Running and owning a holiday cottage

I’ve been involved with four holiday cottages over the passed few years. For one of them, I just cleaned. Two of them I manage everything from bookings to cleaning, washing and ironing. The fourth I have been involved in the technical aspects where I’ve helped a friend set up her holiday cottage and get her first booking.

Since I’ve been involved in these different roles, I’ve had many conversations with people about how they could set up and run their own business. I thought it was worth writing a few pages with my ideas and the pros and cons of this as a business / money making model. I’ll cover some basics here and then follow up with some more specifics in detail later.

For clarity, I don’t own any of the cottages with which I’ve been involved. I do this work and get paid by the people who own the cottages. They have asked me either due to their distance from the cottages, their lack of time, their lack of experience or a mix of all of the above.

The Cottage in Earl Sterndale
The Cottage in Earl Sterndale

You can make good money running a holiday cottage but you need to bear in mind several things. Due to the fluctuations of seasonal holiday-making, you must always consider your costs and revenue over a 12 month period. Winter has a low income and, for me, because I need to provide guests with logs for the fire, etc, it can be much harder work. Summer is much easier and, if you decide on seasonal pricing, you can make more money. It is worth considering closing for a winter month for maintenance, especially if your costs might be higher than your income. You need to look across 12 months and, if you want a regular income, you might need to hold some money back during the summer and pay it to yourself in the winter.

You also need to consider if you will do the work yourself or if you will use other people or services. Obviously, you can make more money doing things yourself but it’s surprising how time consuming it can be.

All the cottages I’ve been involved with have been within a mile radius of where I live. You need to consider how far you can travel on turnover days but also if you get called due to a problem. You can’t always expect guests to flip a switch in a consumer unit if the electricity trips. Having an hour round trip to flip a switch at 9pm when you’ve just sat down with your family is not nice. Also, if you arrive at the cottage to prepare it for guests and realise you need a screwdriver which you haven’t brought, will you have time to fetch it. My cottages generally have a departure time of 11am and an arrival time of 3pm. This gives a window of 4 hours which isn’t a lot of time if you need to do some unexpected work.

Lilac Cottage in Earl Sterndale
Lilac Cottage in Earl Sterndale

The washing, ironing and cleaning can be outsourced but, again, each function you don’t cover yourself is erroding your income. These services can be bought and will depend on the size of the property (e.g. bedrooms, bathrooms, living rooms, etc) and what you expect to be done on changeover day (e.g. water plants, change batteries, gardening, etc) in addition to the usual tasks of changing beds and cleaning. I guess you could be paying between £40 and £60 for a one bedroom cottage depending on the extras you might need.

Finally, the part people usually forget about, and actually costs the most to outsource, is the “selling”. This covers advertising, marketing, booking the diary, responding to enquiries, meet and greet, etc. Basically, all the stuff you need before you really need to bother about all the other stuff. There are companies which can do most of this for you and they might charge about 20% of your booking price. You get informed that a booking has been made and you just need to arrange the “domestic” stuff. They handle all the booking process and even the prices. They have good internet and publishing presence so will likely get a lot of bookings, even if you might not be getting as much income as you’d like.

Alternatively, you can advertise and market your property via websites like Airbnb and Trip Advisor. Depending on your country, they charge about 4% but you need to do the legwork of bookings, responses, etc yourself. It’s tempting to use the cheaper option (and that’s what I do) but it takes a lot of time and you need to respond to people promptly or risk being penalised.

In all, there is good money in running a holiday cottage but it depends if you’re willing to do the work yourself. It’s not easy and the market is getting saturated do, if you want to get on the bandwagon, start planning now before it’s too late or legislation is tightened up to cut down on the number of holiday cottages in certain areas.