option of meeting them in person or just giving them your door details.

Guests must pay before they arrive and you are paid automatically when they check in.

Airbnb charge a 3% service fee which means if you were to let a property for £700 a week, its cut would be £25.20 and that means you’re almost guaranteed to make a hefty profit!

But the site also charges guests an extra 6 – 12% on top of your asking price which can make your price less attractive.

Airbnb offers a Host Guarantee of up to £600,000 of coverage in case property damage occurs, and their Host Protection Insurance provides liability coverage for up to £600,000 for every listing.

The site even provides up 24/7 host support, making it possible to relax on your own holiday and not worry about your home.

Sign up to Airbnb here.

 

HolidayLettings

HolidayLettings are very similar to Airbnb in the sense that they also offer free listings, meaning that you can advertise your lovely home on their site for no upfront cost.

They also take 3% of your bookings, including VAT, and will list any kind of property ranging from castles to camper vans.

HolidayLettings are a super useful site as they also have links to TripAdvisor.com which means it’s really easy for potential guests to find your place.

As HolidayLettings put it, this partnership means that “our owners can now show off their guest reviews and get their properties promoted on a worldwide network of 25 TripAdvisor websites surfed by 340 million travelers every month!”

 

booking.com

Booking.com is another great site you should consider when thinking about renting our your home.

The website has a handy feature which tells you how in demand properties are in your area and how quickly, based on your area, your property is likely to be snatched up!

In Cambridge, for example, Booking.com tells me that my location receives around 2.5 times more bookings than the average and that they receive their first booking roughly 2 times faster than the average.

Booking.com takes 15% commission on the price that your guests will pay (which you set yourself!), meaning that if your guests were paying £700 for a week, you would be left with £595.00 in earnings.

Although this sounds like a lot more than the amount that Airbnb and HolidayLettings take, Booking.com say they provide 24/7 phone-in property support and have a daily local support team that Holiday Lettings and Airbnb don’t have.

They also argue that their retention of guests is a lot better than other sites because they don’t charge service fees for guests making a reservation as HomeAway and Airbnb do, and they provide free and active marketing on Google, Bing and Yahoo unique to them.

Another great thing about Booking.com is that property owners can request damage deposits from guests.

Deposits can help cover any potential damage that a guest might cause, providing assurance that your property will be treated respectfully. If anything does go wrong, it can be reported to their team through their misconduct reporting feature.

How much can I expect to make?

 

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Although most sites give you the chance to set your own prices, it’s helpful to have an understanding of the competition before you do so you’re not overly ambitious or underselling yourself.

While spare rooms usually go for around £30 – £40 a night in Cambridge, for example, entire flats can be priced around £60 – £90. If you’re thinking of letting out your whole 3 bedroom house for a few nights while you’re away, prices start around £70 a night and can range up to and beyond £200.

Once you’re guest is confirmed, their payment will be transferred to the bank account details that you provided when you first made an account with the site.

Most sites offer free cancellations but you can often make your requirements stricter even though this might also have the side effect of turning off potential guests.

Nevertheless, the beauty of the scheme is that the more you let your house out when you go away on holiday, the more you will be able to afford to go away and the more you’ll be able to make from it!

 

Things to think about

 

The practicalities of renting out

  • Check whether you need permission to rent out your property!

Some banks, such as The Halifax and all of Lloyds Banking Group’s mortgage brands, are quite strict about short term renting and say that “one of the conditions of us providing our consent is that all lettings are carried out through an assured shorthold tenancy agreement”.

Other are more flexible such as Santander, whose spokesperson told The Guardian that “if someone is letting out their home while they are away on two weeks’ holiday, we would want the borrower to ask us for consent, but this would not be unreasonably withheld.”

  • Get your local council on board

There is such a thing as sadly having too much fun and sometimes some local councils can be strict about tourists renting out homes. This is because of the potential for noise and disruption.

While the government lifted laws restricting renting in London boroughs in 2014, it’s always better to check that your council is okay with your plans just in case.

  • Make sure you’re insured

Most agencies will provide their own levels of insurance (see above!) to compliment the insurance package you already have set up for your home.

While your normal cover shouldn’t change, it’s important to bear in mind that some companies might put extra restrictions on aspects like theft cover because of the increased risk.

Some might also charge you an additional premium for covering your house when you’re letting it out.

If this is the case, it’s worth comparing house insurance companies and seeing if anywhere will give you a better deal – it could make a big difference to how much profit you eventually make!

But regardless of your insurance plan, make sure you keep your valuables safe and lock your jewelry away in a secure space.

It’s also worth taking photos of every detail of your house so that if things look very different when you get back from your holiday, you have the evidence to prove

  • Talk to your neighbors!

Give them your number so that they can get in touch with you if something looks fishy.

 

Attracting guests

  • Make it look like home!

Your house doesn’t have to meet any special standards for you to be able to rent it out but obviously the nicer it looks, the more interest you’ll get so make sure it looks good in your photos.

  • Tap into local tourist attractions

Make the most of your location by pointing out some local events and attractions for potential guests and even plan your holidays so that they coincide with highlights like festivals that you know will draw a big crowd!

  • Encourage your guests to give you good reviews!

Reviews are one of the best ways for potential guests to get a feeling of the place they want to rent so the better your reviews, the more likely your house will get booked up fast.

Do you rent out your home to tourists? Let us know your experience in the comments section below!

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