Where you fill out the room rate for each week for the Sun-Thurs room rate and Fri-Sat room rate. Then you can derive the total income expected for that week for the 5 days in the week and the 2 days in the weekend.

You should then get a total income for the year which will be a true representation of what you can expect to earn from the prospective property.

You can get the room rates by looking at rival competitor sites or simply ringing them up. They may even have a rate card for all the different dates. Periods that get above average demand and thus higher rates are:

• School Holidays
• Bank Holidays
• Event Days (like F.A Cup)
• New Year’s Eve

So make sure you do not miss them. The internet should be able to throw most dates up that correspond to your location. If you are located near an event centre like the Birmingham NEC or Earls Court then get their events diary. There will be popular events which will really push the rates up so do not miss out on those.

So once the Expected Income table is completed you should be able to derive an expected income. Then dividing the expected income by the purchase price you should be able to come up with the expected return. This expected return should be in excess of 25%.

1. Equiping the Property

This business is all about creating a home for your customers. If you love making homes then you will love this business. You customer wants to have the home from home experience. This means fully equipping the home. So as a minimum you will need:

• Beds, bedding, soft furnishing, curtains etc.
• Kitchen with hob, oven, microwave, pots and pans
• Small dining table and 2 chairs
• TV/DVD
• Cutlery & Crockery

Now what I have said above is the bare minimum. You can include the following extras to get a higher rate and encourage repeat custom:

• WiFi
• Desktop PC or Apple MAC Computer
• Full Sky Package with sports and movies
• Plasma Screen
• TV in bedroom
• Basic food like coffee, tea, milk, biscuits etc.
• Welcome pack
• Parking

And if you really want to go the whole hog you could offer the following services for a fee:

• Pick up and drop off service
• Baby sitting
• Food (breakfast, lunch & dinner) of various cuisines
• Laundry

The easiest way to offer these is to do a deal with a taxi company, restaurant and cleaning company. You could simply add their numbers to the welcome pack and the customer can deal direct with the contractor.

A word of warning: choose your contractors very carefully. IF they do a bad job the customer will hold you responsible so tread carefully. Test them out yourself. If they are reliable and of sufficient quality then consider using them. Remember there are many taxi companies, restaurants and cleaning companies so you can shop around.

It is quite a competitive industry. If you can I would book yourself in to one of these apartments on an off peak time. See how they do things. You can check:

• Where they get their goods from by looking at the brands they have bought
• What amount of equipping they actually do
• Any tricks they might use to prevent theft, increase the comfort of the customer’s stay with little cost, increase revenue or save cost.
• Chat to the competitors. They will not know who you are. Ask them directly how they do things and what they do to ensure everything runs smoothly.

The great thing about this business is that it is not rocket science. It suits a husband and wife outfit where one spouse does the booking, paperwork and finances and the other does the practical stuff like the cleaning, equipping and customer service. I will let you decide who does what!

1. Finding customers

You will get two type of business and leisure customers:

• New Customers
• Repeat Customer

The idea is to get as much repeat custom as possible. The concept is to attract new custom and keep them! The reason being is basic business sense. Once you have an established relationship you can cut back on advertising costs and the business can run on almost autopilot.

The best repeat customers are corporate customers. They won’t just book one night a year on a regular basis. Corporate customers can book your apartment for whole months or even years at a time! So the idea is to:

1. Attract new customers
2. Encourage repeat custom with all customers
3. Establish longer term relations with Corporate customers

Attracting new customers

It all starts here. Think of yourself as both now a hotel operator and a holiday home owner. You need to do what both of these outfits do. Your marketing has to be two pronged:

• Online
• Offline

Online

• Website – you need to have an online presence. Plenty of pictures of the flats, the services you offer and most importantly a booking form. If you think you will have international interest then consider having a translation of your site in their native language. You could consider having a feedback system and rating facility on the site so customers can leave feedback. Make sure you police it though as a rouge comment could kill all enquiries. See if you can get a 24 hour call centre to take your calls so you never miss a lead. Linking your website with Google Adwords will boost enquiries. To find out more consider my book “How To Make A Fortune On The Internet” which shows you how to set up a site and start making money straight away.
• Networks – there are plenty of networks which provide customers with a one stop shop to search and compare hotel rooms, holiday homes and serviced apartments. Sites such as laterooms.co.uk, holidayrentals.co.uk and ownersdirect.co.uk. Get on to these networks as they can provide most of your business.

Offline

• Mailshot Corporate Customers – HR departments of large employers need to know about you. Send a nice letter explaining about your apartment and how much better/cheaper (whatever your unique selling proposition is(USP)) and how you can work with them. Most will throw your mailshot in the bin but some will give you a call.
• Cold Call – just pick up the phone and try and speak to a Corporate Customer. These will be large employers, relocation agents and travel companies. If you apartment looks better or is cheaper or you have an interesting proposition for them (like a very nice kick back commission for every booking they make) then they just might be willing to give you a go.
• Daltons Weekly etc. – There are plenty of magazines and papers where you can advertise your apartment in the holiday sections. These can be expensive but it can work. You just have to go through the trial and error process of finding that right publication which delivers you customers.

Encouraging Repeat Custom

Now sometimes the advertising which I describe above eats up all your profit. This business model is so competitive that you have to expect that. Where your profit lies is in repeat custom.

There is no major advertising cost to get this sale apart from a bit of printing and postage.

As a minimum you must:

• Capture the contact details of anyone who has used your services. This would be name, email and postal address. Then you can remarket to them by sending them special offers to entice them back in to stay with you. You could extend this out to anyone who shows interest in your apartment. So they may not be a customer now but they will be further down the line. I capture email addresses all the time and remarket to them using emailing software to do it manually and sometimes automatically.
• Provide a welcome pack in the apartment and when they book. This will outline what you offer, the special promotions you have and how to book again as an existing customer. You should send this as an email as a pdf and have a hard copy in the flat for them to take away with them if they wish.
• For corporate customers you should phone them up and ask them what their feedback was. These are your most important customers. Address any negative feedback and if there is immediately offer them some kind of compensation like a free stay or money back. The more you can get on their good side the more they will want to use you.

Establish Longer Term Relationships With Corporate Customers

Once you have a corporate customer you must treat them like king. They have the power to make your life very comfortable. You will be surprised how thankful they are to be able to use your flat on a short term basis. Remember they are saving quite a few quid using your flat instead of a hotel and I am sure the resident is happier being in your flat than in a bland hotel room.

Thinks to consider once you have a corporate customer:

• Visit them in person. A face to face meeting can go a long way. See how you can further meet their expectations on price and quality.
• Offer them a longer term contract at a reduced price. This should help even out the cashflows over the year.
• Offer to buy more flats. If it is working and the demand is there then consider offering them more accommodation.
• Offer additional services that you do not currently offer. These could be services that you offer only your corporate customers and not to anyother type of customer.
• Don’t be shy of corporate hospitality. So at Xmas send the HR staff a few bottles of champagne.
• Offer bigger kickbacks in commission if certain sales targets are met.

Its all pretty much common business sense. Remember this is a business and not a passive property investment. Which brings me on nicely to chapter 4 “Running The Business”

1. Running The Business

A good business will:

• Maximise income
• Minimise expenditure
• And make sure income exceeds expenditure. That is being successful in business in a nutshell.

Maximising Income

• Keep abreast of the rates you can charge. Look at your competitors and see what they are charging. See if you can add additional items in the flat which result in higher rates being achievable. Everyone is looking for that edge to make their apartment stand out from the rest. Look at other apartments outside of the area and see what they are offering to get that higher rate.
• Something is better than nothing. So if you can flex your rates so they start off high and lower the later in the day it gets. This means you will get something rather than nothing. I think you should set a minimum low amount. You do not want to go too low and attract the wrong sort of customer.
• Accept multiple payment methods. So cash, cheque, credit card, paypal etc. The more methods the more likely it is to get a sale.
• Allow for multiple methods for leads to come in. So give them
• a booking form online, your direct email address, telephone, mobile, fax and even Skype! The more methods you have for them to get in contact the more leads you get.
• Get them to subscribe to your newsletter/social networking tag. So use twitter, facebook, linkedIn etc. so you can communicate with them regularly with any of your latest offers.
• Try new marketing methods. So if a new network springs up online and they are offering a free trial use it! What is the worst that can happen?
• Get kickback commission from contractors you recommend like taxi companies, laundry, restaurants etc.

I hope the above list acts as a catalyst to inspire you to get creative so that your income is maximised at all times.

Minimising Expenditure

Apart from the obvious costs such as cleaning, mortgage payments and insurance the major cost under your control is the maintenance of the contents of the flat. You really want to prevent:

• Theft
• Damage
• Excessive Wear & Tear
• Poor quality items

Theft – expensive items such as TVs and PCs can be screwed down. It can be done subtly so it does not look like a school or library and will quosh any opportunist getting any ideas of subsidising the room charge with a trip down cash converters with your TV! Expect to lose the odd towel, glass or plate every now and again.

Damage – avoid single sex groups. So a group of lads on a night on the town means coming back to your flat drunk and who knows what else. Your risks are lowered if you go for couples and families. If you are doing the check in and check out (and the customer knows that this will happen) it will mostly prevent any wrong doing. If there were any damages I would not be surprised if they come clean and tell you about it rather than being discovered whilst performing the check out.

Also if you are taking credit card payments you could ask for their credit card authorisation just in case there are any damages to the flat. Just like hotels who take your credit card details in case you decide to run up a massive bar bill or mini-bar bill you can do the same.

Excessive Wear & Tear – it is not rude to ask what the purpose of their visit is. You may get hints that what you expect the flat to be used for may be out of line with what they are thinking which could indicate that this customer may not be worth taking on. Again avoid the single sex groups and should be ok.

Poor quality items – these items will just mean the customer always calling you up reporting a fault. It does you no good in the long run. Stick to brand names and middle of the range goods.

General Advice

• Maintaining Standards – the apartment needs to be tip top clean. You expect it from a hotel and the customer will want this from you. If you are doing the cleaning yourself then no problem but if you have outsourced it make sure you perform spot checks.
• Response – you ideally want to be no longer than 15 minutes away from the flat. If there is a problem you want to be able to solve it fast. The only way you can ensure that is that you or a representative for you is there to deal with the problem there and then.
• Keeping The Neighbours Happy – even though I have mentioned this last this is so important. They can cause a lot of problems for you if you do not keep them happy. If you have a customer that disturbs your neighbours then be apologetic, even send a box of choclates to say sorry. These neighbours can be your eyes and ears which you always need in the property game as they can raise the first alarm.