Many people buying a property, do so with the intention of renting it
out, at least to cover their overheads. This is feasible, but there are
significant expenses attached. Ideally, these expenses should be calculated
before purchasing. They are fundamental to renting out well and can make
the difference between your property being a liability or a money-earner.
Unless you are buying a stylish turnkey property, probably the most
important of these, is to budget in good lighting, comfortable and tasteful
furnishings, A/C, good quality linens, table ware, kitchen equipment and
bathroom accessories. If the bathrooms and/or kitchen look ‘tired’, upgrade
them.
Any outside areas will require garden chairs, cover from the sun or
rain, good lighting and where possible, a barbecue. All of this comes at a price, especially if
you avoid the plastic (advisable!).
If you ‘get it right’, your property could surpass the overheads and become
a money earner.
A great exercise in ‘how to get it wrong’ is to look critically through
ads on Airbnb and Booking.com, while asking yourself the question, would I want
to holiday in this place?
The answer, is very probably not! Pokey apartments and large farmhouses with worn furnishings, dark
bathrooms and manky looking kitchens, is not many people’s idea of a holiday.
But there’s a lot of it out there!
Renting out, especially in the Cortona and Tuscany area, is a highly
competitive market. Good photographs are a must. Your property needs to appeal
at first glance.
It also needs to be priced right. Again, check out Airbnb and
Booking.com. Be realistic as to what you charge.
THE DOWNSIDE OF RENTING OUT: If you’re not personally on the ground to
manage and undertake cleans, changeovers, breakages and breakdowns, you will
need someone to oversee your season. This is a 24/7 job and comes at a price,
especially if you don’t intend taking your own bookings or placing your own
advertising.
Rental management costs can be anything from 25% to as much as 50% of
the gross income generated. Doing your own advertising and bookings means you
can generally agree a fixed fee with your rental manager, as opposed to a
percentage (a significant saving).
Taxes can start at 21% (for which no deductions are allowed) and then go
up (with deductions), depending on what services you offer.
The services to offer (or not) can be a minefield to navigate without a
professional.
A professional will also need to do you an annual tax return (required
by law for any money earned on Italian soil.)
Other costs to budget in are advertising, cleaning, laundry, higher
water and electricity bills (especially if there is air/con) and if a country
house, gardeners and pool services.
Maintenance issues always arise during the rental season. It’s advisable
to put aside an emergency fund for this eventuality, as well as replacing worn
items for the following season.
And just remember, however good your rental manager may be, if there’s a
big problem, the buck stops with you. So, to be safe, a good insurance cover is
probably worth the while.
THE UPSIDE OF RENTING OUT: Rentals can cover overheads and even
render an income.
The most modest home can be made to look quaint or appealing if you are
prepared to research the market and make the initial investment of creating the
right ambience for your guests.
Happy guests will write good reviews.
Good reviews will get you more guests.
You will reap the benefits by having a property in which you can unwind
and relax at zero cost. A property that
might, if you get it right, also provide you an income!
