Holiday-let running costs are often the difference between a promising property and a weak investment. Gross revenue is visible and exciting; costs are quieter, more fragmented and easier to underestimate. Before buying, build a cost checklist and enter each assumption into a calculator.

This guide is not a quote for any specific property. Costs vary by region, property size, guest profile, energy efficiency, management model and standards. The point is to make sure the main categories are included so your base case is not accidentally optimistic.

Booking and platform costs

Most holiday lets rely on at least one booking channel. Host fees, payment processing, channel manager fees and booking commissions can reduce revenue before you see it. If you use a traditional holiday cottage agency, the commission may be much higher than a simple platform fee but may include marketing and guest handling.

Model platform fees as a percentage of revenue. If you expect a mix of direct bookings, Airbnb, Vrbo and agency bookings, use a blended percentage rather than the lowest fee. It is better to be pleasantly surprised than to discover the base case assumed a direct-booking machine you have not built yet.

Cleaning, laundry and changeovers

Cleaning is one of the most important operating lines. It includes cleaner time, laundry, consumables, restocking, travel, damage checks and sometimes waste handling. Remote locations can be harder to staff, and larger properties can require more people on changeover day.

Guest cleaning fees may not cover the owner cost. If a platform makes a high cleaning fee unattractive to guests, the owner may absorb part of the cost through the nightly or weekly rate. Model cleaning revenue and cleaning cost separately so you can see whether cleaning is profitable, neutral or a drag on cashflow.

Utilities and services

Holiday-let utilities can be higher than long-term rental utilities because guests have little incentive to reduce use. Heating, hot water, laundry, hot tubs, EV charging, broadband and streaming services can all contribute. Older cottages and lodges with poor insulation may be especially sensitive in winter.

Include electricity, gas or oil, water, broadband, TV licences or subscriptions where relevant, waste collection and any estate services. If the property has electric heating or a spa facility, run a more cautious utility scenario before relying on a slim profit margin.

Maintenance, repairs and replacements

Short-stay properties experience frequent use. Mattresses, sofas, appliances, cookware, paintwork, flooring and outdoor furniture can wear faster than expected. A single major repair can wipe out a good month, so a maintenance reserve is a sensible modelling habit.

Many early calculators use a percentage of booking revenue, such as 5%, as a simple reserve. That will not match every year, but it gives the model a recurring allowance. For older properties, coastal homes, large gardens or luxury specifications, consider adding more.

Compliance, insurance and local charges

Holiday-let owners may need specialist insurance, fire risk assessment, gas safety checks, electrical checks, PAT testing, legionella review, planning review, licensing checks or business rates advice depending on the property and location. Requirements can change, so verify them before purchase.

Also include council tax or business rates, service charges, ground rent where applicable, estate charges, waste collection, accountancy and professional fees. These costs may feel administrative, but they can materially affect net yield, especially on lower-priced properties with modest revenue.

Frequently asked questions

What is the biggest running cost for a holiday let?

It depends on the model, but management, cleaning, utilities and maintenance are often major lines. Finance is separate from operating costs but can dominate cashflow.

Should I include a maintenance reserve?

Yes for screening. A reserve is not exact, but it avoids assuming repairs and replacements are zero.

Are business rates better than council tax?

That depends on eligibility and circumstances. Check current rules and take professional advice rather than assuming a favourable treatment.

Next step: Test your own assumptions in the free holiday-let calculator, compare scenarios with the premium spreadsheet, or use the property finder alerts when you are actively searching.