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Holiday Letting business viability, Profit and Loss v Desirability

By Andy the stuff doer


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Running a Holiday Letting business is a real option for us. It would involve buying a property then running it as a business. Considering actually doing it involves weighing up the desire to have a property in a specific location for our own occasional use against the effort and financial aspects.

I like to work on figures so I’ve created a spreadsheet to model the business. The spreadsheet puts together the income and costs, then makes a simple comparison against alternative investments. What it doesn’t do, is to factor in the desirability of owning and using the property. I also need to consider the time and effort that would have to be put in.

If you are looking at this sort of investment, you might what to download the spreadsheet and plug your own figures in.

Furnished holiday let viability calculator

Brief explanation of the spreadsheet

Enter your figures in the blue cells

Purchase price /deposit, used further down to factor in mortgage payments and other potential investments.

Fees and set up, add on purchase costs and 1 off set up costs

Price per week, check out the competition and set likely prices

Occupied, enter f for a full week, 1 for a 3 day short break and 2 for two short breaks in 1 week. The part week rate gives the price for these.

The graph shows the income per week. The sample figures I’ve used indicate a property that is either unpopular or under marketed.

Variable costs Booking related, Agents fee, cleaning per occupancy,gas/electric per year estimate if fully occupied.

Fixed costs, unavoidable overheads per year

The results of this section are in the Basic Balance Box.

Having the figures in this format allows a quick assment various scenarios. What if we can increase prices? What if we market it better to increase occupancy? etc.

The rest of the sheet is me playing about with considerations for me to throw in to the mix. Answering questions like.

  1. What if I just kept the money in a high interest account.
  2. Whats the growth on the property value
  3. How does it compare against two residential property lets
  4. Whats the cash flow implications taking in to account tax and tax credits.

If you get this far down on the sheet let me know and explain it some more.

We’ve not come to any decisions yet but at least with this we can back up our thoughts with some hard figures.

One Response to “Holiday Letting business viability, Profit and Loss v Desirability”


  1. Warning: Use of undefined constant user_level - assumed 'user_level' (this will throw an Error in a future version of PHP) in /home/idostuff/public_html/blogs/wp-content/plugins/ultimate_ga.php on line 524
    Jaylee on November 9th, 2009 at 6:56 am

    Warning: Use of undefined constant user_level - assumed 'user_level' (this will throw an Error in a future version of PHP) in /home/idostuff/public_html/blogs/wp-content/plugins/ultimate_ga.php on line 524

    I liked your blog a lot.

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