With travel restrictions still in place and double vaccinations required to go abroad, staycations have proved popular for another year in the UK. Hotel bookings were up 307% year-on-year in February 2021, according to Profitroom, a hotel marketing company. As a company, GRE Assets has experienced increased interest in our holiday lets at Brighton Marina, with many holidaymakers choosing the popular south coast city for their 2021 staycation.
This ‘staycation boom’ has caused many property investors to consider holiday lets as their next venture, but there are several factors to consider before expanding into this new market, which we have outlined below.
Making the right investment
We have said it before and will no doubt say it again, but the location can make or break a property investment and it is no different for holiday lets. Coastal locations, as well as properties close to the countryside prove consistently popular.
Furthermore, understanding who you are targeting is also important as often medium sized properties have a wider market, as they are not limited in having too few or too many rooms. There are also several other features which are high on the agenda for those looking to rent a holiday let, including free WiFi, a fully furnished kitchen and proximity to local shops.
Holiday lets are a lucrative market
As we’ve already established, demand for holiday let properties is strong and investors have the potential to generate more profit. The reason for this being that a weekly rate for a short-term holiday let is much higher than a traditional buy to let property. In fact, research by Which? has predicted that national yields for holiday properties could reach 14% by 2022.
However, it is important to consider that most holiday lets are affected by seasonal dips in demand and if the property is left empty in less popular times, such as during term time or in the colder months, revenue will be impacted.
Asset management and wear and tear
Short term lets can be good for revenue, but it is necessary to consider the additional requirements involved. For instance, managing a holiday let is more involved than a long-term rental property as it involves increased cleaning and changeovers. There is also likely to be more wear and tear at the property with more people coming and going. That said, higher yields and using a property management company can help offset the challenges posed here.
GRE Assets has been delivering high quality, well connected homes in the UK and Spain since 2006.Date: 10 August 2021