Letting your overseas property
If you’re fortunate enough to own an property overseas you’ve probably considered the possibility of letting it out to holidaymakers when you’re not using it.
Letting out your property is a fantastic way to maximise your new home and to make it pay its own way. However, most countries require some kind of license, along with various taxes and fees before they allow homeowners to let their property out.
It can be a daunting process to begin with but also very rewarding and potentially profitable. To help you get started we’ve listed some of the most important things you should consider at each stage of the process.
Should I let my property?
You may have to spend money before you make any
Letting your property is likely to mean you will have to spend some money and time to get everything set up. It’s all about balancing outlay with potential income but generally speaking your costs are unlikely to be huge.
Some of the main costs to consider are:
- Registration for any online rental portals you would like to use – some work on a commission basis others require a flat fee. Shop around to get the best deals but remember to read reviews before signing up.
- Consider how you will manage the property i.e. who will clean it and prepare it for your guests? More often than not this will mean employing a management company but your agent may be able to help you arrange this.
- Any licence fees that you have to pay in order to legally let your property. These will vary from country to country (sometimes even region to region) so it is always best to seek professional advice.
- Insurance, maintenance, welcome pack for guests and any advertising costs may also need to be considered.
How often will you use it?
If you or your friends and family plan to use the property for a large part of the year consider whether letting it out is worth the finance and time.
Remember the peak seasons for most holiday rentals will be during the May to September period (although this may change depending where you property is located). If this is when you plan to use the property yourself, you may not recoup much profit by letting it out during the less popular times of the year.
Getting set up
Each country and often each region/city will have its own bureaucracy that you’ll need to navigate before you are legally able to let your property.
It is always advisable to speak to either an independent legal professional or local property expert to make sure you have all of the necessary paperwork completed and signed off by the relevant authority.
Legal and tax consultation
Expert, independent advice is incredibly valuable in any complicated administrative process and we would recommend seeking it out when deciding to let your holiday home.
They will be able to guide you through the entire process making it a much less stressful experience for you. You may hear some horror stories from other home owners who have had legal problems with letting their overseas property but this is almost always because they did not seek out impartial advice from legal professionals.
Something often initially overlooked by rental homeowners is the practicality of maintaining the property and preparing it for its next guests. Unless you are fortunate enough to live nearby you are likely to need to hire a property management company or a similar service.
A management company will ensure that everything is clean and tidy for your guests. They can also help to quickly resolve any issues that arise e.g. calling a plumber to fix a burst pipe, changing a bulb, replacing broken crockery etc.
There are numerous companies offering these services online so search for companies who operate in your area. Remember to compare all prices and reviews with competitors to make sure you are getting a good service for the right price.
Furniture and facilities
How you decorate and furnish your property could be an important factor in securing bookings. There are no hard and fast rules when it comes to décor as it is largely subjective. However, it is advisable to keep things fairly simple and modern to appeal to a wide market. Any furniture you buy needs to be good quality and durable, additional towels, sheets and bedding should be available and there should be plenty of essentials included such as full kitchen equipment, hairdryers and a safe.
Rentals also tend to have various entertainment amenities too, such as Wi-Fi, games, books, Sky TV, DVDs and music.
You’re likely to increase the chance of repeat bookings if the essentials and amenities are of a good standard.
Many countries make it a legal requirement for those letting their property so it’s something that you have to consider.
Standard home insurance is usually not enough to cover a rental property (although it may be worth checking your currency policy) so look around to see where the best deals are. It doesn’t just protect your possessions and property but also provides security in case a guest has an accident.
To give yourself a bit of protection from breakages or a late cancellation, it is wise to insist on the payment of a deposit in order to secure a booking.
It is also a preferable for your guests as they have the security that the property is held for them.
There will be times when your property is empty, especially off-season. Therefore, it is important to take security precautions as you would with your own home in the UK.
You could install a burglar alarm, ensure there are proper locks on all doors and windows and fit a small safe. You could also arrange for your management company or neighbours to check in on the property occasionally as well.
Standing out from the crowd
The vast majority of people looking to book holiday accommodation will browse online so it is important that you make yourself visible.
When adding your property to an online holiday portal make sure the description of the property is clear and concise and include information on the local amenities, distances to transport links and local attractions. It is also very important to include lots of high quality images of the property that shows it in an honest way and in a good light. Good quality photos go a long way in convincing someone to book.
If you are particularly digitally savvy you could design and build a simple website to advertise your property and handle bookings directly as well. Although remember that if your website doesn’t look very professional people probably aren’t as likely to book your property.
A nice way to make your guests feel at home and to gather good reviews is to prepare a welcome pack for your guests.
It’s only a simple gesture but will always be received well. This can be arranged by your management company and left out for your guests.
Here are a few ideas of things to include:
- Short welcome letter wishing your guests an enjoyable stay
- Bottle of wine
- Any local produce such as cheese, meats, fruit etc. (perhaps the area is famous for it?)
- Leaflets of nearby attractions and activities
- List of useful phone numbers e.g. yours/management company, taxi company etc.
When your guests come to leave you should ensure there is a way for them to leave you feedback directly. This could be in the form of a guestbook or websites where you advertise your property. Their suggestions and comments will help you to offer a better stay for future guests as well as useful endorsements which can be displayed on your website or adverts.
If your property is listed on review websites do your best to respond to any comments left by guest, both positive and negative.