Do you know how much it costs to keep your holiday home empty?
No matter where your holiday property is located, you will experience times of the week or year when demand is much lower. If you have a seaside property this will most likely be during winter months, if you have a large property, you may find filling weekends easy but find mid week rentals much harder to get.
Whenever your quieter times are, reducing your rates is a very good way to increase your business, by doing this you may be reaching out to a new market that wouldn’t otherwise be able to afford your accommodation. Families on a tighter budget will often chose a Monday to Friday stay in somewhere they really want to go verses a week stay in a cheaper property that maybe doesn’t tick all their boxes. A more favorable weekend rate and a bottle of bubbly for winter months in a cosy little cottage just might entice couples for a winter weekend away.
I have often receive comments from owners that a particular rate, whether winter or mid week isn’t worth offering as they won’t make as much money. This is true, however, if you have a large holiday home and you charge for example £3500.00 for a 2 night weekend but only charge £2800.00 for a 4 night mid week break you will still be covering your costs of running the house if it was empty. Your profit margin won’t be as great but as long as it doesn’t cost you to offer the accommodation you are still at an advantage.
To work out the cost of your house sitting empty, calculate the daily rate for all your expenses, insurance, council tax, utility bills, gardening costs, maintenance costs then add on your turnaround cost (cleaning, linen, toiletries, guest welcome pack etc) and anything you make above this figure is a profit, even if it is a small one.
Very few businesses have the same profit margin for each product or service they sell and renting a holiday home is no different. One of the biggest problems my homeowners are faced with is the cost / availability of cleaning teams. If you cannot offer a cleaner or cleaning company regular business then you cannot always guarantee they will be available in the peak season when you do need them. If you can generate a steadier stream of rentals throughout the whole year then you are more likely to be able to retain good staff who are vital to the success of your holiday home. So, your mid week rental or reduced weekend rate may not net the same profit margin but it will cover your daily expenses and keep your cleaning staff in work throughout the year.