If you’re planning to rent out your overseas property, it may be helpful for you to consider the following to help make it a successful investment.
Are you allowed to let the property?
You should check that you are allowed to rent your property out on a short-term basis as some countries do not allow foreigners to rent property. Some resorts or apartment blocks may have their own restrictions for example the amount of weeks it can be let out and when. These restrictions will all impact your potential rental market.
Are you planning to use the property yourself?
Whether the income is something that you will rely upon or will just use to help with the running costs should be taken into consideration when deciding when you will use the property. If you plan to have large family get-togethers over Christmas and New Year in your impressive new ski chalet in Val d’Isère or if you want to spend the whole of August enjoying your Sicilian villa, you could be losing your most lucrative rental weeks.
Work out how many weeks the average property in your area rents for and what price you could get for each week before making your plans.
When you invite strangers into your house you have to accept that they may not look after it as well as you would. You should invest in a lockable cupboard to store away any personal or valuable items to be left at the property.
How are you going to attract interest?
Having your own website to advertise your property can have cost benefits but there are so many competing websites you need to advertise somewhere you will definitely be seen. Reputable holiday rental websites can be a great way to get exposure to millions of holidaymakers and manage booking enquiries.
Wherever you advertise, having great photos and descriptions can really help set the holiday scene and sell a stay in your property. Make beds, set tables, and turn on fires for the photos to maximize the property’s appeal. Guests will want to see exterior shots, outside facilities and the view, plus photos of each room.
Know your target audience and research the price of similar properties and other accommodation in the area. You should get an understanding of the type of tourists that visit the area and what they will want from the property. Running offers to attract off-peak holidaymakers can help maximize the periods when your property is rented.
Personal recommendations and online reviews have a big impact. Providing little extras such as a welcome pack of basics and local goodies and a file with useful information on local attractions, activities and transport can enhance a client’s stay and get them raving about your property.
Luxury furnishings and features such as log fires and hot-tubs can attract holiday makers to your property and may enable you to charge higher rates.
How will you manage the property?
Managing your rentals and the maintenance between lets from thousands of miles away can be difficult and time consuming. Hiring a good property management company is often a sensible solution as they can be available to arrange cleaning between lets, securing and checking the property and taking away the hassle of day to day management.
A property management company will also be able to liaise with you clients to hand over keys, answer queries and arrange additional services to ensure that your clients’ stay is as smooth as possible and that they will recommend your property to others.
A 20% cut for the property management company is usual but can be much more so you will need to be sure of what the property management company will do for you. You should ensure that you have checked that they have a good reputation so that they are able to deal with any queries you have and manage any unexpected problems.
What legal requirements do you need to comply with?
You will need to inform the taxman in the UK as soon as you start earning money from your home abroad. You may also need to complete a tax return in the country where you own the property.
You should make sure that you keep all receipts and papers relating to your expenses as many costs, such as letting agent’s fees, legal fees and insurance, are deductible from the rent you have to pay tax on.
You will also need to make sure that you inform the household insurer for your overseas property to ensure you are covered for using the property as a rental. You should also ensure that you have insurance in place to protect you should someone decide to sue you after falling down badly lit stairs or tripping on a dislodged tile.
Make sure you read the small print on your insurance documents and satisfy yourself that you can comply with any restrictions such as having the water turned off during vacant periods.
You may also need to ensure that furnishings fit in with any legal requirements, such as made from flame resistant material and ensure that the property meets health and safety requirements.
If you need advice from an overseas lawyers in relation to purchasing a holiday home or rental investment contact Worldwide Lawyers who can put you in touch with a specialist independent lawyer.