Before I start, I have a confession. I can’t spell accommodation, centre, calender, programe, which as a Landlord, is a worry. And I have become so confused by spell check, I do not know where I stand – so apologies, as I need to get some stuff off my chest, but give me a break if I am Queens English or American English, because twenty five years of Microsoft Word has left me a dribbling wreck.
But I want to help…and tell some stories. And help you crystallise your ideas with a punch of reality before you go and spend a lot of hard cash on a dream that might not be you.
So let’s start with how I got myself into this – We had a mortgage on a house we could not afford, so we moved out – we got a tenant in who then trashed it, so we were now in a financial pickle to say the least. We could not sell it because of the amount of work needed to make it right, all my local agents told me I needed £30k spent on it, which I did not have.
While I tried to figure out what to do next – I went down the pub. My knightress in shinning lycra bumped into me in a pub, because she fell in love with my dog (another story). She persuaded me my house was suitable to become a holiday let. By upgrading it to a certain standard, I would earn way more money than renting and I had met someone who could help me run it – the next day my new Housekeeper, no longer in lycra, and I sat down and worked out a plan of what she could do for the house, and what I needed to do to get it ready.
I invested the money to get the house back up to speed, did all the niggling DIY jobs and furnished the house to a good spec and bought all the linen, towels, loo paper and toiletries that come with the job. Within weeks I had taken one very sad looking house forward to one very shiny new holiday let. I make light of that, but it was a huge investment in time, money and marketing.
I fell back in love with a house I hated and once done up advertised with all the usual online agents and started getting bookings very quickly – Holy Moly, it is working, I thought. But it was! The money was great, my housekeeper was fantastic, the house looked amazing – we were getting most of our bookings through one company called Owners Direct. Their model was simple, you paid to advertise on their site, they took a small commission after that on each booking, but the booking kept coming – we were at 83% occupancy the first year!
That meant less than two days a week were empty, at premium rates. Owners Direct were happy, my housekeeper was earning good money out of me, the mortgage was paid, so were the heating bills, the internet, the cleaning, the dry cleaning, the council tax, the three set of linen to be bought, all the furniture, breakages, what about me?! Ohh, there goes the rub. The more bookings I had the more my running costs went through the roof, and with all that work, there were crumbs left for me after everyone else had taken there share.
The more bookings I took the more work I had to do managing the calenders, sending out confirmation letters, directions, how to get in, improve the welcome pack, deal with complaints or niggles, fix breakages instantly as people were paying for a perfect house, lost keys, the list goes on, but you get the idea…
Now as community minded as I am, I still have five other mouths to feed.
So here is my advice to all those looking to Southern Spain, or anywhere else, and eyeing up an opportunity. Firstly there is a good chance you have missed the boat – by the time you have heard about here on ‘Homes abroad’ ‘Places in the Sun’ you are not the only one. Yes, of course you can still buy at €20,000 cave, but believe you me there are plenty of people around to help you quadruple your investment to turn it into a liveable or viable business. And good luck to all of those trades, a fool and his money are soon parted. And on the flip side, if you have found somewhere where no one else has yet found, where is your customer base?
Years ago people where buying ski apartments in Bulgaria for €30,000 or so. Prices were going up, Exhibition shows were being held selling the dream. I used to ask one question – “Have you ever skied in Bulgaria?” “No”, was the typical response. My response to that was, “Nor has anyone else, so who is going to rent your €30,000 apartment?” And so, in less than five years, more apartments were built, providing more beds than the whole of the Alps combined. Two very small, crappy ski resorts with a total of 29 runs between them had more living accommodation than the entire Alps. No one went to Bulgaria to ski, no one rented the apartments, and no one could sell them. That is because more people that had ever skied in Bulgaria, were trying to sell their useless apartments they had bought.
I put myself in the same camp as all those eyeing up caves houses. I started knowing nothing about them, saw the TV programes on them and started researching them. Fortunately for me, having owned a handyman business, worked many years on the tools and have a pretty good eye for a deal, I like to think I have mitigated many of the potentials shortcomings – but equally importantly, am rarely in a rush, as such, I have found some excellent local/trustworthy trades, both Spanish and English – but also met plenty of others I have chosen not to have done business with, and others I have used and not used again!
Not being on the ground is a huge disadvantage and a costly mistake, almost more likely to be a bigger cost to you, than the saving you think you are making by carrying on working in the UK, or whichever country you are living in. Tradespeople, cleaners etc WILL let you down. You will need to get dirty and if for any reason you need to cancel a booking – do not expect the likes of Airbnb to be supportive, anything but. If you cancel, if you do not reply to an email, even if you reply but do not confirm or cancel a booking, if you accept a booking from another agent they WILL punish you. Your ratings go down, which they publish, which means you get relegated further down their advertising lists. If you become more popular on another site they will threaten to throw you off their site. If you cancel a booking they will fine you, then suspend you or throw you off.
I will give you a classic example – I got a booking, out of the blue in November in a small chalet we manage in France. In ten years, I have never had a booking in November. It is out of season and most people who live around the resort are on holiday before the ski season starts. The few remaining people are trades people – my future guests were a team of Romanians being paid to work on a chalet in Courchevel, and they needed accommodation.
Now, with Booking.com you do not have the option to vet somebody before they book, it’s really a system for hotels rather than holiday lets, so when a booking comes in, you have to jump, its on. The booking came in at 8pm on a Thursday night, for the next day at 4pm!
To put you in my mindset at the time, in a chalet 1,000 miles from where I was sitting I had a booking for the next day, and no one to clean, sort the linen or turn the heating on. The chalet had been empty since late August and my cleaner was away on hols. I had two choices: Cancel the booking and take the fine, PLUS, cover the cost of booking.com finding another ‘similar’ accommodation in the vicinity, or drive across europe that night and doing it myself.
We were putting the kids to bed and I turned to Tanya and said, can I have a word – right, we either can this booking, or I have to jump in the car in the next half an hour and do the clean myself. Within half an hour I had was on the road, drove all night, arrived at noon the next day, cleaned the chalet, made the beds, turned the water and heating on, and left for home four hours later – 2000 miles driven in 40 hours, but it was cheaper to make no money and drive 2000 miles than to cancel the booking.
How, in their right minds would own a holiday let? Here you go – here are the types – we are all one of them:
- You want a house in the sun/snow/by the sea/etc and sod the cost.
- You want a holiday home which makes money while you are not there
- You want to live in a house that has some other space that you can subsidise your existence.
- You want nothing to do with the house and you bought it to make a pure profit from it.
- You would never be so stupid and always rent when going abroad.
Number two is the most common reason for buying abroad, and the most naive followed by three and four. Number five is the most profitable and the number one the most aspirational, but deeply flawed.
They say if it floats, flies or f”cks, you should rent, perhaps they should add ‘has a freehold’ to that list.
Bearing in mind I am sitting in southern Spain while writing this and a holiday let owner, why am I so bitter? Thank you for asking, hold your breath because here we go.
Firstly there are fewer and fewer bargains to had – the cat is out of the bag and there are ‘se vende’ sign EVERYWHERE – nothing wrong with that, it just means you have to work harder to find what is right. Location suddenly is important, it all very well being cheap in the middle of nowhere, but no good if there are fifteen holiday lets as cheap and better located than you, already up and running
Ok, so lets move on, you have bought your place, you have found a builder that you like, trust and are happy with their quote, they start work, the work goes to plan, your place is ready – welcome!
What happens next, well, you go online and you join all the agents ready to sign you up, ohh, that’s quite involved, you will need to put at least a week aside to get all that right – then you discover that your photos are a bit shoddy, ohh, their photos are better than mine… Ohh, I need a local bank account – ohh, a local licence, liability insurance? Who are the ‘Junta?’ A sign on my door? Complaints forms? Take passport details? Three sets of bloody linen for each bed and my cheap furniture that I have always thought was fine, no longer is….
Ok, well done you have got through that and you have your space to rent and your budget has gone through the roof. You have signed up to six agents to spread yourself unashamedly across the world – that is twelve calender’s you have to look at and monitor and update when you have a booking – wow! really? This is taking more time/money than I thought. In fact, now you decide it time to do some market research and you discover that at an optimistic 50% occupancy level it will take you approximately 50 years to see a return on your investment so far.
But you convince yourself that it is still worth it, carry on. You carry on and people start getting interested and asking questions, you get very excited and respond with gusto. People reserve, people book, you update your spreadsheet. People go quiet, people cancel and all of a sudden your peak weeks that have been booked out for months lie empty as your over enthusiastic cancellation policy bites you on the bum – a cancellation and too late to get a new booking!
I have had all of that, update everything, nursed people to my door, then the reality, actual human interaction – the booking is coming, ohh no they want info, can they bring a dog? Are the stairs OAP friendly, (don’t lie), do you provide mint tea? Have you got a cot? Can I pay cash on the day? Do you take credit cards through Paypal. Directions – I can’t find you, can you come and pick us up? They turn up five hours later than when they said they would check in, I have had eight hours late, 2am instead of 4pm, but mentioning that would sound bitchy.
So, finally they are in, and looking – don’t forget you have either spent all day cleaning the space, or paid handsomely for someone to eat into your profits to do it for you – and they have never seen a cave before, it is a bit more basic than they expected – but they are in, you hover around hoping, against hope they like it and wont hassle you again.
I had a call once, and I always get these calls when I think I can relax and not have my phone near me, just for a few minutes peace. I made the mistake of going on holiday, not a holiday I wanted, but the obligatory summer holiday with all four freeloading ankle munchers on the oversized vehicle I had to buy to fit them all in, when a smart car would have done if I hadn’t have been so careless.
Anyway, I kid you not, having driven overnight, which is a mistake in itself, I was turning left into the campsite with the pool – not the cheap one I wanted/could afford, but the one SHE wanted, to make the kids happy, anyway, the phone went…”hi there, we love the house, we have had a great time, but…the water has come up past the power sockets and as an electrician myself, I cannot let my children stay here any longer. It’s not your fault – the leak is due to the illegal structure that has been built attaching your house, I have left the keys on the side, sorry – Bye!” I guess I would not have screamed at my two year old quite so harshly for not helping to uncouple the caravan, had I not taken the call.
Perhaps I would not have screamed for a second time quite so loudly if I had not have known that if I was on holiday, so was the rest of the UK population and the chances of me being able to get the flood sorted before my next guest turned up in a days time!!
Which meant two things – that in a place like Margate where the flood has just happened, I had to break the news to the person arriving for their Summer holiday, their Summer was now cancelled. The only way to rectify it would be to find them alternative accommodation at zero notice from my WIFI void campsite in rural France – impossible and if it was available in August, I think the quality might be somewhat lacking – why else would it be available in peak season. The agent they booked with is now getting calls of complaint which they pass on to me ( I already know, no, there is nothing I can do, no I do not have another house tucked up my sleeve, etc). So the agents fine me and seek alternative accommodation at my expense, I am like a rabbit in headlights……
But that doesn’t happen here near Baza, because it doesn’t rain, which is what I still tell myself as I rescued my sun umbrella and a chair out of the river this morning, and assured another happy guest that if they come again we can normally see all of Sagra from the terrace I deemed too dangerous to dine on.
Ok, back to the point, you have your place, you have had it decked out – and you get my point, big problems only seem to happen when you are not there – so you ring your ever-so-helpful agents when something goes wrong – thank god I phone straight through to Bangalore, because they will help solve any problem.
You get the idea – all those agents you have signed up to are worse than shit when things go wrong. I have been fined thousands of pounds for cancelling bookings when I have not been happy to take the booking.
Our first New Year in Spain we had a booking in our B&B for eight. My sister -in-law, fluent in Spanish when we were not, explained in detail what the deal was at our house, It’s our house with some rooms to rent. Yet, that message did not compute with my guests who turned up thirty strong, ready for a rave and told me I had to leave my house. Then when I refused, my children were crying by now, they called the Police, and I called Airbnb.
So, to build the picture, I jumped in my car, to get them away from my house and made them follow me to a cashpoint machine so I could pay them off. By the time we get to the town, we meet the Policeman they had called and while I was simultaneously being dragged from my car by the Policeman, surrounded by thirty teenagers, I am on the phone to Airbnb in America who helpfully tell me, they understand, but unfortunately, if I cancel, they will fine me. Also, if I do not want to lose my ratings, I should allow the booking to go ahead. I thank them and tell them that if I survive after my gang rape in the cells of a Spanish prison that night, I will call them in the morning.
If you have made it this far and think you are strong enough to brave it, then good for you. You need to calculate the true costs – Booking.com and Airbnb take a big chunk of your profits, they fine you if you double book – Booking.com once charged me £700 for a weekends booking that was double booked – my mistake, yes, it happens, but on a booking where I was meant to make £400 I then was charged for putting them up in the nearest alternative, a four star hotel….
The agents are not your friends – they pressure you to respond within minutes even though you might be on a different timezone and asleep – they WILL mark you down for any delay in responding, so never sleep. A bad review you are relegated low down – but you can buy your way out – which just says it all. They take their 15%, they leave the responsibility with you – totally, but you hold all the risk – what vetting do these agents do on your guest? Someone comes through from Owners direct and trashes your house – where do yous stand? Alone.
The point of this article is simple. To put the fear of god into you – to make you think, to think that a cheap property price is not a cheap ticket to a money earner.
There are plenty of locals who have caught onto the fact that ‘Giddies” will buy anything – don’t get pulled in. Talk to as many people as possible. You can learn as much from someone who is there to help you as someone who is there to play you – either way it does not matter, you learn from experience.
My personal opinion, you cannot do this business without the online agencies, they make your business, but they are a bureaucratic soleless computer programe on a server in Iceland. When they work, they are great, but as soon as human factors get involved they are as useless as chocolate teapot and worse blameless, with all of the blame and mess left neatly on your doorstep. In fact they don’t just leave a mess on your doorstep – they set in fire then ring your doorbell and you stamp on it to put it out then find out they have charged you for the pleasure. You cannot win against them, there is no reason, no sole, the computer just says no.
Eleven years we have done this, so think long and hard. You need to understand the true costs, not just the exciting top line. Every person who does this works more hours than they would ever admit. They are all truly dedicated people with the best of intentions having worked so hard for a few euros only to discover that, the bed had been broken, the dog slept in the bed and the linen cannot be used again, the loo was blocked, the tea was too hot/cold and they slated you in a review – reviews yes, I have not even gone there!
We have had bad reviews for our location, we advertise the fact we are in the middle of nowhere! I had one person review me and it was for a completely different house, what an idiot – that was the last time I ever asked a member of my family to review me. I feel a completely separate blog on reviews alone coming!
If you think this is an easy option for some additional income, you need to think hard whether that really is true. Of course, there are many excellent businesses all around who are doing well, who offer an excellent service and are perhaps not as battle weary! There is plenty of space for more. The area is ripe for tourism to explode, and everything I said just melts to nothing when some fun, lovely people walk through your door who are kind thoughtful and interesting. We have had some fascinating people such as the Hungarian, but living in Iceland, couple last week, who we really enjoyed spending time with. We have had Americans living in Bali, English living in France, Spanish, Dutch, Welsh and Italian – it really is exciting at times.
Just never forget that behind it all, it needs to be profitable. They say information is king, it’s not. It is hard work and dedication that is king in this field. And if you cannot give that, don’t beat yourself up, find out what you are good at and do that, here, if you can. Simples.
Ohh, and despite everything, I live off all the above.