If you were ever thinking of changing your lifestyle and using your well-earned cash to make money for you in order to get that ideal work/life balance, then getting into the holiday home rental business is definitely an option.
There are people that own their own holiday home earning huge monthly earnings. On top of this, those that worked abroad and bought an apartment or house but have since changed location have decided not to sell and instead offer their place to holidaymakers.
How Much Money Are We Talking About?
It really depends on the size of the property, the country, location, and the size of the property.
Therefore, in order to put things into perspective, let’s take your average 1 bedroom apartment next to the beach somewhere like Phuket in Thailand. Assuming the apartment is near the beach and has public transport, you are looking at somewhere in the region of $75 a day income. Over a month we talking about $1,500. The outlay for a 1 bedroom apartment in Phucket is somewhere in the region of $100,000 to $200,000 depending on amenities and facilities.
In places such as Florida, 1 bedroom apartment in Miami is being rented out at a daily rate of around $100.00 per night. That means the property is earning the owner $3,000 a month.
A Business Worth Building
There are quite a few property owners that have kept their current job, and they also own property that rents out as a holiday home. With these saving the owners earn from their holiday home, they are able to get a second mortgage on another property to expand their business.
Banks will allow the original property to be remortgaged or to be used as collateral. Basically the old saying goes ‘money goes to money’ is true within this line of work. The more capital or collateral you have, the more you can buy resulting in higher potential earnings.
Imagine having 2 holiday home apartments in Phuket simply turning over $3,000 a month. Add a third and fourth all the same apartment block, and you have $6,000 a month coming in and 4 apartments altogether worth between $400,000 and $800,000.
On top of this, the prices of property continue to rise globally. Let’s say the 4 properties above were worth $500,000 and property prices are going up an average of 4% a year. That’s $20,000 a year, and over 5 years more than $50,000 added on to the owner’s wealth.
Why Has The Holiday Home Rental Industry Suddenly Skyrocketed?
There are tons of websites out there now open for people to list their holiday home on. This is exactly the same process hotels went through getting their rooms listed on a website. Now that concept has been moved to allow holiday homeowners to go into competition versus the hotels by listing their holiday home as an option.
The website gets a 10% to 20% commission for every successful rental agreement made between the owner and holidaymaker, and in exchange, the owner can list their property for free. These types of websites were previously unheard of because there wasn’t really any company out there marketing this concept. Now when you look around at the price of a hotel versus a vacation rental, usually you get a full property to yourself and complete privacy at around 70% to 80% of the price of a hotel room.
Having guests also offers the opportunity to market the property to them. Many holiday home owners will have their own custom website builders such as this one by Lodgify. The owner can offer discounted rates for recommendations, the chance for the guests to extend their stay at a cheaper rate and get bookings on the custom-built site.
This allows the owner to do his/her own marketing, build up a brand, and gain a loyal following of holidaymakers that regularly visit the location the holiday home is situated. It makes sense because once you have visited a place and found accommodation you like to stay in, then it stands to reason that you would only book the place again.
One of the reasons the reason this line of business offers the perfect work/life balance is that once the property has bookings and guests are in the property, there is generally not much work to be done. There will, of course, be the odd booking inquiry, and the occasional issue that needs to be sorted out when guests spot a problem, but aside from this what else is there to worry about?
Arranging check-ins and check-outs can be done using key code lockers that can be controlled remotely. Keys can also be placed in mailboxes with a code, key exchanges with the front desk can possibly be arranged, or door padlocks that store key in them can be used. There is no need to be present for check-in or check-out.
On top of all this, the owners are able to manage their entire business online. Hiring cleaners to take care of linens and cleaning is inexpensive because traditionally in this industry most websites the property is listed on, the guest is charged for cleaning anyway, so that covers those costs. If you have an apartment, then the building will already have a maintenance team, and cleaners can be used to replace breakages – just pay them a little extra.
Most owners have their holiday home rental business running almost entirely on its own. All the owner needs to do is check-in with cleaners, guests, and log on to the websites the holiday home is listed on in order to make sure everything is running smoothly. Some days there are no issues at all.
Is This Industry Realistic For you?
Although there are many career options in this niche industry, many of the professions such as property management, marketing, and content still take up quite a lot of your time. Being a property owner within the holiday home rental business is the best position to be in.
Nevertheless, that does mean you will need to have a fair whack of cash to back you up. You also need to make sure you have good research skills if you do not already own a holiday home, but you plan on buying one for exact purpose of using the place for yourself as well as to make money from it as a business.
For example, in places such as Thailand, there are plenty of prebuild apartment deals available. This means the apartment is under construction or there is a plan to build the apartment block. If you buy an apartment before it is built, you can usually get it for 70% of the post-build value, and some companies offer buy 2 apartments get 1 free. Yet, you would need to make sure the construction company is legit, that it will finish the job, and check how bust the area is and how likely it is you are going to attract guests.
All that being said, the main point we trying to make here is the work/life balance that is end result of successfully navigating the obstacles involved with getting a holiday rental business off the ground. It is not easy in the beginning because there is a lot to invest, you need content, you need to list the property on multiple websites, and most importantly you will need feedback so more people will book.
Once you have everything in place, literally you can make money working roughly 10 hours a week and earn a decent income that gives you more time to do the things you want to do rather than spend the rest of your life constantly working.