Pick a popular destination, sort out the finances and you'll never have to pay for holidays again. Follow these simple steps to start making money from a holiday home.

A nice little earner in a sunny place is a tempting alternative to the derisory interest banks pay on savings—and you can rake in more than the rent. UK residents can claim tax allowances for holiday lets anywhere in the EU, so a Grecian villa or Paris flat is as eligible as a cottage in Cornwall. There are even tax breaks for caravans on holiday sites.

For maximum returns, look for a property with a pool or by the sea, in the mountains, or near a lively city. According to holiday website ownersdirect.co.uk, Tenerife, Majorca, Portugal and Barcelona are the most sought-after destinations, with St Ives in Cornwall topping the UK charts. If you need a mortgage, make sure a week’s peak-season rent will cover a month’s repayments. There are 12 prime weeks from June to September, so that should do nicely.

If your bolthole is classed as a furnished holiday let, you can set capital costs against profits. To qualify, the property has to be available to rent for 210 days a year and let for 105 at the market rate, for up to a month at a time. Too much hassle? Then let it out in the usual way and claim for renewals and repairs.

You’ll also need to factor in management fees of up to 20% of the rent, unless you want to deal with tenants yourself. But you could save on marketing by advertising on Owners Direct (£149 for six months) and making your own Facebook page and website (promotemyplace.com, £69 pa). Then cross your fingers and hope that the bookings roll in, so you can holiday for free.

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