Renting Out Your Holiday Lodge or Static Caravan
With the demand in UK holidays, or staycations, likely to boom in 2021 due to uncertainty around coronavirus travel restrictions, you may want to rent out your holiday lodge or static caravan. In fact, you may be thinking of buying a leisure home as an investment and renting it out when you’re not using it. Once the British public discover (or rediscover) some beautiful parts of the country, they may want to go back. This means that the demand for UK leisure homes and holiday homes could remain high for the next few years.
Here are some important things to consider before renting out your holiday lodge or static caravan.
Does The Holiday Park Allow Commercial Lets?
First and foremost, check the holiday park rules. Your contract with the holiday park owner should tell you whether you can rent out your holiday lodge, static caravan or leisure home on a commercial basis. You may find that you can hire it out to friends and family, but not for a profit. Alternatively, the park may only allow you to hire out your holiday home if they are responsible for managing the bookings. Therefore it’s important to check.
Enlisting The Holiday Park Owner To Manage Your Leisure Home
If you are permitted to rent out your leisure home and you have the choice whether to use the holiday park owner, you may still want to take this option. There will be a fee for this service, but they will help you to prepare your holiday lodge or static caravan for letting. For example, they may help with inventories and legal compliance. They may also screen tenants, arrange cleaning and help with maintenance. Don’t forget that you will need to tell them in advance when you want to use your static caravan or holiday lodge to make sure it’s available for you.
Legal Requirements When Renting Out Your Holiday Lodge Or Static Caravan
If you rent your leisure home on a commercial basis then you become the landlord for your guests. This means that you need to comply with certain safety regulations. These include the following:
- Have a professional gas safety check for your leisure home and display a ‘Landlord’s Gas Safety Certificate’
- Have an electrical wiring safety check every three years to maintain a fixed electrical installation certificate
- Have a smoke alarm in good working order and test it regularly
- Have an up to date carbon monoxide alarm
- Have a fire extinguisher (tested and working) and a fire blanket
- Display a fire safety notice with clear instructions of what to do in an emergency
You may also want to carry out portable appliance testing (PAT) for electrical items such as the TV, kettle, toaster and microwave to ensure they are safe for your guests to use.
Check The Insurance For Your Holiday Lodge or Static Caravan
It’s important to check the conditions of your holiday lodge or static caravan insurance to make sure that you’re covered for letting out your leisure home for a profit. At My Holiday Home Insurance, we have been specialising in insurance in the leisure sector for 15 years, so we understand what our customers want. We have a flexible policy structure so we can easily accommodate a change in your circumstances. Even if you think you’re covered, you must tell your holiday lodge or static caravan insurance provider that you intend to rent out your leisure home.
Making A Profit
When deciding whether to rent out your holiday lodge or static caravan, you’ll need to take into account the costs involved and the potential income that you’ll receive.
How much you can charge for people to stay in your holiday home will be determined by a range of factors:
- Location – the local holiday home market, proximity to transport network, beaches and other holiday attractions
- The size of your leisure home – number of bedrooms, bathrooms, size of living spaces, etc
- Facilities at the holiday park, such as swimming pool, tennis, golf, etc
- Timing – school holidays (especially Easter and summer holidays) will attract a premium. You may want to consider offering a discount on Monday – Thursday bookings compared with weekends during off-peak times of the year.
You also need to take into account the costs that you will incur:
- Cleaning – your holiday lodge or static caravan will need to be cleaned between bookings. You may want to consider a minimum booking period to ensure you cover your cleaning costs sufficiently.
- Maintenance – general wear and tear on your leisure home will increase the more it is used. In addition, some refurbishment work may be needed before you start renting out your leisure home. Consider having maintenance contracts for your boiler, for example. You may also want to consider Home Emergency Cover if there’s an emergency when your leisure home is being rented out.
Paying Tax On Your Leisure Home Rental Income
The income that you gain from renting out your holiday lodge or static caravan will be subject to tax, so you’ll need to inform HMRC and complete a tax return. Some of your business expenses may be tax deductible.
Don’t forget to take into account when you and your family are likely to be using your holiday lodge or static caravan. It can be a joy to have your own leisure home in your special place, as well as saving you money on paying for a holiday elsewhere. Renting it out not only provides you with additional income, but allows you to share the experiences with others.
For information about insurance for holiday lodges, static caravans, leisure homes and holiday homes call our Northampton office and speak to one of our specialist insurance advisers on freephone 0800 988 0890.