Renting out your holiday home when you're not there can help cover the costs of owning property abroad, like mortgage payments, maintenance, local taxes. And it might even bring in a tidy profit.
But to make it work, you’ll need to be organised, informed and a bit business-minded.
And even if you’re just letting family and friends use it, you’ll save stress if you approach things like insurance and who pays the cleaner like you’re running a business.
Here’s how to do it right from day one.
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Know the local rules
Before you hand over the keys to paying guests, get familiar with the local rules in your new home-from-home. Many countries, and even regions within them, have strict regulations for short-term holiday lets.
For starters, you’ll probably need:
A rental licence or tourist registration number
To meet safety standards (think smoke alarms, pool fencing, gas certificates)
To pay local tourist taxes or declare rental income locally
No shortcuts here: skipping the legal bits can land you with fines, a ban on letting, or even worse.
If your property is in a shared building, make sure you turn up to local residents’ meetings, as building rules can be passed there and then.
It’s always best to use local professionals to make sure you have everything in order. A local property lawyer or rental agent can help steer you through the paperwork.
Get the right insurance in place
Regular home insurance won’t cut it. You’ll need specialist cover for holiday lets that includes:
Guest-related damage
Public liability in case someone has an accident
Loss of rental income due to cancellations or issues like a burst pipe
Some insurers offer packages specifically for overseas holiday homes. Make sure you’re covered for both the property and your guests.
Make your holiday home rental-ready
Even if your property’s just for weekenders, they’ll expect the basics – and a little wow factor doesn’t hurt.
Here’s what helps:
Neutral, inviting decor that photographs well
Hard-wearing furniture that can handle families and spills
A properly kitted-out kitchen and plenty of clean linen
Fast, reliable Wi-Fi (no longer optional!)
A welcome pack with local tips, house instructions and contact info
Photos really do sell holidays. A pro photographer is worth the money – they’ll help your property stand out on crowded booking platforms.
Choose your property letting style
There are two main ways to rent out a holiday home:
Short-term holiday lets
Short-term letting of your holiday home offers more flexibility to use it yourself when it’s free. It usually means higher income in peak season, but also much higher costs in terms of advertising, changeovers, cleaning and admin. This is not a passive income stream, unless you outsource the work.
Long-term holiday lets
Letting your holiday home long-term comes with steady income, less wear-and-tear and infinitely less hassle. But you lose the flexibility of using it for your own holidays on a regular basis.
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Get the pricing right for your holiday rental
Too high, and you'll get tumbleweeds. Too low, and you’re missing out. Look at similar listings nearby and adjust your holiday home’s rate depending on size, facilities and season.
Consider using dynamic pricing tools like PriceLabs and Beyond Pricing. These tools adjust your rates based on demand, local events and even weather, helping you stay competitive without constantly tweaking prices yourself.
Managing bookings and guests
With easy-to-use platforms such as Airbnb or Vrbo, getting bookings for your holiday rental home is easy.
However, managing a holiday rental from a different country is where things get harder.
Even if you install smart tech like keyless entry and remote thermostats, you’ll need someone to clean, do maintenance and generally problem-solve for you. You might want someone to help pay your tax and do your advertising, too.
One option is hiring a local property management company to handle all of this for you. Or, if you have friends in the local area, you could come to an arrangement with them - although make sure they are readily available and you trust them to be on hand as required.
Whichever route you take, good communication is essential. Think welcome emails, check-in instructions and quick replies – these are what lead to the kind of reviews that your rental business will live or die by.
Paying tax on a holiday rental
If you’re renting out a holiday home abroad, you’ll usually need to pay:
Income tax in the country where your property is
UK tax on the income too (though double taxation agreements may reduce this)
Local property taxes
The good news? Many costs – including mortgage interest, repairs and agent fees – can be deducted.
Speak to a tax adviser who understands cross-border property rules to stay on the right side of HMRC (and your host country).
Is renting out your holiday home worth it?
It all comes down to how much work you’re ready to put in versus how much you want to make a return on your holiday home investment.
It’s best to get your priorities right from the start. If you’re buying a holiday home overseas as an escape for you and your loved ones, the hassle might not be worth it.
But if you’re looking for income too, what a great way to get it! With the right support – and a little effort – you can enjoy your home in the sun and have it pay for itself too.