Financial Planning for The Future
It is a good idea to set up a long-term budget at the beginning. I have witnessed owners in the past who have sailed along each year achieving good bookings and then all of a sudden they wonder why after 10 years they aren’t getting the same requests they used to and I have to then tell them it is because their property now looks tired, out of date and in need of refurbishment. They then have to undertake refurbishments piecemeal because they didn’t save enough from past rentals.
When planning you budget you need to take into consideration the age and size of your property and the current state of your fixtures and fittings.
If your property has just been completely refurbished then your timeframe before you need to consider another refurbishment will be much longer, costs for the first few years will hopefully be basic repairs, some re-decoration and replacement of small items.
If the property you are renting or considering renting hasn’t had any work done for some time you will need to put more money aside from the beginning. Equipment such as electricals, boilers etc. will be older and therefore you might find yourself needing to replace several, possibly costly items within a short period of time if they begin to break down.
You may be faced with a situation that you need something replacing urgently because you have imminent bookings and therefore you won’t have the time or flexibility to shop around for the best price or tradesman. If your boiler has broken down on Monday and you have guests arriving Friday you may need to pay extra to get the problem fixed.
We recommend you take out extra insurance should a serious problem arise and you are forced to reimburse guests because you cannot accommodate them. You will find details of this in the Legal requirements section.