Hideaways: vacation properties as an investment

However, not all properties are suitable for renting out or as an investment, and not all regions allow for continuous rental. And a property purchase alone does not guarantee a vacation home that is ready to let immediately or is fully booked throughout. Furnishings, living comfort, the correct target group approach and marketing, repairs, cleaning and guest care all need to be carefully considered. However, if set up and managed correctly, a vacation property is a financial investment with great potential due to the strong demand.

If you are already thinking about investing in your own vacation property but don't know how to organize it, the Hideaways - Ferienhäuser im Norden agency can help. The company specializes in renting out special vacation homes and takes care of everything for its customers, from purchase advice and furnishing to marketing and management.

The two founders and managing directors, Johanna Lutteroth and Alexandra v. Hobe-Gelting, have spent several years building, developing and marketing their own vacation homes. Since 2020, the two experts have been offering their customers an "all-round carefree package" consisting of sound advice, detailed planning and professional service with Hideaways.

We met Johanna Lutteroth for an interview about the idea and concept behind Hideaways and talked about what needs to be considered when buying and renting out a vacation property

Engel & Völkers Schleswig-Holstein:

Dear Ms. Lutteroth, let's start with the question of what exactly makes a good vacation property. Is the motto "location, location, location" also true here or are other factors now more decisive?

Johanna Lutteroth:

The location is also decisive for the rental success of vacation properties. However, different factors play a role in assessing the quality of the location. Many customers are looking for proximity to water. It should be possible to reach the sea or a lake by bike - but even better on foot. For others, the infrastructure in the immediate vicinity is important: are there good restaurants, what are the shopping facilities like, what leisure activities are there? And then there are the absolute nature lovers who are looking for peace and quiet in the seclusion of the countryside. Ideally, the vacation property should combine all three factors. The property should fulfill at least one criterion.

Engel & Völkers Schleswig-Holstein:

From your point of view, what do interested property buyers need to consider above all else if they are toying with the idea of investing in a vacation home?

Johanna Lutteroth:

The most important thing is that they themselves are enthusiastic about the property and that the location is right. Everything else can be arranged.

Engel & Völkers Schleswig-Holstein:

Feel free to tell us more about the concept behind Hideaways. How did you come up with the idea and what tasks do you take on for your clients?

Johanna Lutteroth:

We bought our farm 10 years ago from the community of heirs of my husband's family. My youngest son asked me at the time what I wanted with this pile of scrap metal I didn't really know at the time. I just knew that it would be a shame to let it all fall into disrepair. And so we started renovating one house after the other and furnishing it with things from our families. We approached the market rather tentatively and were surprised by our own success. We had struck a nerve. In terms of figures, this was reflected in a positive cash flow. We were able to cover loans, wages and the operating costs for the entire farm from the rental income. We hadn't expected that.

That's why we bought a few more cottages, renovated them and included them in the rental. In addition, we can now benefit from the economies of scale that the growing number of units brings.

In the meantime, we have gained so much experience and built up functioning structures that we have also started to offer our expertise as a service. in 2021, we furnished our first third-party home and put it on the market. That also worked very well. We started letting in May and still managed 195 rental days for the year - and a gross turnover of 40,000 euros.

The last few years have shown us that In the right location, vacation properties can actually generate attractive returns.

Engel & Völkers Schleswig-Holstein:

What makes your service stand out?

Johanna Lutteroth:

We offer every service from furnishing to marketing and managing the vacation home. Ultimately, you can book the "all-round carefree" package with us. We take care of everything concerning the vacation home. We can offer helpful support, especially for those who have never dealt with the subject before. Let's take the example of furnishings: What should be included in a vacation home? Which products are suitable and which are not? The wastage of cutlery, for example, is considerable. It is therefore important to have a range that can be reliably reordered. The same applies to sofas and armchairs: which covers are easy to wash and put back on?

What's more, the owner doesn't have to worry about marketing. We have the technical infrastructure that allows us to put the property on the market within a day. The owner does not need their own website, as we present the property individually on our site and can also transfer it to the usual portals.

What sets us apart from others is that we already have a solvent clientele for individual, high-quality vacation homes who regularly visit the site and also regularly book with us. We support this with active social media marketing and by collaborating with special interest blogs such as Pretty Hotels and Good Travel, which also specifically address our target group.

Engel & Völkers Schleswig-Holstein:

Many people hesitate to make their own home available to strangers because they have to give up too much privacy to do so. What experiences have you had?

Johanna Lutteroth:

Of course it's a strange feeling at first when strangers live in your own home. There's no denying that. But over time, you get used to it and primarily see the advantages. Ultimately, it's not good for houses to be empty. By renting them out, they remain continuously used and heated. The house and garden are looked after much more meticulously because they are constantly rented out. Every time beds are changed, the house is turned upside down. Things that break are repaired immediately. Everything must always be in top condition.

As the owner, you arrive at the freshly cleaned house with the beds made - and can leave without having to worry about what happens afterwards.

Engel & Völkers Schleswig-Holstein:

Which regions do your customers come from? Would you confirm that demand has increased during the pandemic?

Johanna Lutteroth:

Our clients mainly come from Berlin, Hamburg, Lower Saxony and North Rhine-Westphalia. It is undoubtedly true that the pandemic has given our business a strong boost. However, we have seen an increase in inquiries every year since 2015. I would say that, as in so many other areas, the pandemic has only acted as an accelerator of an already existing trend.

Engel & Völkers Schleswig-Holstein:

To get really specific: Can you make a calculation for our readers - perhaps using an example - to make the vacation property project more tangible?

Johanna Lutteroth:

Of course, the costs always depend on the condition of the property. In our experience, the more disastrous the condition, the better. Since you assume the worst anyway, there are no nasty surprises in the disastrous case. For a high-quality, but not overly expensive renovation of a dilapidated thatched cottage, you should calculate between 3000 and 4500 euros gross per square meter for the renovation. Unfortunately, building costs have risen significantly every year in recent years.

Very important: The outdoor facilities should definitely be included in the calculation! They are usually forgotten.

The interior furnishings of a 100 square meter house will cost around 25,000 euros for a medium-sized home. Of course, there are no upper limits. If we take over the furnishing, our fee is of course added to this.

And we cover the start of marketing through our commission. There are no extra costs.

Engel & Völkers Schleswig-Holstein:

People immediately feel at home in your vacation homes. What is your secret, what do you pay particular attention to when furnishing?

Johanna Lutteroth:

We work a lot with antique furniture, with old crockery, with pictures. Much of what we use would be considered terribly ugly, old-fashioned or stuffy on its own. But when combined with more modern furniture or the right "passer", it looks good. A little patina is usually a good thing. The materials used are also important. Real wood on the floor and windows, high-quality fabrics and the like give the rooms a lot of warmth. You can be a little more modest when it comes to the TV, or go for an Ikea detail here and there. The important thing is that the customer recognizes that they are living in something unique that will never be seen again.

Engel & Völkers Schleswig-Holstein:

In addition to hideaways, you also market your own properties, such as Ostseehof Langfeld on Geltinger Bucht. What's next for you, are there already new projects in the pipeline?

Johanna Lutteroth:

We are not actively looking, but we always keep our eyes open.

Engel & Völkers Schleswig-Holstein:

Finally, a personal question: you live with your family in Hamburg, but you also spend a lot of time in the land between the Schlei and the Baltic Sea in your private life. What makes this region so special for you?

Johanna Lutteroth:

It's the light. Angeln has a very special light, which is particularly noticeable to artists and photographers. It has a special warmth and clarity.

Engel & Völkers Schleswig-Holstein:

Ms. Lutteroth, thank you very much for the interview and the insights into your work!