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Let Your Holiday Home Pay Its Way - Holiday Home Business - European Holiday Home Rental |
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Holiday rentals can
help cover running costs on your holiday home and potentially bring in a
profit too. Jacquie Clavey reports. France is back in
vogue, according to travel industry gurus.
No longer losing ground in tourism stakes to long-haul
destinations, since September 11th last year it has become the
destination of choice for holidaymakers across Europe.
Which is good news for anybody with a French holiday home to rent
out. But, before you start
counting your euros, there are other forces in operation too.
The French holiday property market is very crowded and, with some
60,000 British people buying properties in France last year, many of whom
will let out, it is destined to become more so. Most experts would not
recommend buying a holiday home purely as a financial investment if you
need to rely on holiday bookings to cover your mortgage and other costs
– in the 1990’s many buyers lost their holiday homes after defaulting
on mortgage payments when rental income was not what they hoped.
If, however you are buying cash, holiday lettings are now beginning
to stack up favourably against alternatives such as putting your money in
the bank, and there’s the added benefit that you have a holiday home you
can use yourself too. How much can I
make? The rent you can
charge for your property will depend on where it is, how big it is and how
luxurious, or not, it is. While
you can’t change the location of your property, you can make additions
that will enhance its rental value. The one factor that
can make the biggest difference to both the number of bookings you get and
the weekly rent you can charge is the presence of a swimming pool. – in
some cases, particularly in the south, installing a pool can double your
weekly income. “Houses with pools
always go first, so we recommend owners have a pool in a good state of
repair” says Simone Clarke of self-catering specialists Crystal
Holidays. Single family homes
generally need a private pool, although apartments and townhouses can get
away with a shared pool. If
you are on the beach, a lake or a river, however, you can probably still
get a good rent without a pool. When setting the price for your property look at brochures are being charged at in the area. Try phoning self-catering companies and asking what you would have to pay for a property like yours. The main season for
holiday bookings in most areas of France runs for around 10 weeks, from
the end of June to the beginning of September, although further south it
may stretch to 16 weeks. Generally rent will be set according to the season: high
season includes July, August and possibly early September, mid-season,
where the rents generally drop by 25%, comprises June, September, October
and sometimes Easter, while the rest of the year is the low season. While you can often
let the summer high season several times over, the low and mid-season
periods can be more of a struggle. For
some people this is not a problem, as this is when they will make use of
their property for their own holidays.
However if you want your property let for as long as possible, one
option is to put your property up for longer lets. There are a number of different routes for finding tenants for your property. The main decision you need to make is whether you want to handle your bookings directly or whether you would prefer an agent to deal with them for you. Let the agent take the strain
If you don’t have
much spare time you’re better off using an agent who will take care of
all the bookings and save you the time and expense of advertising and
finding clients. They have
various charging structures but often some of the cost can be recouped
through the higher rents they achieve. If you let through a
holiday rental company such as Brittany Ferries’ Holiday Homes, Allez
France or Bowhills you can expect your property to be inspected to ensure
it meets a list of criteria. Crystal
Holidays, for example, check properties to ensure they are safe, family
friendly and well presented. “
We wouldn’t take on a house with an internal gas water heater and we’d
expect properties to have fire-blankets an smoke alarms,” says product
manager Simone Clarke. “We’d also recommend things such as a swimming pool,
bedding that matches and a minimum of one bathroom for every three
bedrooms.” By selective when
choosing your agent as things can go wrong.
Agents have gone bust in the past owing property owners thousands
of pounds, while others are perhaps too small to be able to finance the
level of marketing and coverage needed to provide you with a good
season’s bookings. Check where the
company advertises, how many brochures it distributes and where to.
The larger companies advertise in national newspapers and
magazines, distribute their brochures through travel agents and also have
agents overseas. On the financial side find out when you will be paid and
whether they hold client’s money in an escrow account. The level of property
management offered varies from companies to company.
Some will organise a full management service, to include
maintenance, lawn cutting, pool cleaning, key holding and meeting and
greeting client. Others
simply handle the bookings and reservations side, expecting you to put a
caretaker in place to handle the other aspects.
The level of service provided often reflects the rental value of
the property – companies dealing with luxury villas will, on the whole,
provide a more complete management service than those specialising in
cheaper properties. Many of the top
self-catering holiday companies are extremely selective about which
properties to take on. Some
are only interested in villas with pools, others have strict criteria
about furnishings and location. Be
realistic about your property and talk to companies which cater for the
end of the market your property is most likely to appeal to. Although some companies will allow you to reserve weeks for your own personal use, many put restrictions on the high season, so if your main reason for buying the property in the first place was to use it yourself, make sure you will still be able to when you want. Do-It-Yourself Lettings
If flexibility is
important to you and you have plenty of time to spare then doing your own
lettings can have advantages. You
may, for example, want to block out weeks in the high season for your own
use, or you may hate the thought of handling your much-loved property over
to an agent, not knowing who is in it at any particular time. A lot of people take
the decision to let only to friends, family and colleagues, while others
will let to strangers but prefer to take the booking themselves so they
have at least some idea who is using their property. Many clients actually
prefer to book directly with the owner as it give them more flexibility,
they get a better idea of where they will be staying and, because there
are no middle men, they generally pay less.
Depending on how hard you work at getting the business, you
probably have a better chance of being fully booked for longer by doing it
yourself. You also have a
greater likelihood of repeat bookings. The downside of taking
bookings directly is that by the thirtieth request for the same week
in August that you’ve already had booked for months you may feel
like throwing the phone out the window.
When an agent is dealing with your bookings they can at least refer
people to other properties when the week the enquiries wants is already
taken (and, vice versa, they will refer people to yours). Owners who deal with
their own bookings tend to use a mix of marketing methods.
An effective way to gain the economies of scale that large
organisations can offer is to use an organisation such as Bonnes Vacances,
Private Villas or Chez Nous. These
companies produce directories of self-catering properties which property
owners pay to go into. The
owner’s contact details are included in the ad and all bookings are
taken directly. These companies
advertise regularly in the national press and distribute large quantities
of their brochures giving your property wide exposure.
Bonnes Vacances, for example, use a brochure distribution service
through which its magazine will find shelf space in places such as
libraries and hospitals while Chez Nous uses WH Smith and supermarkets. The cost of
advertising with these companies depends of the size of entry you take.
An eighth of a page, the most popular size, currently costs £395+
VAT with Chez Nous, £280+ VAT with Bonnes Vacanes and £370+ VAT with
(2003 price) with owners in France. There
tend to be second year reductions as well as discounts for referring
people who book with you to the organisation’s travel service. The internet is
increasingly becoming the first place people look for holidays and most
organisations now have websites enabling people to book online.
It’s worth remembering that, although many companies have
September deadlines for going into her brochures, they will generally take
entries to their website throughout the year. There are also an
increasing number of internet-based organisations who only advertise on
the web. Cheaper than similar
organisations which produce brochures the well-established ones are
proving attractive to property owners looking for direct bookings.
For example euro-rentavilla.com
provide a full web page listing and marketing for £95.00 per property. Setting up your own
website can be invaluable for gaining access to worldwide clientele.
It can also save a lot in brochure production and postage as you
can simply refer people to your website.
If you’re a techno-whizz it is of course possible to design your
own site but, as with most things, paying an expert to do it will avoid a
lot of the pitfalls and make sure your site looks professional. Placing ads in papers
and magazines is another effective way of bringing in potential customers,
but remember the effect of your ad will last only as long as the
shelf-life of the publication. Specialist
magazines such as those on travel to France can be a good bet but also
consider whether your property could appeal to somebody with a particular
hobby. Readers of art
magazines are often attracted to the light and colours of Provence, while
wine buffs might want a property within striking distance of Bordeaux.
The lady also carries ads for overseas lettings. If you have a
particularly desirable property you could try an entry into a guide-book
such as Alastair Sawday’s Special Places to Stay.
All properties are inspected – or rather the owners are ‘met’
as the publishers prefer to say – and standards are high.
Local marketing such as putting your property details on company
notice boards, in newsletters or in supermarkets and shop windows can
bring enquiries. French tourist offices in holiday areas often maintain a
register of houses and flats available for rent. It pays to link up with other people letting property in the same area of France and pay any surplus bookings between you. Once you are beyond your first year, remember to mailshot your previous clients as many people return to the same property year after year. Running a Gite Business
If you plan to live in
France then it makes sense to have a number of units which can share
facilities such as a swimming pool and washing machine, so spreading the
cost of installing and maintaining them. Grants are available
to set up gites and other holiday accommodation in certain areas such as
those from the Federation Nationale de Gites de France.
However, such grants are conditional on the quality of the
accommodation provided (properties are assessed annually) and on the
property being available to rent by Gites de France for a period of 10
years. If you sell within
this period or the property isn’t made available you must repay the
grant. A further point to
consider is that French families expect to payless for a gite than a
British family, so you may not find it beneficial to let through Gites de
France at all. “Most
British gite owners tend to market directly to the British,” says
Margarete Isherwood of Jacwood Estates who runs courses on how to run a
gite complex. Before buying a property to convert to gites contact your mairie about local regulations and make sure that permission will be granted before you buy. Advertise on the Internet to a highly targeted audience looking for holiday homes like yours - Click into jmlvillas.com for more information Article from French Property News
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