Could you profit from a Holiday Let Tiny Cabin?

Glamping opportunities? Ever wondered if a holiday home would be a good investment opportunity for you? If you’re a land owner and are looking to diversify, then a holiday let could be perfect for you!

Why should I consider holiday rentals?

Holiday lets in the UK are rising in popularity. After Covid-19 (and don't forget about Brexit) there's been a higher demand for UK breaks with some areas believed to have a shortage of holiday properties. Should you find yourself in one of these locations it could be an amazing opportunity for both placing your home onto your land as well as a chance to make some additional income!

Furthermore, greener cleaner stays are on the rise with 57% would feel better about staying in a particular accommodation if they knew it had a sustainable certification according to Booking.com

This is winner for new glamping sites as you don’t need to run through a new retrofit of greener cleaner materials. Instead, you can purchase a future proofed model ensuring your stays make continual profit without the worry of a furture retrofit of materials due to new standards that are on the horizon.

So, you have the land and the opportunity for permissions for a holiday site, but will your site be profitable? Read on!

Are holidays lets profitable in the UK?

They most certainly are, if done correctly! 

First of all, location is key. If your land is close to a place of interest, nature site, beach or popular attraction, then you should already be feeling lucky! But, before you jump for joy, you'll first want to see how saturated the market is. To begin your journey simply search for glamping/camping sites in your area. You'll want to see no less than one and no more than three to four within a 10-20 mile radius of your plot (size depends on whether you are in a town or a village). 

Should you discover one or two sites within your vicinity, this means that people are already frequently staying in your area! Whoo-hoo!! 

If you find three or more, you may find that the number of stays in your area is already at an optimal capacity and the need for more may be unnecessary. Still, if you were to think outside the box, you could create a unique way to holiday to poach customers the following year! 

How much money could I make?

By looking at your competitor's pricing within your area, you can do some simple math to determine how much you could turn over from a cabin. For example, if your local glamping site prices a night's stay for £150, then you would equally expect this from your own, and possibly more depending on the quality and finish of their cabins compared to your own.

To work out your potential profits, we always recommend basing your occupancy at 60% which is 219 days. 

£150 x 219 days = £32,850 per cabin per year!

Based on a £50,000 cabin, you will claw your money back within 334 stays!! 

What other costs will I incur?

For general costs here is a basic outline which is calculated annually:

Electric & Water = £1000-£3000 per unit (Dependent on model)

Cleaning £40 per clean (min two nights stays = 110 days x £40) = £4400

Breakfast (optional) between £3-£10 depending on how grand you wish this to be (219 stays) = £657 - £2190

Marketing and Ad spend: Using websites such as Cool Stays, Canopy & Stars or Airbnb will cost you per month. Expect to pay £500-£1000 per site. Please note with a luxury model, you may only require one of these websites.

This is all dependent on your chosen model. Should you choose Shepards huts or models that require lots of heating then you may need to factor in these additional electicity costs. Using our models that use aerated showerheads and composting toilets to reduce water by up to 50% as well as air heat source pumps that reduce heating bills by up to 60% you can begin to see the long term savings of choosing a model with eco credentials.

Are there any disadvantages of buying a holiday let?

Of course, it's not always so shiny. There are several things to consider from the cleaning, maintenance, and energy bills including the daily management stress of booking and being there for your guests. 

Expect approximately 40% of the profits to go towards cleaning, marketing and maintenance leaving you with £19,710 profit per home. Still, in 10 years that's £197,100 making back the money and some! 

Another key disadvantage to really think about is the general wear and tear that will need to be factored into your nightly pricing. Otherwise, you may end up with a big bill for a few years and don't forget the monthly items such as the occasional broken glass or plate. 

Luckily, there are a few things that you can do to reduce wear and tear such as providing super plush slippers that scream 'Wear me!' located next to a shoe rack. You can encourage your guests with polite signs to keep the place clean and tidy along with luxury picnic wear such as hard plastic flutes, cups and plates for outdoor dining. 

Cleaning is the next issue with some cleaners charging up to £50 per cabin!! If this is the start of your adventure you may discover that this job falls upon yourself and whoever else is involved. Daily changeovers and cleaning can be a nuisance which is why we suggest offering a slightly lower price but a min 2-night stay to reduce washing bedding too often. To help reduce the cleaning, we provide an MVHR to keep the air clean reducing dust particles for less daily cleaning! 

Bills, bills, bills. You would hope that your guests would be conscious of how much energy they use, but sadly, this isn't the case. As you are responsible for the utility bills, they will more than likely leave lights on, heating on for longer and leaving appliances on rather than switching them off. A good suggestion for the cooler months is to switch the heating on one hour prior to arrival (switching it off when they arrive). As it is already warm, they will more than likely not consider switching it on until the temperature drops. Another bonus regarding our own models is that they are EPC A-rated allowing them to keep warm in the winter months. Pair this with low wattage underfloor heating that can be powered by wind or solar and your bills could be as tiny as your tiny house! 

This also leads to how often your cabin can be used. Different types of cabins are suitable for different times of the year, and so, choosing a cabin that can withstand the cooler temperatures will allow you to increase your rental capacity to 70% adding another £5500 per cabin per year!

What's the take home message for buying a cabin for holiday lets?

First of all, make sure you are in the right location then take a look at properties in your area that are doing well. Some websites show the occupancy of the cabin which will give you an idea of what you could expect. You can also list key places of interest such as country parks, nature sites, local pubs and restaurants including features that you may want to offer such as hot tubs and barbeque spaces. 

When choosing a cabin, don't skimp on the basics such as quality toilet paper, fast WIFI, TV or books for your cabin. Entering a cabin that feels like camping will sting the wallet! This also means soft bedding and towels that match the price the guests have paid. 

Good marketing is the key to a successful holiday let. Ensure that your cabin is on Pitch Up, Airbnb, Glamping sites, Coolstays and marketed to local towns or cities close to your location. A good website is beneficial to provide your guests with more information about who you are, what's in the area and why choose your cabins over the ones across the road. 

Once you have your marketing plan, basic website, plan for cleaning, costs prepared and a budget for your cabins, you are ready to tackle the world of holiday letting!! Good Luck!