Although you may know your property like the back of your hand, many things will feel unfamiliar to your...
Read on to find out what the true cost of running a holiday let…
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The initial costs of running a holiday let are usually the most expensive part of the process. Once the main things have been paid for, things tend to settle down into more manageable payments. Below gives you an idea of the initial costs involved.
Whether you’re a cash buyer or plan to take out a mortgage, this is going to be the one of the biggest costs of running a holiday let. Make sure to set yourself a budget on what to spend and stick to that budget when viewing properties. It’s easy to get carried away looking for your ideal holiday home, but you need to keep in mind how much it’s going to cost you. According to Zoopla, The average sold price for a property in Lake District in the last 12 months is £342,975, dated Sept 2023. If you’re looking to take out a mortgage, there are many building societies who cater for holiday let mortgages but we also recommend speaking to Holiday Cottage Mortgages, who specialise in holiday lets.
If you require planning permission to extend, develop or erect additional buildings around your holiday let, this is another cost to consider. There’s not only the cost of the physical renovation work to consider, but also the cost of applying for planning permission. Remember the Lake District is a National Park and also a UNESCO World Heritage Site so any planning application may take a few years to get the go ahead.
Once the sale of your holiday let has been finalised, it’s time to get it looking exactly how you want it! The cost of this can vary depending on how much work your property requires. New carpets, bathroom suites & kitchen units will rack up quite a bill, but if your holiday let just needs a lick of paint then the price will be a lot less, especially if you’re able to do the decorating yourself.
You will also need to consider furniture. It’s better to spend a little more money on high quality furniture that will stand up to wear and tear from guests, rather than going for the cheapest you can find. Cheaper furniture tends to break more often and will need replacing, meaning the overall cost could end up being more.
You might also want to consider putting a few luxuries in to improve your guests stay. Ideas could range from a coffee machine in the kitchen to a hot tub on the patio.
Take a look on our blog for some ideas on how to make your holiday home stand out.
The ongoing costs of running a holiday let range from property insurance through to basic utility bills. Some of these are essential costs of running of a holiday let, but others such as broadband and TV subscriptions, are optional.
The cost of council tax depends on a few things – what area your property is in and which tax band it falls into. You can check your council tax band on Gov.uk then research which local council your property comes under to check the price. To give you an idea South Lakeland council tax bands can range from around £1,400 to £5,000 annually. See our handy tax guide for more information.
Regular home insurance will not provide the required level of cover for a holiday home. Instead, you will need to look at Holiday Let Insurance and Public Liability Insurance (minimum cover of 2 million) – you can read more about insuring a holiday let here. Usually, it can cost as little as £150 annually for a standard buildings and contents policy, but when you include public liability cover for commercial holiday letting, it can rise to over £500+. The price will vary depending on each individual case. As part of the Sykes Cottages family, we work with Pikl Holiday Let Insurance to offer our owners an excellent deal on their insurance. Click here for top tips from Pikl
There’s now a huge range of broadband providers across the country, one to suit every budget. Try looking on comparison sites such as Moneysupermarket.com or Confused.com to find the best deals. These sites allow you to enter your property postcode and see which providers can cover that area, and what offers they currently have on.
On average, broadband can cost between £22-£38 per month, but some will do a cheaper deal for new customers so it’s best to shop around. Although it’s not necessary to provide WiFi in your holiday let, we highly recommend it. Properties that offer WiFi can receive up to 20% more income than properties that don’t, however as some areas of the Lakes are remote there may be no or limited service, something to bear in mind.
To allow guests to watch or record live TV your property will need to be covered by a TV licence. The cost of this is £159.00 which needs to be renewed annually. If you’d like to pay for certain TV subscriptions for your guests to use, these often run on a monthly payment basis. For example, Sky TV bundles can start from £26 a month while Netflix plans range from £4.99 to £15.99 per month.
This includes water, electricity, gas and heating bills. Again, it can often be best to shop around and see which providers can offer the best deal for your property. If you have a log burner or open fire, don’t forget to factor in the cost of providing a fire starter pack for guests. This usually includes some firelighters, matches and a small supply of logs.
Aside from the ongoing costs of insurance and bills, there are also the day-to-day costs of running a holiday let. Some of these include:
After every changeover of guests, your holiday let will need to be thoroughly cleaned and the linen washed. When you come on board with Lakelovers and opt in to our fully managed service, we can organise this for you. Cleaning costs can range from around £75 for a one bedroom property, to £225 or more for larger properties with 5+ bedrooms.
From time to time, your holiday let will require some maintenance. For example, tidying up the garden area, re-painting the walls, or a deep clean of the carpets. There may also be cases where something goes wrong, such as a burst pipe or leaking roof. The cost of this type of maintenance work may seem large at the time (depending on the scale of the problem), but these cases should be few & far between. Lakelovers provide our owners with a ‘pay as you go’ maintenance service which covers emergency call outs, the cost ranges between £25+Vat + £60+Vat depending on geographical area. Click on the above link for more details of our fully managed service costs.
Most guests nowadays like to arrive at their holiday cottage to a small welcome pack of tea, coffee and biscuits. Although it’s not essential, we do highly recommend providing a welcome pack to your guests to enhance their experience. We also can provide a kitchen pack for guests too. If you opt in to our fully managed service we can help with will organise a welcome pack on your behalf. Call our local team on 015394 88855 to find out more about the costs involved.
When you let your holiday home through Lakelovers there will be a few charges to consider. We understand that the overall costs of running a holiday let can be daunting to begin with. For this reason, we like to keep our costs simple to make sure you get great value for money along with excellent service!
Lakelovers offer very competitive commission rates, which can be tailored to suit your personal circumstances. Please contact the local team in Windermere for more in-depth information.
As we are part of the Sykes Cottages family we have a multi-million pound marketing budget so we can promote your property to the highest level, getting it in front of the right people & securing you bookings. We work with over 700 partner websites, as well as featuring all properties on the Lakelovers & Sykes Cottages websites. This level of marketing would cost into the thousands of pounds if it was arranged individually, meaning you get extremely good value for money when you let with us!
If you’d like an extra helping hand with running your holiday let, our fully managed service could be the solution. We can arrange cleaners & maintenance, carry out periodical property inspections, and put together welcome packs for guests.
Are you still looking for some more information about the costs of running a holiday let? Our friendly, local teams based in Keswick & Windermere are always happy to answer your questions. Call us on 015394 88855 or email email@example.com and start your holiday letting journey today.
Still not sure if holiday letting is for you? Take a look at our top five reasons to buy a Lake District holiday let, and which locations are best to buy in.
** This blog has been adapted based on original content written by Alice Wills Nov 2019
Please Note: The information contained in this article was accurate at the time of writing, based on our research. Rules, criteria and regulations change all the time, so please contact our prospective new owner team if you’d like to hear how. Nothing in this article constitutes the giving of financial, tax or legal advice to you; please consult your own professional advisor (accountant, lawyer etc). in this regard. If we have referred within the article to a third-party provider of unregulated holiday let mortgages, this is due to the fact that such mortgages aren’t currently regulated by the FCA.
As a helpful reminder, your home may be repossessed if you do not keep up repayments on a mortgage, so again anything you decide to do in this particular area this is one on which you should take your own professional advice on too, as we aren’t providing and can’t provide you with this.