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Monthly Wrap: The best ways to maximise your returns when renting out your second home

currency-newsMonthly Wrap: The best ways to maximise your returns when renting out your second home
Given most second homes spend a large portion of time vacant, letting them out for short-term rentals can be a great source of passive income for their owners.

If you’re thinking of renting out your overseas property for the first time, or even if you’ve previously tried it, we’ve compiled our best tips for maximising your returns.

 

5 means of maximising revenue when renting out a property abroad

 
  1. Identify your breakeven point

Before anything else you need to fully assess the operating costs of renting out your overseas property.

For example, the amount you spend on insurance, mortgage and any maintenance need to be considered prior to setting your rental fee.

At the bear minimum you need to ensure these costs are covered by the rental fee. Add-up all the costs the property will inflict on you over the course of a year and divide by twelve. This will provide you with the minimum rental fee you should be charging per month to breakeven.

 
  1. Research

Once you have your minimum fee, you should research the prices set for properties similar to your own and in the nearby area.

You should make a list of its qualities – good and bad – so you can set a realistic target.

Factors worth considering are: Does it have on-sight parking? Is it situated near local amenities? How good are the transport links?

Market demand will significantly impact the rental fee you’ll be able to set: if the area is highly sought after, you’ll be able to set a higher price.

On the other hand, you should also be aware of any negative qualities which could cap how much you could charge. If there is anything you can do to offset these drawbacks it might be worth investing a little more into the property to improve your long-term profits.

 
  1. Appearance

The quality of the property, both interior and exterior, will impact the price you will be able to set.

A positive ‘kerb appeal’ (the aesthetics of a house when stood looking at it from the kerb) has been known to increase house prices.

There are a number of relatively easy changes you can do to make the house appear more attractive.
This includes painting the front door and windows, tidying up the pathway, and ensuring the garden is presentable.

By having a good appearance, it is likely to appeal to more possible tenants; in turn, this will give you additional choice on who you would like to rent your property.

 
  1. Permanent or Holiday

It is worth exploring the different types of renting you would benefit from on a personal level.

For example, if the property is simply an investment, then you should consider permanently renting out the property to someone local from the area.

This way, not only will you be giving a home to a local person, but you’ll also have a reliable income, with the tenant paying rent every calendar month.

On the other hand, if you wish to use this property as a holiday home yourself, you should consider making it an available holiday home to others when you’re not using it.

However, you should note that most your earnings are likely to be focused in the holiday season, thus a higher weekly rate should be set to ensure you still profit year-round.

 
  1. Saving money when repatriating the income from your rental property

Once you have decided whether to rent your second home out as a holiday let or to permanently rent out to a tenant, and are certain you’ve set the highest possible fee, you need to consider how best to repatriate your profits.

By moving your money through Currencies Direct you will not only avoid any transfer fees you are also likely to secure a more competitive exchange rate than you would from most high street banks.

Currencies Direct also offers a range of services which can help you to further maximise your returns when renting out your second home.

For example, with a forward contract you can fix and exchange rate for up to a year, protecting your money from any unfavourable shifts in the currency market.

Our currency wallets allow you to sort multiple currencies and then transfer your money when it works for you, either online or through our app.

Currencies Direct have helped over 325,000 individuals and businesses move money abroad since 1996. They have an ‘Excellent’ Trustscore on Trustpilot, over 20 global offices and a team of more than 500 currency experts.

Get in touch with the team now if you’d like to talk through your options.
 
Currencies Direct

Currencies Direct

Currencies Direct is one of Europe's leading non-bank providers of currency exchange and international payment services. Since we were formed in 1996, we've maintained our focus on providing innovative foreign exchange and international currency transfer services to corporations of all sizes, online sellers and private individuals. We have also expanded our services to provide dynamic and pioneering "business to business" solutions to help companies, tier 2/3 banks and other non-bank financial institutions to process their international payments. Our headquarters are in the City of London (United Kingdom) and we have operations in continental Europe, Africa, Asia, and the United States. Currencies Direct is jointly owned by private equity firms Palamon Capital Partners and Corsair Capital.

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