Earning Potential

Earning Potential

Estimated Earnings From Your Property

This document is intended for use by interested parties who are considering purchasing a property to combine its use as a holiday letting property.

The following prices are merely estimates based on averages for the area.

The final costs and income achieved will depend on a number of factors for each individual unit, such as the way the property is furnished, whether the owner will consider short breaks, whether the property is pet friendly and even the quality of the linen used within the property.

One Bedroom Properties

Year 1 Marketing
Based on local letting rental properties, a year 1 peak season price of £650 per week. The cheapest out of season week should be marketed at £405. Short breaks could be offered at 70% of the weekly cost, except for peak weeks when a minimum booking of 1 week should be sought.

Costs
Costs to consider are the following. 18% letting cost, £65 changeover cost, £10 welcome pack, £2 per booking on items such as toilet rolls, kitchen towels.

Example of income for Peak week;

  • + £650 peak booking
  •  – £117 for letting fee
  • – £65 for changeover cost
  • – £12 for welcome pack and toiletries
  • Potential profit + £456

Example of Income Out of Season

  • + £405
  • – £72.90 for letting fee
  • – £65 for changeover cost
  • – £12 for welcome pack and toiletries
  • Potential profit + £255.10
Additional Information
  • The property owner will also have to factor in electricity usage for the individual property.
  • A caretaking/ key holding charge would be payable to the management company in order to cover guest call outs, necessary administration associated with running a holiday let, and manage any initial maintenance issues at each separate property. This cost is currently £40 per month (£480 per year). This cost is factored into the final calculations below.
  • The cost of letting the property would vary throughout the year, and the lowest cost offered should be the sum above, rising to the top peak season fee (before any last minute booking deductions are applied if necessary)
  • 20.12 weeks total letting occupancy was the average across Devon in 2015 based on one local agent’s occupancy figures. Letting a 1 bedroom property at the sums suggested above should allow the owner to achieve a letting income (10 peak weeks and 10 lowest priced breaks) before tax/ associated costs of £10,550. (Letting fees, changeover costs and Caretaking/ Keyholding costs deducted – £6631)

Two Bedroom Properties

Year 1 Marketing
Based on local letting rental properties, a year 1 peak season price of £1050. The cheapest out of season week should be marketed at £500. Short breaks could be offered at 70% of the weekly cost, except for peak weeks when a minimum booking of 1 week should be sought.

Costs
Costs to consider are the following. 18% letting cost, £95 changeover cost, £10 welcome pack, £2 per booking on items such as toilet rolls, kitchen towels.

Example of income for Peak week;

  • + £1050 peak booking.
  •  – £189 for letting fee
  •  – £95 for changeover cost
  •  – £12 for welcome pack and toiletries
  • Potential profit + £754

Example of Income Out of Season

  • + £500
  • – £90 for letting fee
  • – £95 for changeover cost
  • – £12 for welcome pack and toiletries
  • Potential profit + £303
Additional Information
  • The property owner will also have to factor in electricity usage for the individual property.
  • A caretaking/ key holding charge would be payable to the management company in order to cover guest call outs, necessary administration associated with running a holiday let, and manage any initial maintenance issues at each separate property. This cost is currently £40 per month (£480 per year). This cost is factored into the final calculations below.
  • The cost of letting the property would vary throughout the year, and the lowest cost offered should be the sum above, rising to the top peak season fee (before any last minute booking deductions are applied if necessary)
  • 20.12 weeks total letting occupancy was the average across Devon in 2015 based on one local agent’s occupancy figures. Letting a 2 bedroom property at the sums suggested above should allow the owner to achieve a letting income (10 peak weeks and 10 lowest priced breaks) before tax/ associated costs of £15,500. (Letting fees, changeover costs and Caretaking/ Keyholding costs deducted – £10,090)

Three Bedroom Properties

Year 1 Marketing
Based on local letting rental properties, a year 1 peak season price of £1695. The cheapest out of season week should be marketed at £695. Short breaks could be offered at 70% of the weekly cost, except for peak weeks when a minimum booking of 1 week should be sought.

Costs
Costs to consider are the following. 18% letting cost, £165 changeover cost, £18 welcome pack, £2 per booking on items such as toilet rolls, kitchen towels.

Example of income for Peak week;

  • + £1695 peak booking.
  • – £305.10 for letting fee
  • – £165 for changeover cost
  • – £20 for welcome pack and toiletries
  • Potential profit+ £1204.90

Example of Income Out of Season

  • + £695
  • – £125.10 for letting fee
  • – £165 for changeover cost
  • – £20 for welcome pack and toiletries
  • Potential profit+ £384.90
Additional Information
  • The property owner will also have to factor in electricity usage for the individual property.
  • A caretaking/ key holding charge would be payable to the management company in order to cover guest call outs, necessary administration associated with running a holiday let, and manage any initial maintenance issues at each separate property. This cost is currently £40 per month (£480 per year). This cost is factored into the final calculations below.
  • The cost of letting the property would vary throughout the year, and the lowest cost offered should be the sum above, rising to the top peak season fee (before any last minute booking deductions are applied if necessary)
  • 12 weeks total letting occupancy was the average across Devon in 2015 based on one local agent’s occupancy figures. Letting a 2 bedroom property at the sums suggested above should allow the owner to achieve a letting income (10 peak weeks and 10 lowest priced breaks) before tax/ associated costs of £23,900. (Letting fees, changeover costs and Caretaking/ Keyholding costs deducted- £15,418)

Four Bedroom Properties

Year 1 Marketing
Based on local letting rental properties, a year 1 peak season price of £1995. The cheapest out of season week should be marketed at £825. Short breaks could be offered at 70% of the weekly cost, except for peak weeks when a minimum booking of 1 week should be sought.

Costs
Costs to consider are the following. 18% letting cost, £180 changeover cost, £18 welcome pack, £2 per booking on items such as toilet rolls, kitchen towels.

Example of income for Peak week;

  • + £1995 peak booking.
  • – £359.10 for letting fee
  • – £180 for changeover cost
  • – £20 for welcome pack and toiletries
  • Potential profit + £1435.90

Example of Income Out of Season

  • + £825
  • – £148.50 for letting fee
  • – £180 for changeover cost
  • – £20 for welcome pack and toiletries
  • Potential profit + £476.50
Additional Information
  • The property owner will also have to factor in electricity usage for the individual property.
  • A caretaking/ key holding charge would be payable to the management company in order to cover guest call outs, necessary administration associated with running a holiday let, and manage any initial maintenance issues at each separate property. This cost is currently £40 per month (£480 per year). This cost is factored into the final calculations below.
  • The cost of letting the property would vary throughout the year, and the lowest cost offered should be the sum above, rising to the top peak season fee (before any last minute booking deductions are applied if necessary)
  • 12 weeks total letting occupancy was the average across Devon in 2015 based on one local agent’s occupancy figures. Letting a 2 bedroom property at the sums suggested above should allow the owner to achieve a letting income (10 peak weeks and 10 lowest priced breaks) before tax/ associated costs of £28,200. (Letting fees, changeover costs and Caretaking/ Keyholding costs deducted- £18,644)

Further Costs to Consider

 

There will always be further costs to consider for any property owner.

Wine glasses get broken, carpets will need steam cleaning once or twice a year and specialist insurance for owning a property that is let to guests will need purchasing, but overall the process of running and owning a holiday property can be financially and personally rewarding.

For any further information, please contact Dawn or Quintin Smith on 01548 521526 to discuss your specific needs in further detail.

Tel: 01548 521 526

Mob: 07759 122 602

Email: info@moortoseaholidays.co.uk

Moor to Sea Holidays
18 Barnfield
East Allington
Totnes
Devon, TQ9 7QR

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