There are over 2.64 million second homes in America being used for recreational, occasional, or seasonal use. The popularity of second homes is ever increasing as more and more Americans are enjoying local holidays that allow them a chance to rest and relax before returning back to work.

You may have enjoyed a relaxing vacation very recently and come away thinking, “I could do that!” So, whether you’ve recently been inspired or you’ve been pondering the thought for a while, this article is for you. 

We will discuss the path to profitable and sustainable holiday rentals because it often takes more work than initially meets the eye.

How to Begin

To successfully set up a holiday let business, it is important to consider the property you’re looking to buy, the location it’s in, the day-to-day management requirements, and avenues to successful advertising.

Unfortunately, it’s not as easy as choosing somewhere nice and hoping for the best. So, here are a few things you need to consider when starting out.

Getting A Mortgage

Of course, the first step in holiday letting is having a property to let. It might sound silly, but many people assume buying a second home will be easy (particularly if they’ve been through the mortgage process before). However, this isn’t always the case.

According to Forbes Advisor, “If you’re buying a property in a tourist hotspot and want to let it out frequently – particularly at peak holiday times – then you’ll need a holiday let mortgage […] It’s a good idea to use an independent mortgage broker. They will be able to discuss your needs, join the dots with your finances, and find the best mortgage for your requirements.” 

Whether you’ve bought a house before or not, purchasing a rental property is a big financial commitment, so it’s important you do the figures and ensure you can afford it. If you have bad credit or other circumstances that may make buying more difficult, there are options available. 

As Pete Mugleston, Managing Director at Online Mortgage Advisor says, “There are mortgage brokers who specialise in bad credit, and their knowledge, experience and lender contacts can significantly improve your chances of mortgage approval and landing a low rate.”

Whatever state your finances are in, it’s important to connect with a mortgage broker who can walk you through the process from start to finish and ensure every ‘T’ is crossed and every ‘i’ is dotted.

What Kind of Holiday Rental Should I Buy?

Buying a holiday home takes a lot of time and consideration. Choosing the right holiday home, in the right location, can certainly have a big impact on your future profits. So, it’s important to put a lot of thought into these decisions. Let’s take a look at some things you need to consider:

Location: choosing the right location is vital for attracting holidaymakers looking for a nice place to stay. Settling on a good location will ensure you have a steady stream of visitors (and income) to help set you up for success.

The best locations are those that attract a lot of tourists, have plenty of amenities nearby, offer lots to see and do, and provide easy access. While properties nestled away in the woods are attractive, they’re often too far removed from civilisation to be overly profitable. For many people, finding a balance between rural retreat and city living is ideal.

The Property Itself: secondly, the property you purchase must be in good condition. Whether you purchase a fixer-upper or you buy a property that’s ready to let, it’s extremely important you ensure all the necessary work is carried out before you advertise.

The property you choose should be structurally sound, clean, and free from mold, leaks, and other damage. Nobody wants to stay in a property that isn’t well looked after. A property that is properly maintained isn’t just important, it also keeps your guests coming back time and again.

Property Size: the size of your holiday rental will depend on your budget. However, it’s worth considering how big your property needs to be. The size of your holiday home can affect your profits as the bigger the property, the more you can rent it out for. It is worth highlighting that larger properties do require more maintenance and care which can be expensive. Take your time considering your options so that you can make the right decision for your needs and budget.