Earning money from your second home

Many second home owners who have purchased as an investment opportunity or holiday home will have experienced recent problems earning money from their second home. Despite lost income and struggling to cover costs, most have been holding firm, unwilling to sell until the housing market recovers. As an additional home, you will also need second home insurance to cover the increased risk on your property from either from leasing to tenants or whilst the property is vacant.

With rental income becoming a priority to finance a second home many have turned to holiday letting as a lucrative option, whilst still being able to stay in the property when they want to throughout the year.

The holiday letting market has become much more flexible with minimum stays now being possible at one or two nights, completely opening up opportunities and tackling seasonality issues on the head.

With many people cutting costs and looking to take short breaks and preferring the option of home comforts as opposed to hotels, as well as the rise of letting aggregator sites such as airbnb, the earning potential can be substantial if you get it right.

Some second home owners are lucky enough to be able to charge rental rates that far exceed their mortgages, this is especially the case for those located in popular tourist areas.

Understand your customer

In order to maximise your earning potential from your second home you should firstly consider the type of property and whom it will attract. A city flat or modern townhouse close to the city centre may attract a group of young males or females out to celebrate a birthday or hen or stag weekend for larger properties, or for smaller homes focussing on workers and young couples visiting to take in a show and sample the city delights would be more appropriate. Somewhere closer to the beach or a theme park will attract families, whilst a countryside cottage may be perfect for an older couple vacating with their dog to a quiet retreat. You need to understand your market and sell to their needs. If a particular market is not working for you then consider moving towards attracting a more popular market to your second home and think about any adaptations you may need to make for this to work.

Be flexible

Most property owners will lose out on potential income due to the inflexible nature of your property letting. Some guests will want to know children or pets are welcome, some will want more flexible check in and out options and in addition to this many will simply require the ability to book shorter stays. Particularly in off-peak periods offering shorter durations can ensure that your second home does not sit empty. Likewise in off-peak periods it can be sensible to offer special rates for a whole month rental to encourage a longer duration and help provide income on a regular basis. Be careful not to discount too early though as many owners will be noticing the trend of late bookers who are tending to book much closer to the date of travel.

Peak season

During the twelve weeks of peak season between mid-June and September, you should be able to charge a premium rate for your second home. This can also be true for half term weeks, popular holiday dates and if your property is closely located to a popular event or stadium that attracts many visitors. As these weeks will be in more demand you should find it easier to calculate covering the cost of flat periods by maximising the potential of peak season.

Sell your property

Gathering good testimonials from your guests will be one of the best forms of advertising. Credibility is important especially when visitors are looking for standards of a luxury or boutique hotel along with a pleasant home-from-home experience. When it comes to property lettings photos are essential. Good quality images and different views of each room and features both internally and externally will help to sell your second home and allow potential customers to visualise the property and its suitability. Accessibility to transport links and local tourist attractions are extremely important and should be advertised, they can often prove to be a trade-off point versus an additional luxury furnishing.

Avoid additional costs and ensure you are covered

Stylish furnishings are important to attract potential tenants, but it is also important to avoid potential damage and regular replacement costs so hardwearing and easy to clean carpets and furnishings should also be a consideration.

Despite your best efforts to keep your property filled with tenants there will likely always be some periods where your second home is left unoccupied. Standard home insurance will therefore not cover you relative to the increased risk of being left unoccupied, such and theft or water damage. As a specialist insurance provider, Bluedrop provide unoccupied home insurance to cover a variety of flexible needs and periods of cover. Don’t be caught out with inadequate insurance. Our comprehensive insurance packages will give you peace of mind, knowing that you are covered for any event, accident, or damage to your second home.