Now that you have decided to convert your fully-furnished vacation home into a holiday home rental for guests, you will need to identify your goals and objectives of your holiday home rental business. Many owners do not take their holiday home as a business and in the long run find that their running costs far surpass their rental income.
Owners therefore need to understand that once they decide to set up their holiday home as a rental property, they enter a potentially profitable business venture. And like any other business, holiday home rentals too require business acumen.
- Decide how many weeks in a year you would like to use your home and how many weeks you would like to rent it out.
- Decide when you want to break even. When you see that your property is getting a good number of guests you would like to make some profits. Based on a set time-frame, prepare your marketing plan. If you want to break even soon, you will need to have a more aggressive marketing plan.
- Determine how much you want to earn. Do you want the money earned from the rental to cover all the expenses of your property or you want the rental to cover a portion of your costs? Or do you want to make a profit?
- Analyse the profit and loss of your holiday home rental business even before your start. The profits are simply the money earned from the property through bookings, while loss is defined as the running costs of the property, which will include the mortgage cost or loan, taxes, utility expenses (on gas, electricity, water), annual costs (insurance) and monthly costs (maintenance, cleaning and changeover costs).