Got an expensive Christmas ahead? Want to make some extra cash over the Christmas period? Then if you’re going away for Christmas, you could make hundreds of pounds by renting out your property while you’re away.
Holiday letting is a great way of getting some easy income. But if you’re worried about your property being damaged, read our seven easy steps to how you can let out your home safely and profitably.
Step 1- Check your insurance policy
Before letting out your property, check that your home is well insured. If you have a mortgage, you should already have buildings insurance, which covers you for any damage to the actual building itself.
But if you want to protect your valuables, then contents insurance is vital, as it will cover the costs of your possessions being lost, damaged or stolen.
When letting out property, as a landlord, you must make sure that the property is safe for tenants. As a landlord, you must get gas and electrical certificates to prove that your home is safe. Gas certificates must be issued by CORGI (Council for Registered Gas Installers) registered technicians.
Local gas technicians can be found in the Yellow Pages or online and they usually charge £30 to £90 for an inspection. Electrical certificates are issued by electricians who are registered with the NICEIC (National Inspection Council for Electrical Installers and Contractors). They can charge up to £250 to carry out an electrical inspection.
Get more information on the regulations you must follow as a landlord here.
Step 2 - Decide on the right rent
Work out how much you want to charge your prospective Christmas tenants. It’s important to set the rent at a realistic price, so that you attract people to stay in your home. The rent depends on three factors – the location, quality and size of your property. For example, country homes are popular as holiday rentals over the Christmas period due to holidaymakers preferring places such as the Cotswold’s, Cornwall and Devon. So you can charge a higher rent for your country home than an inner city property.
The rent also depends on what facilities are in the local area; for example, local shops, places of interest and amusement parks.
Take a look at holiday rental websites, such as holidaylets.net and ownersdirect.co.uk, to find out the rents in your local area so you can see how much other landlords are charging.
Step 3 - Advertise
You can use your personal contacts to find out if anyone would like to rent your house or you can advertise online. Property rental websites, such as www.findaflat.com, let you advertise your home for rental for free.
When you post an advert for your rental property, it’s vital that it’s appealing. Here are out tips on making your advertising effective:
Step 4 - Take a deposit
Once you’ve got some interest for your rental property, assess your potential customers to find the right tenant for you.
Customers will usually contact you by email. Respond to them politely and try, if you can, to build up a rapport with them. Try to make your tenants feel comfortable to stay in your home. Outline clearly the dates you are letting out the property and the rent you are charging.
It's vital that you take a deposit from your tenants before letting them into your home. By doing this, you can ensure that they won’t be a no-show on the agreed dates plus the deposit covers the cost of damages.
To take a deposit you can use an online payment facility, such as PPPayor Moneybookers. This transfers the tenant’s deposit into a holding account where it will remain until the end of their stay. If no damage occurs, the deposit can then be transferred back into the tenant’s account. This online facility will give your tenants security that you will protect their deposit and not run off with it!
Step 5 - Get it in writing
When taking a deposit, it's important that you keep a list of the items you have left in your property when renting it out, in case any damage occurs. So that you don't miss any possessions or appliances, a property inventory is an easy way of listing all the items in your home.
It's also important to get your tenants to sign a holiday letting agreement, so that you have got the terms of the holiday let in writing. It's vital to create a letting agreement in case anything should go wrong or there are any disagreements.
Step 6 - Prepare the property
Make sure that your home is clean and tidy. Lock away any valuables that you’re leaving behind.
Write a list of useful contact numbers which can be used in the case of an emergency. If you think that your tenants will find it hard to use your appliances, leave them instructions on how to use them.
Step 7 - Tell the taxman
The profits you make from your holiday rental should be reported to HM Revenue & Customs (HMRC). If you earn less than £2,500, you will need to complete Form P810. HMRC will then adjust your PAYE accordingly. If your rental income is above £2,500, you will need to complete a self-assessment tax return.
Finally, just enjoy the cash you’ve received from your holiday rental in the January sales!
Published on: December 14, 2010