How to budget for your first year as a holiday let owner
Your first year as a holiday let owner involves setup costs, ongoing running expenses and a learning curve on income. Planning a realistic budget from the start helps you avoid surprises and make better decisions about how to manage your property.
Buying a holiday home to let is exciting, but the financial reality of year one can catch new owners off guard. Between furnishing the property, meeting safety requirements and covering running costs before the bookings start flowing, there is a lot to plan for.
Here is a practical guide to budgeting for your first twelve months, so you can go in with your eyes open and set yourself up for a profitable second year and beyond.
Setup costs: getting the property guest-ready
Before you welcome your first guest, you will need to invest in making the property appealing and compliant. Typical setup costs include:
- Furnishing and styling: Guests expect a comfortable, well-presented space. Budget £2,000 to £10,000 depending on what is already in place.
- Professional photography: Good listing photos are essential for bookings. Expect £150 to £400 for a professional shoot.
- Safety compliance: Gas safety certificates, electrical inspections (EICR), fire risk assessments and PAT testing. Budget £300 to £600 for the initial round. See our compliance checklist for the full list.
- Insurance: Specialist holiday let insurance typically costs £300 to £800 per year.
- Welcome packs and essentials: Toiletries, tea, coffee, cleaning supplies and information packs. Budget £100 to £300 for initial stock.
Ongoing monthly costs
Once the property is live, you will have regular outgoings to factor in:
- Utilities: Council tax (or business rates), electricity, gas, water, broadband and TV licence. Budget £300 to £500 per month depending on the property.
- Changeover and cleaning: Each guest turnover involves cleaning, laundry and restocking. Costs vary by property size but typically range from £60 to £150 per changeover.
- Maintenance: Things break. Budget a contingency of £100 to £200 per month for repairs, gardening and general upkeep.
- Management fees: If you work with a co-host or agency, this is usually a percentage of booking revenue. HolidayHost charges a flat 10% plus VAT with no hidden extras.
For a detailed breakdown of all the costs of running a holiday let, our complete guide covers everything from insurance to waste collection.
What income to expect in year one
Be realistic about earnings in the first few months. It takes time to build reviews, climb platform rankings and establish a booking pattern. Many owners see lighter bookings in the first quarter before things pick up as reviews accumulate and the listing gains visibility.
If you are launching in Cornwall or Devon, timing your launch to capture the spring and summer season makes a significant difference to first-year income.
For a sense of what established properties earn, see our data on holiday let earnings in Cornwall.
A simple first-year budget template
Here is a rough framework to work from:
- Setup costs: £3,000 to £12,000 (one-off)
- Monthly running costs: £500 to £900
- Annual running costs: £6,000 to £10,800
- Realistic year-one income: £8,000 to £25,000 (varies hugely by location, property and season)
The gap between income and costs is your net return. With the right pricing strategy and professional support, most owners move into profit during year one, with significantly better returns from year two onwards as the property builds its reputation.
