Rising property values worldwide have encouraged many people to invest in holiday apartments and villas in the hope that the rental income will cover the purchase and maintenance costs resulting in a mortgage-free property that will provide a good income during retirement. Is this just a dream, or is it a sound business plan?

If your property is in a popular area, especially one that attracts visitors all year rather than just the summer months; then the rental income should cover the costs of the mortgage and the maintenance of the property. So the basic business plan is viable. The next question is should you employ an agent to manage the property if you do not live nearby? The experience of many absentee owners in Spain suggests not.

Alarming reports in the papers about agents omitting to tell owners when their properties have been let and pocketing the money suggest that, unless you have some way of keeping tabs on agents, it would be advisable to take time to manage bookings yourself.

There is a way around the problem. The internet offers many sites where you can advertise your apartment or villa and most provide an availability calendar and a booking form. By advertising on-line you can take control of bookings and handle your business yourself, saving the 20% of rental income charged by most rental agencies along the way. All it takes is a little time and effort.

The secret of success is to make yourself available at all times. If someone wishes to discuss a booking they have to be able to contact you either by telephone or email, and you need to respond with little delay. Keep a potential customer waiting too long and he will take his business elsewhere. It will also save you time if you keep your availability calendar updated. If a customer contacts you wishing to book dates that the calendar shows are available but that are already booked, your time is wasted and, more importantly, the customer is annoyed and probably less likely to accept alternative dates.

Another vital task is to ensure the villa is cleaned between bookings. Fortunately there are many small companies or individuals who will provide this service, and some will also meet your tenants to hand over the keys to the villa.

Despite the drawbacks, some villa owners will not be able to spare the time to manage their business and will be forced to use an agency. The challenge then is to find a good one. Ask for recommendations from other clients and make sure you check them. Scrutinize the rental agreement carefully to ensure it is clear what the agents are required to do.

A useful tactic is to pay the utility bills yourself rather than leaving this task to the managing agents. Then you will be able to see if electricity has been used - if it has then someone has been living in the property and you are owed rent.

If you treat your holiday villa like a business there is no reason why it should not be self-financing, and provide a foundation for a portfolio of holiday rental properties.