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Buying a holiday home can be a dream come true. But it can be an expensive dream. As well as the purchase, renovation and decoration costs,  there are running costs to consider.

If you have decided to rent their are many things to consider. There are some pitfalls that you can avoid if you go about the process in a professional manner.

A. Preparation
As with most projects, good preparation is the key to success.

1. Deciding on your financial objectives

There are some fundamental questions you need to ask yourself before you go ahead with letting your home:
What are your financial objectives? Are they realistic ?
Do you want to maximise the income from your property or just cover the costs.How often do you want to be there yourself?
Do you want to be there on certain set dates, or can you be flexible and only go on weeks when there are no bookings. Do you want to be there in the peak, summer holiday times (when the rates are highest)
Do you understand the letting rules and contractual obligations in Croatia and how they relate to your ownership
What type of guest do you want to stay in your home?
Are you happy to have children and or pets (and is your holiday home suitable?)You may have to make some compromises, but you should be clear in advance where you stand on these issues, as many other decisions flow from them.

 

2. Furnishing and equipping your home

Furnish your home bearing in mind that it will be rented out. Use good quality, robust furniture and equipment that can be easily cleaned and will not be high maintenance. Keep glass at a minimum. The rental rates you can charge will reflect the standard of your furnishing and equipment. Accept that things may get broken, as they do in your main home, so don’t put in items that you will fret over if they do get broken. Their is normal wear and tera nd then items that security deposit cover.

Kitchens: These must be fully equipped. A dishwasher is essential these days, as no one wants to wash up on holiday. A microwave, a washing machine these are expected. Cutlery, glass, crockery and kitchen utensils are not expensive, so don’t stint them – allow for at least double the maximum number that will stay. Make sure that pans, coffee pots and tea pots are big enough. Worktops should be easy to keep clean.
Bedrooms: Beds and sofabeds must be good quality and comfortable, there should be bedside tables and lamps, at least one hairdryer and ample hanging and storage space, with good quality clothes hangers. Spend a night in each bedroom to check it out for yourself so it is practical, or listen to your managers advice, they know.
Linens: Make sure you have at least two sets of linen for every bed, to allow for same day changeovers. Also, have a good supply of bathroom towels, 1 large 1 small per person, tablecloths, kitchen cloths etc.
Furniture and flooring: This should be hard wearing, low maintenance, not easily damaged and easy to clean. Wooden or tiled floors with rugs are a good idea, together with washable throws for soft furnishing. bathrooms should be tiled, or have cork floors – not carpets. Shower mats are a must
Other equipment: You need to have a balance between having enough little personal things like books, vases, and ornaments to make the place look like a home rather than a hotel room, but do not clutter it with miscellaneous rejects from your main home. Try to create an atmosphere appropriate to the location of the holiday home. do not leav lots of personal items cluttering the property.
Your personal items: Allocate a storage area or cupboard where you can store your own personal items, or things with high or sentimental value, and keep it locked when you are away. Properties must have a safe these days, it is a requirement of the categorisation process.

 

3. Preparing information packs

An inventory: This lists all the items of furniture and equipment in the property. This is needed so that if anything goes missing from the property during a rental, you have proof that it was there in the first place.it should have general cost so it can be charged to the guests appropriately
Guest manual: You should have a “Guest Manual” in the property containing lots of relevant information about the property and the area.  Remember to review and amend the guest manual from time to time, as they do get out of date. One sheet of house rules that is pinned up on a notice board in the kitchen with important instructions like rubbish disposal, noise rules if necessary and emergency services numbers. The telephone number of the local contact person should also be prominently displayed with hteir avialability hours

 

4. Administration

Good administration is essential to the smooth running of your rentals. But you should also be prepared by setting up the following:
Cost records: Make sure you keep a record and receipts for any costs related to your property so you can offset them against your income tax. Our advice is to keep receipts for any costs at all – your accountant will be able to tell you which ones you can claim!
Insurance: YOu must take out insurance. Hopefully, your building will be part of a group scheme under Croatian common management laws. The unit however, is not covered under this scheme , meaning you need  an insurance policy that includes fire and theft , building and contents and guest liability. A Croatian based insurance company will cover your needs, foreign policys that may cover you in Croatia could work out to be more expensive in the long run. We recommend Gernerali, Allianz , CRoatia Osiguranje

 

5. Setting up property management arrangements

The cleaning and maintenance of the property and dealing with the guests on the spot are vital. You must make sure you have everything arranged in advance for this key aspect of successfully letting your property. A local agency is a necessity as you must have a reception under Croatian law so your neighbour or a local friend will not suffice

Cleaning and supplies: The importance of cleaning cannot be overemphasised. It is essential that the property is thoroughly cleaned and all linen changed between every rental. It is also important to make sure that essential supplies such as toilet rolls, soap, and kitchen rolls are available when guests arrive. The kitchen store cupboard should have basics like salt, pepper, sugar and flour. And it is a nice idea to supply some fresh foods like tea, coffee, milk, fruit and bread. You can also add various little touches like fresh flowers or a bottle of local wine – anything to make your guests feel welcome. If the rental is for more than a week, it is a good idea to insist that the property is cleaned and the linen changed every week, usually at your expense, at a time that is mutually convenient. Then you can keep an eye on your property, and not have a huge cleaning job at the end of the rental.
Contacts and Maintenance: You must leave your guests with the telephone number of some one they can contact if there is a problem or an emergency. This person should also have a list with an electrician, a plumber and a general repair man who is familiar with the property, and who will be able to come at short notice to make any urgent repairs that are required during the rental.
Welcomes: You can send out keys and maps, or leave them under the mat, but it is so much better if there is some one to welcome your guests, show them round, explain how things work. It can avoid all sorts of problems and questions later. Most complaints start as questions, and if they are dealt with on the spot, they do not turn into complaints. With mobile phones guests can call about half an hour before arrival, so it is not necessary to have some one hanging around waiting all day. If you, as the owner do not meet people yourself, it’s a good idea to call and introduce yourself a day or so after your guests arrive to check that everything is going well. Or ot arrange for your manager to pop in
Goodbyes: If possible arrange for some one to be there when your guests leave, to check that no damage has been done, to check the inventory and to read gas or electricity meters if necessary and to return the deposit. This can save you considerably and your manager will usually insist that they do this to ensure a proper control

 

. Options for managing your holiday rentals

If you live nearby your rental property, you can manage all the aspects of your holiday rentals yourself. Having read the above, you should not underestimate the amount of work involved! But if you do not have the time, or the inclination, or you do not live nearby, then there are companies who can help with various aspects of your holiday rental.

1. Full service letting agency

You can use a local letting agency to handle everything for you. All you do is receive the money for your holiday rentals. Obviously the agency will charge for this – 30 – 50% of the rental income, but if you don’t have the time, or the inclination to do it yourself, this may be the best solution for you.One disadvantage is that the letting agency may insist on having the property fully available for a certain number of weeks, including the peak season, so you may not be able to use the property yourself, or pop down on the spur of the moment, (unless it happens to be free, and even then you may have to pay the letting agency the full rental fee.) So make sure you agree on the availability in advance. Also check exactly what services the agency will provide:

Will they pay to advertise the property both locally and internationally? Usually not they mostly ask for you to set a budget and market accordingly. Some will actually take the property fully over and offer you a low rate for weekly rent , this can be a good way to begin, if yo are fully aware of your costs and marketing campaign over a number of seasons. do not expect to be rich after season 1 , it can take up to 3 seasons to get a good run
Will they guarantee a minimum level of bookings? external agencies may well offer this , but in Croatia it tends not to be the norm
Will they vet potential guests to make sure they are suitable? that can not always be possible but a good agency will do their best. The ultimate goal is to have a manager who monitors your guests and helps them enjoy the property so they will return year after year
Will they inspect the property before and after each let and do an inventory inspection? managers will insist on this for everyones security
Do they welcome the guests into your property (rather than just leave the key somewhere) and explain how the various major appliances work? Most decent managers will insist to minimise potential problems
Will they organise running repairs and maintenance and provide receipts? Decent management will organise this and always attempt to find the best costed service providers who are reliable , this might mean a higher cost, but is worth it for the over all result
Are their staff on 24-hour call-out in case of emergencies? usually not, as the cost would be too high unless you have a 4 or 5 star property,but emergency services list should be in the property
What price will the agency charge clients – and what commission they plan to take?

 

Talk to other property owners in the area to see if they can recommend a good agency – or advise you which companies to avoid, (there are horror stories of letting agencies renting out the properties without the owners’ knowledge, and keeping the full payment themselves.) or etting your property illegaly without your full knowledge.

 

2. Booking agency

A booking agency will market the property for you, take the booking inquiries and organise the payments in association with your local bookeeper. This is the best solution if you do not want to take the bookings inquiries yourself. It also means you do not have to bother with foreign payments as the booking agency will simply transfer the money into any bank account you specify – less their commission, which is usually between 15% and 20%.One advantage is that the booking agency may only require availability “on request.” This means you can block off availability for yourself at any time.Make sure your contract specifies details including notification of availability, the commissions that will be taken, when deposits and full payments will be made, the cancellation policy and complaints handling procedures.

3. Property management

If a booking agency is taking your bookings, or you advertise the property and take the bookings yourself, you still need a local person or company to do the cleaning, maintenance and welcoming and be the emergency contact. Make sure they speak English, as your guests may not speak the local language.It is best to ask locally for recommendations for a reliable person or company. Again, make it very clear in advance,  with a contract, what service they will provide and to what standards. It is probably worth paying a bit over the market rates to make sure you get the best service, as this is such a key factor in the success of your holiday rental.

The process of managing your holiday rentals

This section is primarily for those who will be managing the whole rental process themselves, but even if you use a full service letting agent, you should be aware of how holiday rentals should be managed.

1. Booking calendar / availability chart

It is essential to have an efficient booking calendar and booking management, if not you could get into the nightmare of double booking! Decide on your changeover date, and stick with it, or you will be left with a series of part-weeks that you cannot rent. Or offer a flexible changeover to accomodate travellers in cars across Europea and lost cost airlines Remember that holiday rentals bookings, like hotels, are done on a nights not, days basis. If people arrive on a certain date, that night is booked, but the date they leave is not booked.If you advertise on some portals  you have access to your own availability calendar which is displayed on the site, and which you can update online. Don’t forget to block off some periods for yourself!

 

 

2. Setting up Systems

The whole process can be managed with a set of Booking Management Documents.
All these documents can be stored in your computer,  This means you can send out well organised, complete, professional documents in seconds. You just bring up the standard document, type in the relevant dates, and add a personal greeting and maybe a little specific note at the top.

 

 

3. Responding to Inquiries

It is important to respond quickly, professionally and enthusiastically to rental inquiries – especially inquiries from Internet advertising as Internet users expect quick results. As soon as you get an e-mail inquiry, send a reply with a confirmation of the availability, answer any specific questions plus the full follow-up pack with further information, booking and payment conditions, arrival times, etc.As they will be staying in your home, it is perfectly acceptable to ask a few questions about the potential guests, such as the number of people in the party, and whether there are children, and whether there is a special reason for the holiday.

 

 

4. Taking payments

A booking is confirmed when the deposit payment is received. Make sure you update your availability chart! then bank transfers are the easiest way. Yo can use paypal now in Croatia or our favourite is a moneybookers payment. PAyment must be in to your Croatian account and not your own Country account

 

 

5. Follow-up

Once you have a booking use your standard letters for all the other processes including: booking deposit received, request for balance, confirmation of booking, directions and arrival instructions, and follow-ups. It is usual to send directions to the property only after the full payment has been made for the rental.

 

 

6. Keeping records

Keep detailed records of all your rentals on a spreadsheet.  Also have a good filing system on your computer, with a separate “folder” with all the documents for each individual rental.

 

 

D. Marketing your holiday home

 

1. Deciding how much to charge

This depends on the property, its location and how well it is furnished and equipped. To get an idea of how much to charge go to internet portalsand look at the properties in your area, this will give you an idea of the going rates.Or, if there are local holiday letting agencies in the area, go and see how much they charge for a property similar to yours.

 

 

2. Print advertising

There are several options:

Newspapers: You can advertise your property in the classified sections of local or national newspapers. The cost varies from paper to paper, but it is not cheap. The disadvantage is that they only cover specific countries or areas, you can only give the briefest of details, pictures are costly or not available, and the advertising only lasts until the next issue of the paper.
Holiday magazines: There are various holiday accommodation publications where you can advertise. You can show more details, and often a colour photo. But again this can be expensive, they mainly cover one country, and once the publication is printed you cannot make changes.

 

 

 

3. Internet advertising

The Internet has revolutionised the advertising of holiday properties.

Now you can show full details of your property and

full colour photos to a truly world-wide market.

There are many sites available.

Disclaimer:
While every effort has been made to make this guide complete and accurate,  we take no responsibility for any omissions or inaccuracies. We should also point out that the laws regarding letting holiday properties vary from country to country. You should therefore check the legal and fiscal position with lawyers and accountants in the country where your holiday home is located. Your local Property Manager should be able ot assist. They charge a fee for this service.

 

 

Croatian Tourist Tax

Check whether you have been registered!

To ensure a comfortable stay and make sure you are abiding by the law, we ask you to please check whether you have been registered for the whole of your stay, from the day you arrive to the day you leave.

All those providers of accommodation services are obliged to register their guests, to possess the certificate of registration for each guest in any commercial accommodation facilities (hotels, apartment-hotels, tourist settlements, apartments, camps, boarding houses, lodgings for the night, hostels, private accommodation, marinas, etc.) and to present the same at the request of the guest.

Checking this is important and necessary particularly if you are staying in private accommodation so as to facilitate quality service, insure your personal safety and to disable illegal operation of those hosts who are not registered to offer accommodation.

In the event you are staying outside of commercial accommodation facilities, you are obliged to carry out the registration yourself within 24 hours at the nearest police station!

We thank you for your cooperation and wish you an enjoyable stay.

Greetings from your Croatian National Tourist Board.

Excerpt from the TOURIST TAX ACT (“Narodne novine”, The Official Gazette of the Republic of Croatia, 35/95; 52/95; 64/00)

Article 1.
The citizen using the service of overnight accommodation outside of his residence in an accommodation facility in which catering or tourist activity is performed (hereinafter: the accommodation facility), pays the tourist tax. In the sense of this Act, an accommodation facility implies: a hotel, boarding house, motel, tourist apartment, vacation resort, resort for children and youth, camp trailer and vacation flat, room for rent, sanitarium, climbers’ lodging, lodging for the night, berth in a port of nautical tourism (anchorage, mooring, tourist port, marina and nautical center) and all other facilities in which services of overnight accommodation are offered to citizens.

Article 2.
The tourist tax is to be paid by the owner of the house or vacation flat in a tourist settlement and by all the persons staying in that house or flat. Persons from Paragraph 1 of this Article pay the tourist tax when they stay in a house or vacation flat in a tourist settlement in the period from 15th June to 15th September. The tourist tax is also paid by the owner of the vessel situated in a berth in a port of nautical tourism when he stays aboard, and by all the persons staying aboard that vessel. The house or vacation flat from Paragraph 1 of this Article implies all buildings or flats used seasonally or temporarily. Vacation homes, in the sense of this Act, do not imply outbuildings serving for the storage of agricultural machines, tools and similar.

Article 3.
The tourist tax is not paid by:
1. children under age twelve,
2. blind and deaf persons and persons with disabilities,
3. participants of school trips organized by a school institution,
4. persons sent to a sanitarium for medical treatment by a health institution,
5. many-year permanent guests in a tourist settlement having contributed to the improvement of tourism, at the proposal by a local committee, and according to a special decision by the Tourist Board Council,
6. members of the Ministry of the Interior and the Ministry of Defense, when they stay in an accommodation facility while performing official duties,
7. seasonal workers with registered stay in a tourist settlement,
8. passengers on a passenger ship in international navigation when the ship is anchored or moored in a port,
9. owners of an original old family home, acquired by inheritance from a person with permanent residence in the tourist settlement and members of his immediate family when they stay in such home.

Article 4.
Persons from 12 to 18 years of age pay the tourist tax reduced by 50%.

Article 5.
The owner from Article 2, Paragraph 1 of this Act and members of his immediate family pay the tourist tax reduced by 70%. In the sense of this Act, members of the immediate family of the owner of a house or a vacation flat are considered to be the spouse, children, step-children, adopted children, parents and adopters.

Article 5a.
Persons staying on a vessel while it is on a permanent mooring in a port of nautical tourism pay the tourist tax in the annual flat rate. In the sense of this Act, the permanent mooring at a port of nautical tourism is a mooring in a port of nautical tourism which is used on the basis of a lease contract for the period of one year. The annual flat rate from Paragraph 1 of this Article is to be paid by the user of a permanent mooring in a port of nautical tourism in a one-time amount for all the persons staying aboard the vessel. The amount of the annual flat rate of the tourist tax for users of a permanent mooring in a port of nautical tourism is established by the Government of the Republic of Croatia at the proposal by the Minister of Tourism.

Article 5b.
The legal and physical person providing the service of a permanent mooring in a port of nautical tourism is obliged to submit all information regarding concluded lease contracts of permanent moorings in a port of nautical tourism to the tourist board of the municipality, town or settlement, including the registration number of the vessel, the name and the surname and the citizen’s PIN or the passport number of the owner of the vessel no later than 31st May of the current year. The legal and physical person from Paragraph 1 of this Article is obliged to report to tourist boards from Paragraph 1 of this Article any change of the information regarding the lease contract of a permanent mooring in a port of nautical tourism, and every new lease contract of a permanent mooring at least within 15 days from the date of the change, i.e. from the date of conclusion of the contract.

Article 6.
The tourist tax is paid for each realized overnight stay, unless stipulated differently by this Act. The tourist tax is also to be paid under the same conditions by foreign citizens. Provisions from Articles 5 and 12 of this Act do not apply to foreign citizens.

Article 7.
Persons from Article 3, Items 1, 2, 3, 4, 6, 7, 8 and 9 of this Act may prove the right to exemption from payment of the tourist tax, and persons from Articles 4 and 5 prove the right to payment of the reduced amount of the tourist tax by displaying certificates from corresponding institutes, medical certificates and similar documents, or the membership card of an association of citizens.

Article 8.
The amount of the tourist tax is determined by the Government of the Republic of Croatia on a proposal by the Minister of Tourism in the first half of the current year for the next year. The period of the main tourist season, pre-season and post-season in tourist settlements will be determined by the Minister of Tourism on a proposal by the county Assembly.

Article 11.
Legal and physical persons providing the service of overnight stay in accommodation facilities shall collect the tourist tax together with collection for the provided service. “Exceptionally from the provisions from Paragraph 1 of this Article, legal and physical persons providing a mooring in a port of nautical tourism on lease shall issue the invoice for the tourist tax in the flat rate together with the invoice for payment of the rent for a permanent mooring.” In the invoice for rendered services from Paragraph 1 of this Article, the amount of the collected tourist tax is stated separately, and, in the case from Article 3 of this Act, the basis for exemption from payment is to be stated, while, in cases from Article 4 and 5 of this Act, the basis for payment of the reduced amount of the tourist tax is also to be stated.

Article 14.
Legal and physical persons providing the service of overnight stay in an accommodation facility are obliged to register with the tourist board of the municipality, town or their branch offices, or with the tourist board of the settlement all the persons to which the service of overnight stay in an accommodation facility is provided within 24 hours, and to register their departure within 24 hours. “Exceptionally from Paragraph 1 of this Article, legal and physical persons providing the service of a permanent mooring in a port of nautical tourism are not obliged to register the stay of persons which stay aboard the vessel while it is on a permanent mooring in the port of nautical tourism.” Owners from Article 2 of this Act are obliged to register with the tourist board of the municipality, town or their branch offices, or to the tourist board of the settlement their stay or stay of all other persons, and to register their departure. The owner from Article 2, Paragraph 1 of this Act is obliged to report the stay of persons only in the period from 15th June to 15th September.

Excerpt from MOVEMENT AND STAY OF FOREIGN PERSONS ACT (“Narodne novine”, The Official Gazette of the Republic of Croatia, 53/91, 22/92)

Article 1.
In the sense of this Act, a foreign person implies a person which is not a Croatian citizen.

Article 61.
Legal and physical persons providing the service of accommodation to foreign persons, as well as persons to whom foreign persons visit are obliged to register the stay of foreign persons within 12 hours from the moment of provision of the accommodation service, i.e. from the moment of the arrival of a foreign person. The foreign person not using the accommodation services from Paragraph 1 of this Article is obliged to register the stay within 24 hours from entering into the Republic of Croatia, i.e. to register the stay and the change of the address of the flat within 24 hours from the change of residence, i.e. from the moment of changing the address of the flat in the place of residence. The stay of foreign persons can also be registered through tourist, i.e. travel agencies.

Foreigners entering into the Republic of Croatia by foreign vessel for the purposes of leisure or sport, and whose accommodation is upon the same vessel must register their stay in the harbour, or docking area where border control will be conducted upon entry into the Republic of Croatia. In such cases, requests for registering and cancelling the sojourn and residence of foreigners (form 8a) are submitted to the body authorized for conducting border controls (Article 27 of the Regulations).

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