MARKETING

If you intend to let your property then you need to be prepared to spend some time and money on marketing it correctly. The first few years are always likely to be tough, but if you ensure you put the work in early on and spend time making your property feel welcoming and homely, then you are sure to build up a regular client base which will probably sustain you for the foreseeable future.

To start with, you need to get your property advertised–there are numerous ways of doing this. One of the best ways are holiday websites. For a small fee–and, in some cases, no fee at all–you can upload details about your property to the website, and allow people to view and book online. There are also numerous magazines and newspapers where you can place advertisements, and a wealth of property management companies that will handle all the marketing, booking details and cleaning of the property for you.

If you intend to let your property then it’s probably sensible to set up your own email address and phone number–especially if you don’t want to publicise your home phone number. There are also a number of cheap and easy website packages out there so you can set up your own website.

If you decide to market your own home, be prepared to do the following:

• Follow up on queries straight away.
• Check your email and phone messages daily.
• Be prepared to advertise, but make sure you do your research and advertise in the right medium, depending on the type of tenant you are trying to attract.
• Think about having your own brochure printed and do an annual mail-out to previous tenants.
• Make business contacts in the local area and arrange an advertising deal with them–in return, you could recommend them to your clients.
• Advertise your property by word of mouth back in the UK. There are always rentals to be secured by sending emails around at work or getting friends to recommend your property.
• Keep an inventory of the contents of the property so you know if anything has been broken, damaged or stolen.

MANAGEMENT COMPANIES

If you don’t feel you have the time or expertise to manage the letting of your property, then you can employ a property management company to do it for you. This is especially handy if you are not residing in the same country as your rental property is located. Generally speaking, if you manage the letting of your property yourself, you’ll be able to generate more income and be more successful in letting your property. This is because you will be giving the project your undivided attention, unlike most management companies who have a large number of clients on their books and generally charge a fairly hefty rate of commission.

Nevertheless, a decent company will be able to take care of the marketing, maintenance, client liaison and booking of the property, and deal with all the bureaucracy and red tape that might come with the territory, making them value for money if they are good at their job. While most will be able to generate a large number of rentals during peak season, you need to be aware that they will have a number of clients on their books, so you won’t get priority treatment. Also, don’t take promises of year-round bookings and hefty yearly yields too seriously, as in reality, this is unlikely to happen.

Costs vary, although you are normally looking at up to 20% of your earnings. Make sure you tie them down on their promises and get guarantees about the number of weeks and level of income to expect. Finding a decent company isn’t always easy, although your estate agent should be able to recommend someone to you, and word of mouth recommendations are always a good starting point. Note that if you are going to be living in the UK, it may well pay to have someone based in the same country as you, to avoid being ripped-off and to make communication easier.

LEGAL ISSUES

If you intend to let your property then the best starting point is to ensure you notify the authorities in the relevant country that you will be doing so. You should also brush up on local tenancy laws; these vary from country to country, but you will still be required to meet certain safety standards, so take legal advice.

Generally speaking, you will be taxed on your rental income in the country where the income was earned, i.e. the country where your rental property is located. This will generally be charged at the going income tax rate (see Chapter 3 for more details on tax), which will be lower than the UK rate. You will not be liable for taxation in the UK on rental income if there is a double taxation treaty in place with the UK and you pay tax in the country where your rental property is situated.

THE PROS AND CONS OF RENTING

Pros

• You can make money to cover repayments.
• Your home will be occupied and cared for during your absence.
• You can employ a holiday letting company to do the hard work and marketing for you.
• You have secured a nest egg for the future.
• The Eastern European markets are constantly growing, fuelled by media interest and EU membership. Tourist boards are reporting massive growth, with Bulgaria alone reporting a 42% increase in the number of British holiday-makers in 2005.

Cons

• You may find that you cannot spend time in your home during peak or summer seasons as that’s when you experience the most demand and make most money.
• You will need to employ the services of a maintenance and cleaning firm which can sap your income.
• You will need to look into tenancy legislation and the health and safety standards demanded by law.

• Furnishings and facilities will need to be provided.
• The garden will need to be tended.
• If something breaks or there are problems, then you may not be in the country to deal with them.