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Holiday Let fees?


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Have posted a few times about my journey and HMO experience, including wanting to diversify a bit.

I’ve seen a flat for sale which is already being let on a holiday let basis. So, have figures for the previous year from the holiday letting agent. Gross figures are fantastic!

Flat is asking price £167k, gross income is £19k for last year.

But the agent fees and agent VAT fees are a massive 27%

Anyone got experience in this field and know the going rates?

Once you add in change over costs it starts to loose appeal......

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Sounds a bit high - but not far off what I have been quoted c20% plus vat, great incentive to do yourself. Or find someone local to manage for a cheaper fee direct ? When I lived in Brighton a couple of local guys did a great job doing changeovers and owner managed website Lettings herself? 

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  • 2 weeks later...

 

Thanks guys. I got some clarity on the figures the agent charges 18% + VAT.

I think Im going to go for it. The net returns are not as good as the typical student HMOs I go for. However, I need to diversify and I think there it probably more scope for capital growth with this property & it appears less risk (easier to sell on & could be let on an AST if need be).

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Not a lot as far as I can tell!

Marketing and bookings only.

Doesn’t include the day to day running, change overs, sheets, etc.

I know another company that charges 15%. However, being new to holiday lets I don’t have the knowledge to judge which agency would provide the maximum return. No point being with the cheapest agency if your occupancy through them falls!

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I've got a few of these properties, both in Budapest and Liverpool, and I've never paid a penny to an agent. I do it all myself. You need to pay for the cleaners and that's it. They buy anything you need in the way of bedding or toiletries, and you reimburse them for it. Never understood why anyone pays an agent 15-30% to manage holiday lets for them, unless they're either incredibly busy with the day job, so much so that they don't have a few minutes to spare each day to send messages to the guests, or they're so chronically lazy that they simply can't be bothered with it all and are willing to lose a huge chunk of the money just to save themselves a few hours worth work of each week. Always seems crazy to me. Another massive disadvantage is that the agent gets all the credit on the websites - she becomes the superhost on airbnb and you're nowhere - you've gained no experience, you're dependent on the agent and you can't easily get rid of her if you get fed up with her. There's this very strange objective in the UK when it comes to property investing, which is trying to earn "passive" income - and ironically, often bending over backwards to achieve that elusive goal. If you want passive income, buy a shop, or invest in blue chip shares - don't buy rental property, and certainly not holiday lets - part of the fun of the whole venture is to manage it yourself, otherwise you might as well be investing in Footsie 100 stocks and collecting your dividend each year - and you'll probably earn more money at that too than trying to earn passive income from property.

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