Subletting guests

Recently our housekeeper informed us that the guests who had booked to stay for a fortnight had left after 7 nights. The house was empty of all belongings and the fridge and cupboards were all empty except for a bottle of milk in the fridge.

Both keys had been left behind, one in the key safe (the house rules stipulate not to do so unless checking-out) and one inside the property. They had left the windows open and unlocked.

I sent a message to the guest to ask if all was OK and to inform him that the linen and towels had been changed as standard service for the second week of stay. He replied that yes all was OK but they had been out for the day and had not yet returned.

We thought it strange that someone would empty the holiday home of all their belongings and take them with them just because a housekeeper would be visiting to change bedding and towels.

Later that day he called me to ask where the spare key was as it was not where he left it. Giving the benefit of doubt I informed him that the housekeeper would return the next day to drop one off (she had found it and rightly put it away as she believed the guests had left).

As it turned out, the guest wasn't him, the car parked outside was different from the first week - according to neighbours.

He was obviously lying about being in the property trying to find the spare key. If he was merely sharing the fortnight with other family members or even friends, why all the secrecy and lies? It's not as if he got a discount because he booked  a fortnight instead of two seperate weeks. Perhaps it was to save on the agency booking fee, but that's a lot of deceipt to save a few quid.

Apparently, according to the holiday letting agency that took the booking, the guests had not done anything wrong. Should anything untoward have happened then the original guest that made the booking was ultimately responsible. They also informed me that since early 2018, holiday letting agents and owners are not allowed to ask details of the guests staying in their properties. Huh? So we are supposed to let our holiday home to people whose names and addresses we don't know and are not verified, and it would be considered illegal if we did so?... this is privacy laws gone bonkers!

I find it incredible that someone can give our security code to someone else to gain access to our property. Isn't that trespassing or illegal entry by the second party? We the owners did not give them any permission or instructions on gaining entry.

So watch out, now a complete stranger to you can book your holiday home but not stay there, and instead sell that week to complete strangers for more money. Who is to say whether any name they give is real, that their mobile number isn't just a temporary one and that their email is an anonymous one used only for the purpose of this fraud.

The name of our guest was a famous name, maybe these people use well known names deliberately. We have since tried emailing and calling the numbers without any response.

All we can do is change the security code for entrance to the property and double check that nothing is missing or damaged.

If you get lots of messages or calls from a guest in the weeks and days leading up to their stay, beware. They may be just insecure and need reassurance that their booking is going as planned, but questions about when the changeover day and precise time for fresh linen could be a clue that the second week will not be the same guests.

In fact who is to say that both of these weeks weren't sublets?

How Much Commission Should I Pay a Holiday Letting Agent?

Are you thinking about signing up to a holiday home letting agency? Not sure of the commission fees?

There are so many costs to take into consideration when running a holiday let, so commission fees on top of everything else can seem off-putting. However, they are for the most part a necessary evil when signing up with a holiday letting agency.

You may have already discovered that hardly any of the agencies mention these rates on their websites. Below are the average commission costs you can expect to pay, how commission costs are worked out, and ways you can save on your budget.  

How is commission worked out? 

Commission fees via holiday letting agencies are usually worked out based on a percentage of the booking cost. Most agencies work out their costs this way, although some larger holiday letting websites (such as Home Away) have a paid listing amount starting at around £350+. This is a good option if it turns out that they book up most of your available seasons. At first this is hard to know.

If you’re also paying for services such as property management (cleaning, laundry and maintenance) then these costs can be charged on top of your booking commission.

The average commission fees

For an average holiday let, the fees you can expect to pay are roughly 20% – 25% for bookings only. However, some of the smaller agencies may offer more competitive rates – for instance, we were charged 15% during our first year, which is highly competitive for the market. Note that they will charge VAT on the commission you pay to them.

Unfortunately, for most holiday letting agencies, the only way to really know how much commission you can expect to pay is to actually call them up and ask. This is because, like I said above, not many agencies will display these costs up front on their website.

Determining your costs

To figure out your costs, the best thing to do is to call up a few different agencies and work out exactly how much commission each will charge – as well as everything that’s included for that fee, such as:

• Marketing
• Administration
• Property management
• Changeovers
• Cleaning/laundry
• Waste disposal
• Professional photos

Once you have an idea of all you can expect to pay, you can factor this into your weekly costs and figure out your overall budget – Choose an agency that a) you’re happy with and b) makes financial sense. A balance of the two is usually the safest bet.

Ways to save on budget

If you are switching from another agency you may find you have some bargaining power since you are already established and may have your other services in place, such as cleaning.  You may or may not require a photo service either.

Some agencies are able to offer holiday let owners a bespoke service tailored to fit their needs, and this can be a great way to save on costs if you don’t want to pay for a full property management service. So, all you need to do is pick the services you need, and do the rest yourself!

The trick here is to pick a holiday letting agency that is happy to let you do that, but also be around to offer support and advice if and when you need it. Consider also whether they expect you to be exclusive to them or if they are happy for you to also be with other agencies.

Take your time when choosing and ensure you’re 100% confident it’s the right agency for you. Understand their payment structure - when do they release payments to you, what is their cancellation policy and if they operate a damage deposit policy, how does that work.

In summary

If you’re in the market for a holiday letting agency, one of the first things you’re going to want to learn is how much commission you can expect to pay, and exactly what you’re getting for your money – yet hardly any agencies actually display detailed costs on their website!

It’s usually worked out as a percentage of the overall booking cost, and the average you can expect to pay is around 20 – 25%. However, for full property management services, fees can be even higher, so I’d recommend talking to a few different agencies and getting some quotes to give you a rough idea.

You can save on your budget by choosing a bespoke service, and taking on some of the responsibilities yourself – however, I’d recommend finding an agency who will be there to offer support and advice when needed.

Should we charge for extras?

Charging for extra services in your holiday home may prove to have a negative effect on the total annual bookings. It may well be more beneficial to be seen to be adding extras for free. These days most people are asking for 24 hr free internet connection during their stay. It has become the norm and the annual cost to you as the home owner is coming down all the time. For example I discovered that this offer is available: Online Exclusive - Plusnet Fixed Price Unlimited Broadband & line rental £19.99
You may feel that you would like to ask a small fee for this, but perhaps it is better to include it in your overall rental fee, or absorb it. The same could be true of adding Netflix or Sky. This way your guests will see immediately what the holiday will cost instead of having to add all the extras to find out what the actual final cost would be.
You could argue that by not advertising your hidden extras allows you to display lower prices... personally I do not like the 'starting from' prices, which are there to entice you further.

Try also adding "what's included in your stay" to illustrate the extras you are not charging for such as free towel and linen service, free cleaning service, free logs for the fire, free baby high chair, welcome goodies and soaps.

The one extra that we decided to add to the overall price was a flat rate refundable damage deposit. Since guests have no intention of damaging your property they will happily pay this as they know they will get it back at the end of their stay. You can read more about why we decided to have a damage deposit in a previous article: Are there bad holiday guests?

Covering the Expenses of your Holiday Home

For many owners, the dream lifestyle of having a primary home as their necessary base and a second home in the sun wouldn’t be possible without the income they earn by renting to holiday makers. Some offset a significant portion of their expenses, making a holiday home an affordable luxury, maybe only a third break even on their properties, still an enviable position to be in. For a minority the profits cover other important living expenses such as their children’s education, or fund a pot for a rainy day.

If you wish to pay all or just some of your expenses, it is important to work out what you’ll need to cover.

The typical costs of running a holiday rental business include:

• Initial investment of renovations and/or refurbishment
• Monthly mortgage payments (including interest, taxes & insurance)
• Insurance (building, contents and liability)
• Complex, or grounds fees (if you own an apartment or complex)
• Utility bills (monthly, quarterly or annually)
• Maintenance, repairs and redecorating
• Housekeeping, or housekeeper’s fees
• Advertising and marketing costs

The cost of your mortgage rate should be fixed, so it’s easy to determine what your annual expenses should be (x12 monthly payments). Only the final three costs are expenses generated by turning your second home into a holiday rental. Maintenance and repairs would still need to be paid whether you rent to travellers or not, but it’s likely you will need to spend more if you have paying guests in mind. The cost of marketing is relatively low, so the main extra expense is housekeeping.

If you use a property manager you will also have to pay:

• Management charges (usually in the form of % commission)
• Agency fees
• Some property management companies might charge other fees

I regularly check for better deals when switching to other suppliers and providers. I switch regularly and recently I came across these:
Online Exclusive - Plusnet Fixed Price Unlimited Broadband & line rental £19.99 for 12 months plus £50 Reward Card and £5 activation fee

Switch to Octopus Energy and split £100 with us!