Holiday Letting Income Calculator
Once you decide to buy a holiday home in Cornwall, one of your first questions will be about income. How much should you charge holidaymakers? And based on this amount, how much can you expect to earn? The answers lie in careful research, planning and accounts.
How much to charge for a holiday let in Cornwall
Cornish holiday let properties fetch the highest average weekly price in the UK. £1,740 a week to be exact, according to a survey carried out in summer 2017 by Second Estates. Not only does the county have the most expensive holiday lets, prices went up by 14.5% in the year to June.
But to calculate how much you can charge for your property you need to do some research on the area and the competition.
Value your location
Most guests start their search for a holiday let by exploring what’s available in their chosen destination. Location is therefore your first indicator of how much you can charge. And by being in Cornwall, the UK’s most popular holiday destination, you already know rates will be above the national average.
But even within a prime holiday spot, there’s location and there’s location. Some locations in Cornwall can command a higher price than others. If your holiday let boasts a beachfront location or has a tourist honeypot on the doorstep, you can charge more than those that are a 10-minute drive away.
It’s also worth considering nearby attractions. A holiday let within easy reach of things tourists like to do – say within a 20-mile radius – will be more attractive to holidaymakers than a property in a more remote location.
Remember, the better the location, the more you can charge. And of course, the longer your letting season will be.
Sort out the seasons
You next need to think about seasons. Cornwall is one of the most privileged spots for holiday let owners in the UK because the letting season lasts longer than most of the rest of the country. A good property in the right location can expect to attract 35 weeks of bookings a year.
But you still need to define your seasons. Take a look at a calendar and divide the year into high, mid and low seasons. To help you work out high season, find out when school holidays are. As a rough guide, summer (July to mid-Sept), Easter and Christmas are high seasons along with spring and autumn half terms.
Proximity to interesting annual events also add to a holiday let’s appeal. Lots of things go on in Cornwall during the summer season but the county also has a good year-round calendar of things to do. The Royal Cornwall Show near Wadebridge in June, Golowan at midsummer in Penzance, Falmouth Oyster Festival in October and the Mousehole Christmas lights are just a few examples. If your property lies near an area with an important annual event, make the event dates high season – even if it’s just for a few days midweek or a weekend break.
Check out the competition
Once you’ve gauged the worth of your location and worked out your seasons, it’s time to check out the competition. Take a look at all the holiday lets in your area. Note their prices at different times of the year while taking into account how many bedrooms they have, the quality and modernity of decor as well as proximity to the nearest attraction (be that a beach, the Eden Project or a farm park).
Bear in mind that the advertised price may not be the price it rents for – the owner may apply discounts at certain times of the year – but you can get a rough idea of the target revenue.
Always factor in size and features when comparing. Look at the standards of finishes and fittings. In the competitive world of holiday lets, only those holiday lets with the highest standards can ask for top dollar rates.
Consider the special features offered in other properties and compare them to yours. This could be a hot tub or a playroom, an enclosed garden with climbing frame, or a 30 second walk to the beach. When deciding how much a feature is worth, ask yourself if you would pay extra for it.
And lastly, think carefully about how those features set your property apart from the rest. Do they create unique selling points (USPs) for your holiday home? The longer the list and the more attractive they are the more you can charge for a stay.
Tips for setting your rate
Once you have a good idea of asking prices in your area and what value you believe your property to be providing, it’s time to set a price. Do this using the competition as a benchmark.
Unless your property has lots of extras that will make a real difference to a stay, keep your prices in tune with those in the area. Most holiday letting portals allow price comparisons. If you set a rate above the competition, potential holidaymakers will ask themselves why. If they can see that you’re offering more for their money, they’ll probably book with you. If the reason for the price difference isn’t obvious, they’ll move on to the next (cheaper but seemingly equal) property.
But just as you shouldn’t overcharge, nor should you undercharge. Not only do you risk making a loss (never forget that this is a business concern), holidaymakers will ask themselves why your holiday let is cheaper. And probably come up with all the wrong answers. Find a happy medium with a rate that offers value for money but allows you to make a profit.
Don’t forget discounts
Think about discount rates. You might offer these in low season – say, pay for 3 nights and get 4 nights’ accommodation. Or consider discounting for guests looking for longer stays – a good idea in the winter or between high seasons (e.g. between autumn half term and Christmas). For last-minute bookings – this is a good way of filling odd weekends or cancellations. And for loyal customers – a discount for repeat bookings keeps guests happy and gets you recommendations.
Keep it simple
You’ll need a rate for each season but keep it simple. Have a maximum of four to six different rates a year so that potential guests can easily see how much they can expect to pay. List your rates clearly in table form that includes the dates for each rate.
You don’t necessarily need to include your discount rates – you might ad lib on these depending on the occasion and your occupancy rate. But do advertise the fact that you offer discounts for certain circumstances to encourage enquiries in the quieter periods.
Keep it even simpler
We’ve been helping people successfully let their properties in Cornwall for over 50 years. Make things super easy for yourself and ask us how much your holiday let is worth at different times of the year. We look forward to assisting you in making the most of Cornwall!