Holiday accommodation is now a very popular way of letting your home. This is letting your home to holiday or business guests, all stays are short term, a few days to several weeks. Good revenues can be achieved and annual net incomes can be well in excess of traditional residential letting. Occupancy of your home is not continuous, making your home also available for your own use, or that of your family and friends.
Here we offer you a brief introduction to Holiday Accommodation letting and offer you the opportunity for further detail and a professional assessment of the suitability and potential of your home for Holiday Accommodation letting.
Letting your home for Holiday Accommodation
Holiday accommodation letting is making your home available for short term letting to holiday guests or those only seeking short term stays. This market has become very popular for both property owners seeking to generate income and visitors to Queenstown seeking more value, more space, less formality and a quality stay.
The Business Model
Your home needs to be supplied to the market fully furnished, with all hard and soft furnishings, bedding, crockery, cutlery, utensils and appliances that makes a guest's stay.
We manage your property on your behalf, including home setup, marketing, reservations, sales, guest care, servicing, and maintenance of your property. We collect all revenues and after we meet all authorised expenditure we will forward you a statement of activity and net proceeds of revenues earned, on a monthly cycle.
Our relationship with you is documented by a written agreement.
We market our properties across multiple online channels, manage all guest enquiries, then solicit or confirm reservations and seek full payment before each guest stay. On Guest departure, each property is professionally checked and serviced to industry best practice standards and made ready for the next guest.
Revenues received are reliant on current market tariffs and the level of occupancy that is desired or achieved. Expenses are generally related to occupancy and will only increase if your occupancy increases. Net incomes can be very strong, but they do fluctuate, especially across seasons. Incomes are not constant, there will be strong months, there will be weak months and there are no income guarantees, but annual incomes are typically higher than long term residential letting.
You do need to be aware that this letting activity is operating in the tourism accommodation sector and it is affected by all parameters of that market.
We follow your direction on how you would like your property run, some owners only seek a small amount of visitor use and some wish to maximise the use of their home and hence maximise their incomes and maximise their investment. Occupancy can be controlled by tariffs or excluding availability.
The holiday accommodation property is operating in the tourism accommodation market and there are standards that are expected by the market place. We can guide you through these standards but they will be dependent on your property and your expectations.
Net incomes of up to 8% net return on the market value of a property can be achieved and still allow short-term use of the property for the owner.
Holiday Accommodation versus Residential Letting
Holiday accommodation lets to guests on a nightly basis, Residential letting is to long term residential tenants and falls under the regulation of the Residential Tenancies Act 1986.
Residential tenancies will typically generate a steady income, but not at a level achieved with Holiday Accommodation.
If you require lending to complete your property purchase, you may find that your bank may not accept income from holiday accommodation use as being acceptable to meet loan payment obligations.
Not all properties are suitable for holiday accommodation and will be more suited to residential tenancy.
Holiday accommodation use will increase the wear and tear on any property and owners of properties letting to holiday accommodation use will need to spend on cleaning and maintaining good to high standards of presentation.
Long term residential letting typically does not allow for owner use of the property.
Investment returns with residential tenancy use can typically range between 4% to 6% net on the market value of the property.
If holiday accommodation letting is not for you, please contact our Residential Management Team (Megan Palmer or Stephanie Drader) and they can guide you through this renting alternative.
Holiday Accommodation Pros and Cons
Residential Tenancy Pros and Cons
Fisken & Associates Ltd trading under the Professionals brand have been operating for over 30 years in Queenstown as licensed real estate agents. We are Queenstown’s longest serving real estate agency.
We pride ourselves on professionalism in our practice, customer focused service, and we always strive for customer satisfaction.
We have been operating property management services for 30 plus years and we take our role of guardians of your asset seriously:
- Professional sales processes for handling enquiry and maximising reservations.
- Multiple online marketing channels to maximise market coverage.
- Industry best practise reservation, payment and accountancy systems.
- Experienced and professional property management.
- Reliable and trustworthy trades network.
- Consistent and reliable home services experts.
- A team of mangers with broad ranging skills and experience.
- Our status of licensed real estate agent means that we meet all statutory real estate licensing requirements and that we are monitored and regulated in our activities as licensed real estate agents by the Real Estate Agents Authority.
- Our Real Estate Institute of New Zealand membership is a further statement of our commitment to professionalism.
- Professional financial management systems. All monies collected on behalf of our clients are held in trust, each owner's account activity reconciled against the bank account monthly, with activity statements and payments to owners within two working days of month end.
- Responsible, trustworthy, motivated, professional and successful.