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My starting point

We’ve been doing pretty well with our houses 3 and 4 Clifton in Youghal on the south coast of Ireland. But I want to double my rental income. So lets look at where we are today, the truth behind the scenes.

Our Properties
My wife and I own two Victorian townhouses in a small seaside town in southern Ireland called Youghal. It’s a lovely town, and very historic too, in an amazing setting but not as famous as some others in County Cork – not today anyway. In Victorian times Youghal was at the end of the railway line from nearby Cork City, and it was the fashionable seaside town for the whole area. Our two houses were built in that era around about 1880, along the promenade with fantastic views out to sea and along the river Blackwater. When we happened upon 3 and 4 Clifton in late 1990’s they were a sorry sight and by some madness we took them on and over 6 years we gutted them and totally restored them.

Both 3 and 4 Clifton can sleep 8 people (plus an infant in a cot). They are both 4 bedroom, 3 bathroom town houses spread over 3 main floors, with two large public rooms (the kitchen/diner and lounge) which both face out to the sea. Our guests always remark about the views and from the window seats in these rooms. The houses share a large terrace with the same stunning views.

I indented this next section as it sounds like an advertorial for 3 and 4 Clifton, and that’s not the point of this post. But do read it, I am sure it will be useful background information for what I say and do later on in my challenge.
The town of Youghal is very historic, as I have said, previous residents include Sir Walter Raleigh, who was the Major, and also Oliver Cromwell too who (infamously) liked little else of Ireland. Along with its ancient town walls and clock tower, which straddles the main street, Youghal has always been lovely a harbour, and still today its a base for local fishermen and sailors. Youghal is also the location where the 1956 classic film Moby Dick was filmed. For several months that year Gregory Peck and John Huston were based here with all the other stars, and much of the town is as it was then. Youghal is now a seaside resort with miles of beaches right next to the promenade and is also well placed to reach anywhere else on the south coast of Ireland as we’re on the main road and and right in the centre.

Our guests
Our guests are usually families. The arrangement of the rooms suits families as we have two double rooms (for parents and grandparents), 1 twin room and a small bunk bedroom which is really designed for kids. Its normal for our  guests to be a family and span 3 generations. That’s not to say we don’t have other guests, couples, groups of friends etc. but they are in the minority.

Our guests are usually professionals, or at least those who are prepared to pay for the quality and standard of our houses. Ireland is full of economy rentals and dated houses, we are not like those at all.

Our guests often (usually) have a link to Ireland. They may be from Ireland, but more often than not they are from the UK or maybe the USA or elsewhere. One of their number is usually from the Cork area or has family history linking them to the south or Ireland. Again we get groups/families visiting Ireland for the first time but these would be less than 10% I think.

NB: As I am writing this is am ever more conscious that I am not drawing upon any empirical sources here. I have not judiciously recorded any data but I am recalling conversations. There is no real substitute for data and I’ll need to get a lot better in enticing guests to tell me much more about themselves and why they chose to come here!

Our booking seasons
Our ‘season’, or peak occupancy time is in the Summer June, July and August. We are a seaside resort in a temperate country so there is no surprise in that. But I can be much more specific than that. Our absolute peak season is in the schools summer holidays, and to be even more specific the UK schools summer holidays.

The UK schools summer holidays are a 6 week maelstrom where most of 60 million inhabitants must find their slice of heaven for 2 weeks with the kids. Demand is highest then, failure to be booked in these weeks is a real problem. Even though we are not in the UK the influx of UK holidaymakers swamps all others in this period and Irish Tourism relies upon it. For those who’ve never tried it I will also explain that if you are setting off from a northern UK city (lets say Manchester) for an popular English resort in Cornwall during peak season, you might find that traffic infused journey will take longer than the ride across Wales, a ferry to Dublin, and an empty motorway ride to Youghal.

NB: Another note to myself.  I know that this is true. We are easier to get to than Cornwall for someone from northern England, and massively less expensive. I should do something with that insight when I get to marketing.

Our peak season is therefore late July until the last week of August. June and early July are also holiday season as the Irish schoolkids are on holiday, but they are less of a target for us. There seems to be a (here I go again … having an opinion; where is the data?) bias is Ireland against renting an older property. Older in Ireland means dilapidated and so Irish guests seem to prefer new purpose built property. And professions in Ireland will travel elsewhere during the summer season usually abroad. Our Irish guests tend to be here out of peak season.

Rental Rates
Our rental rates are not set by the local tourism board , but by ourselves, we are free to compete. But competition has been fierce. It’s well known that the Irish economy almost collapsed just a few years ago, and the property bubble burst. For our first year we were renting our houses out at a peak rate of €1,400 or £1,000 per week. After the crash, and since, we had to slash rates to just €1,000 or £800 per week. Contrast that with the £2,000 you’d pay peak season in Cornwall!

Competition has been particularly fierce here as so many brand new holiday homes were built in Ireland, for nest egg investors who like new builds. Those owners, saddled with rising mortgages, fought for income at any cost driving rental rates through the floor. Of course the inevitable has happened, many of those holiday homes have been sold at cut down rates – they are now the economy housing of young buyers and long term renters. What was once a holiday village is now part holiday makers, part housing estate. Locally there are at least two Apartment complexes built as holiday lets, both have 40 plus apartments, and yet both are now almost entirely long term lets for young workers. It has taken fortitude and courage to carry on, and also another line of income. Many owners have not had that and houses have been left in mothballs, or put up for sale, delapidating all the while.

After 4 years of this slump there are signs of recovery. The UK economy is growing and that affect us. The quantity of holiday rental housing stock in Ireland has shrunk, and quality is hard to find.

 I am tempted to tell the tale of an appalling 4 star holiday home complex in Kenmare we stayed at… it brings shudders to think of it; maybe in another post.

We have never stopped investing in marketing, reinvesting and maintaining the houses. We are in a great position to move ahead with less competition. As I said before, this all started when I realised we have already sold most of our peak weeks for next year 2016. We did that more than a year ahead. So competition must have diminished and maybe our prices are too low now.

Online Booking
I am planning a complete review of my booking systems and of all the ones that I could and should use, a side by side comparison. Look out for this soon.
We have our own website for 3 and 4 Clifton and during the last few years I have had to drive people there to get business. Our own website has its own booking system which is linked to Rental Systems or Clickstay as they are now called. This company started out as Villarenters and I met with them in early 2002 and introduced it to people here. At the time its was the very best booking system that could be integrated into my own website and also would bring me bookings too. I remain a fan of their booking system – it works and its powerful – but they no longer generate bookings for me.

Two years ago I also began listing on HolidayLettings.co.uk and although I think their booking system has its shortcomings, and their are some features I hate (see the review soon) they are bringing in customers 😉

At around the same time I also listed with Flipkey to attract US customers. Now it appears that both  HolidayLettings.co.uk and Flipkey are part of Tripadvisor. So it seems I am doubling up with one company. I think this will need rationalisation. But Flipkey too has bought some bookings, from the USA.

This year I have dabbled with Booking.com and gone live on AirBnB, this has also bought some immediate bookings. But again the booking system and setup are not as sophisticated as I would prefer.

Other Marketing
I have spent a lot with Adwords and Facebook ads and other online ad systems. My experience is that these can work, but only in very targeted ways. I’ve considerable experience with online advertising and  have found that it’s incredibly easy to burn through your budget, get lots of click-throughs and still not get any bookings –  see more on how to avoid this in a later blog, when I get to online marketing.

My Income
Well my objective is to double my Income. I will define my income as my total revenue less my revenue costs. And by revenue costs I mean the things that I had to pay to get that weekly revenue, like cleaning, laundry, electricity and marketing etc; but not including my mortgage or building insurance – these I would have to pay whether the house was empty or full. And I won’t include furniture and fittings either, but will include the consumable items and furnishings (linens, towels, pillows, cushions etc) – these are marginal costs I need to spend to keep standards high. Ha! I am literally making up rules as I go along!

So my total Revenue for 2015 will be – €18,000 and my Objective is to Double that figure in 2017!

 


 

Video Transcript for those with text readers.

“Welcome to my challenge to Double the Rental Income from my holiday homes. Hi my name’s Martin Finn and welcome again to my challenge. As you may know I’m attempting Double the Rental Income we get my holiday homes, but I want to explain what I really mean by that challenge and what I’m attempting to do. But let me start first of all with our holiday homes. Here is a picture of our website as it currently stands in October 2015. Our holiday homes are called 3 and 4 Clifton so 3and4clifton.com is the web address if you want to go and check yourself. As you’ll see we have two Victorian houses that are about a hundred and forty years old and when my wife and I bought them they were pretty wrecked. We have had them refurbished totally so that they retain their Victorian character but really they are now  luxurious four-bedroom homes inside. And we’re very much we are aiming for Holiday Homes; we’re looking for guests who want a home from home. They’re right by the sea , in fact they overlook the bay and that picture you see there from the lighthouse is just across the road from the two houses. So they’re right on the promenade in this small resort town of YOUGHAL on the south coast of Ireland. They’re really lovely houses, we spent a lot on them and we expect them to give us a good return and ultimately we look forward to re-selling them on so they can fund our retirement. This is, if you want, my wife a I’s nest egg for the future; so it’s really important we make the best of them. Now, in terms of revenue, we started out fantastically in 2007. The blue line is for 3 Clifton, we didn’t actually get 4 Clifton done up until 2011. however between 2007 and 2011 well we all know that all wide markets crashed, and that had a dramatic effect on the property markets in Ireland and indeed on the holiday markets too. So by 2010 our revenues it crashed and, in fact, it didn’t matter how much reduced our rental rate we couldn’t fill houses for the full summer holiday season. It was just at that time that No. 4 Clifton came online, so it’s been really quite a battle to get back, through these really challenging years, to get back the revenues to where they are now and 2015. We now have two houses there are available they are both fantastic and whilst we’re not back into the boom years that we were before. Of course not! I actually see that there’s a major opportunity for us to go back revise our rates and really challenge to drive forward. That’s why I’ve chosen this time, now, to Double our Rental Income. And what’s the size of the prize? Well pretty obviously if we double our income we can have twice as much money. The green line that you see how much money EXTRA we will have; and obviously that’s cumulative so each year the we doubled our rental income the cumulative amount of the green line goes up and up and up as fantastic extra money. And it’s gonna be really useful to us because we’ve got kids that are going to go to university soon. So the Green Line is really important we gonna look forward to the doubling of our incomes. But what’s the red line? Well that’s an interesting point because you see the thing is right now the valuation of all properties based purely on property prices. It may go up and down. Who knows when the property prices will go back to the peak. I can’t tell that, nobody can. What I can tell you, though, is that if we if I double our rental income and get it to where it can be, then actually that rental income of its own right becomes a business and it adds to the valuation of our property. Now how much its adds? that’s also up for negotiation but certainly its there. So not only will we get double the rental income and enjoy that income as it comes we’re actually increase in the valuation of our property. We’re turning our rental homes into a real business. That’s what I’m looking to do. However there are some rules to guide me because I know there are some shortcuts that people think we might want to take. First of all our aim is to Double our income – that’s how much WE have left after we pay for everything else. So simply doubling rental income and then paying loads of money for advertising is of no use to us. I want to return double the amount of money we have left over. And I am going to share everything. Now that’s quite a strange thing. People would say why would you share all these winning tips. Well the simple fact on that is I don’t see that there’s a limit on sharing success. If you follow me and succeed that doesn’t punish me in any way, far from it! I’ll get a kick out of it and your feedback is going to help me to succeed more. I actually think the success is infinite it’s not limited. I’m gonna be unbiased. I know that there are other sites out there which offer advice to holiday home owners like myself, and maybe like you, but those other sites out there typically come from an angle; they want to sell you something. I don’t think I have nothing to sell here. All I am offering is unbiased advice. So if I say I don’t like something it’s because I don’t like it; it’s not because someone has given me permission to say something else. I will be reviewing lots of different services, particularly when it comes to the online booking engines; there’s lots of them out there and some of them cost considerable amounts of money –  are they worth it? My reviews are going to be completely unbiased. I’m going to stay legal and open. Some people will expect me to find some fantastic ways of not paying taxes or licensees or whatever. I’m not going to do any of that. I personally believe that we should all be paying no taxes anyway, no matter how unpalatable they are. But actually there’s a much more practical reason why I want to stay completely open book with everything we’re doing. And that is back to that thing of wanting to sell the business. If I want to add to the valuation of our property by having a business to sell, that business has to be open book and legal. So we will not have, and I wont be promoting any kind of tax schemes or anything else that I think is in anyway dubious. And I am going to be open to my guests too. If any of my guests, or potential guests come onto this site and read about what I’m doing I’m not be embarrassed by anything I’m saying. I want them to know just how hard I thought about making the perfect holiday home just for them. All of this is so that one day my wife when I could drift around the Mediterranean on a big yacht – that’s our plan and our dream! Thank you. I hope you enjoyed that episode a double my rental income and I really hope you’ll join me again don’t forget you can find out much more about my challenge and how it’s progressing by visiting the website www double my rental income . com and you can sign up on the website to to get the very latest news and some extra special content which I can’t make available elsewhere. So please join me again and remember it is has been valuable to you I’m giving it to you for free but I do make a request. Share it with others let them know too I want as many people as possible to start using some of the things that I have spent so long finding out about. Thank you”

Go on, share the joy!
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