An ebook by the Luxury BnB Team for those who want to set up their own hospitality business.
By Abbey Warne and Dominic Johnson
If you are looking to set up your own rental property but are not sure how to get started then look no further, because we have got you covered with our brand new ebook, which will provide you with everything you need to know to get started!
This chapter (1a) will introduce you to the different types of holiday rental properties, outcomes and objectives that you may need to consider, how to choose the right location, the different types and sizes of properties available, the skills required and any legal implications which may arise.
Types of Hospitality Properties
There are a variety of different rental properties on the market that may spark your interest, and this section will give an outline of what each property offers in terms of services, facilities, sizes and rooms. This will help you to decide which one suits you and your guests the most.
The different types of properties available:
BED AND BREAKFAST (B&B)
- A relatively small lodging establishment offering overnight accommodation and breakfast.
- It is often a private home which typically has between 4 and 11 rooms, with 6 being the average.
- Guests will pay for the room and breakfast the following morning.
- An establishment providing accommodation, meals and other services for travellers and guests.
- They vary in size, but are larger than B&Bs.
- Can often have conference/meeting rooms for hire, restaurants and entertainment services.
- A private house offering accommodation to paying guests.
- The owner usually lives in a completely separate area within the property.
- It can be an ‘annex’ or another, smaller house on the grounds of the owner’s private home.
- A pub that also offers accommodation.
- Provides food, drink, and accommodation.
- Usually has a pub and restaurant, licensed bar.
- Private renting.
- The owners live off-site.
- Have the whole property to yourself.
Do you have a location in mind and how flexible are you with this?
It can be quite tricky when deciding on a particular location and how flexible you want to be with this, so this section outlines a few brief points to consider, in order to help you pick out that perfect spot which your guests will no doubt love.
- You might have a particular area in mind or a vague county.
- You might need to tweak the location or pick a property that is more marketable.
- Have a look around and check there is a rental market to see what works and what doesn’t.
Locations may include:
- A rural destination such as somewhere in the countryside
- By the seaside, near a beach and other attractions
- A particular tourist hotspot or people travelling on business – you can charge more if you are closer rather than further away.
Visit: Themes Hermes
What are your desires, outcomes and objectives?
This section will provide you with an insight into the
different desires / outcomes and objectives you should consider when it comes to rental properties in a Q&A format, and will introduce you to the difference between Holiday Rentals and Single Longer Term Lets.
Holiday rental vs single tenant?
“A friend of mine wants to get into holiday rental in Devon – 3 hours drive from her home. Due to her current commitments she has purchased a property and has started a long term rental. The aim is to move to holiday rental in a few years when she has more time.”
You would have put your heart and soul into this property and how do you feel about letting strangers into your house / bed week on week?
“One of the downsides of holiday rental I’m afraid is that people do mess up your house.”
- Consider how available to guests you want it to be
Holiday Rentals vs. Single Longer Term Lets
- You do get to use the house when not rented out
- Higher yields but generally irregular
- Less control over who the guests are and how they behave.
- Must be fully furnished and equipped
- Management of the property is generally more
- Some tax incentives – you can claim tax relief against any loans (repayment part only).
- Can be shut down due to a pandemic!
- Higher start up costs and possible ramp to get to revenue
SINGLE LONGER TERM LETS
- No access to the house, it’s someone’s home
- Single regular payment.
- More control: credit checks, interview and references
- Can rent out unfurnished
- Less work to manage the property
- You are generally more connected to a tenant and their problems.
- Since lead times are longer, you can generally market whilst renovating and so will start receiving revenue at an earlier stage.
What type/size of property are you looking for?
Thinking about the type and size of property is an important part of the process when you are looking to run your own, so this section will outline the different kinds of properties and their key features.
The different types of rental properties available (information from Roofstock and Mashvisor):
- These homes are aimed at more high-end renters.
- Include new, up-to-date appliances and technologies.
- Expensive to invest in.
- They tend to have less frequent guests due to higher prices.
- In locations which attract frequent visitors such as the seaside or countryside.
- Can be seasonal.
- Can be seen on websites such as Airbnb.
CONDOMINIUMS AND COOPERATIVES
- Run by a ‘Home Owners Association.’
- Privately owned.
- Part of larger complex – apartments, villas etc.
- Consider HOA fees you will have to pay.
Legal Implications (Parking Permits, Extensions, Building work) (Legal Expert)
There are legal implications to consider when you want to run your own rental property, so you can make sure that you don’t run into any troubles down the line.
- There are less likely to be issues if there are other holiday let properties nearby.
- Very local so a good source of this information is the local holiday let agencies.
Front End and Back End Skills
There are various skills required when running your own rental property, but fear not, because this section will cover the different skills you need and how you can achieve them in a few simple ways. These include ‘front-end’ and ‘back-end’ skills which will be covered in this section.
Don’t forget that running a holiday let is like running any other type of business!
The steps you should take to meet the skills required:
- You need to know you can cover all the bases.
- Take a look at your team and match up the skills you have with what you’ll need.
- Then make a list of what you have now, would be willing to learn and what you’ll need to buy in.
Examples of front-end and back-end skills:
- Website Design
- Social Media
- Interior Design
- Garden Design
- Meet and Greet
Summary of Chapter 1A
This brings chapter 1a of our e-book to a close, and we hope this has given you a better idea of the type of property you are looking for, the location, the skills that owning it may require, as well as any legal implications involved.
Make sure that you keep a look out for the next part of the ebook (chapter 1b) which will introduce you to more complicated stuff, but don’t worry, we will guide you through it step-by-step.
The sections in chapter 1b include insurance advice, tax implications and more, so make sure you keep your eyes peeled for our next issue, because you don’t want to miss out.
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