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    • Voyager2002
    • By Voyager2002 6th Feb 18, 3:41 PM
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    Voyager2002
    Running a holiday cottage: do finances stack up?
    • #1
    • 6th Feb 18, 3:41 PM
    Running a holiday cottage: do finances stack up? 6th Feb 18 at 3:41 PM
    Just wondering if this kind of business would give a sensible return on an investment of more than 200,000. The property in question is close to a beach and a designated "area of outstanding natural beauty"; has one large bedroom and comes with a field that could be used for camping.

    Could anyone please point to some online resources that would indicate how this might work as a business? Or of course post about relevant ideas and experiences.
Page 1
    • elljay
    • By elljay 6th Feb 18, 4:00 PM
    • 751 Posts
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    elljay
    • #2
    • 6th Feb 18, 4:00 PM
    • #2
    • 6th Feb 18, 4:00 PM
    Everything you could possibly want to know (and more that you didn't) about the holiday cottage business can be found here: www.laymyhat.com. Especially the forum.

    It sounds lovely.

    EJ
    • enjoyyourshoes
    • By enjoyyourshoes 6th Feb 18, 4:20 PM
    • 1,034 Posts
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    enjoyyourshoes
    • #3
    • 6th Feb 18, 4:20 PM
    • #3
    • 6th Feb 18, 4:20 PM
    Check out the realism of a 'potential camping site', speak to local planner first.

    You would have to manage the camping site in person? so do you live close?

    Check out agents fees for the holiday let as they can rack up considerably, who would do the cleaning and recirculating bedding/towels etc (and what would that cost you)

    Need to factor in declaring income thus income tax etc
    Debt is a symptom, solve the problem.
    • Pennywise
    • By Pennywise 6th Feb 18, 4:47 PM
    • 9,825 Posts
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    Pennywise
    • #4
    • 6th Feb 18, 4:47 PM
    • #4
    • 6th Feb 18, 4:47 PM
    I'd worry about a one bedroom house. Whenever we look, there's a glut of one bedroomed flats/houses for holiday lets, yet a shortage of 3 bedroom ones. I'd suggest you search your proposed area to see how many there are already and you can usually see their online booking calendar to see how well booked up there are.
    • motorguy
    • By motorguy 6th Feb 18, 6:43 PM
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    motorguy
    • #5
    • 6th Feb 18, 6:43 PM
    • #5
    • 6th Feb 18, 6:43 PM
    I'd worry about a one bedroom house. Whenever we look, there's a glut of one bedroomed flats/houses for holiday lets, yet a shortage of 3 bedroom ones. I'd suggest you search your proposed area to see how many there are already and you can usually see their online booking calendar to see how well booked up there are.
    Originally posted by Pennywise
    That was what i was about to post - a one bedroom cottage would be quite limited in its appeal
    You are not special. You are not a beautiful and unique snowflake.
    • TeamPlum
    • By TeamPlum 7th Feb 18, 1:32 PM
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    TeamPlum
    • #6
    • 7th Feb 18, 1:32 PM
    • #6
    • 7th Feb 18, 1:32 PM
    That was what i was about to post - a one bedroom cottage would be quite limited in its appeal
    Originally posted by motorguy

    Not so. Finding a house/flat for a couple as opposed to a family is a nightmare.

    I've just spent a couple of weeks looking for a one bed flat for me and my wife, rather than paying for an extra room I'm not going to use.
    • scaredofdebt
    • By scaredofdebt 7th Feb 18, 2:47 PM
    • 958 Posts
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    scaredofdebt
    • #7
    • 7th Feb 18, 2:47 PM
    • #7
    • 7th Feb 18, 2:47 PM
    Not so. Finding a house/flat for a couple as opposed to a family is a nightmare.

    I've just spent a couple of weeks looking for a one bed flat for me and my wife, rather than paying for an extra room I'm not going to use.
    Originally posted by TeamPlum
    Good point - OP, if you are looking to invest over £200k then why limit the amount you can charge by having a 1 bedroom place when you might potentially get somewhere with more bedrooms for the same price, or thereabouts.

    Do some more research, are the 1 bedroom places in the area booked up, compare those to the 2, 3 etc bed places and see what the demand is like, prices charged vs the cost of buying a similar place.
    Make £2018 in 2018 Challenge - Total to date £281
    • motorguy
    • By motorguy 7th Feb 18, 3:13 PM
    • 16,187 Posts
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    motorguy
    • #8
    • 7th Feb 18, 3:13 PM
    • #8
    • 7th Feb 18, 3:13 PM
    Not so. Finding a house/flat for a couple as opposed to a family is a nightmare.

    I've just spent a couple of weeks looking for a one bed flat for me and my wife, rather than paying for an extra room I'm not going to use.
    Originally posted by TeamPlum
    You're looking at it subjectively, not objectively.

    What percentage of the market are looking only for one beds only?

    Lets say 25% - why restrict your market appeal by 75%?

    PLUS you're saying you've the expectation it will be cheaper, so not only are you restricting your market with a one bed, you're getting less rental income.
    You are not special. You are not a beautiful and unique snowflake.
    • TeamPlum
    • By TeamPlum 7th Feb 18, 7:02 PM
    • 183 Posts
    • 433 Thanks
    TeamPlum
    • #9
    • 7th Feb 18, 7:02 PM
    • #9
    • 7th Feb 18, 7:02 PM
    You're looking at it subjectively, not objectively.

    What percentage of the market are looking only for one beds only?

    Lets say 25% - why restrict your market appeal by 75%?

    PLUS you're saying you've the expectation it will be cheaper, so not only are you restricting your market with a one bed, you're getting less rental income.
    Originally posted by motorguy
    By the same token, what if 75% of the market is looking for one bed? Its not written in stone that familes are the largest area of the market.
    • 00ec25
    • By 00ec25 7th Feb 18, 7:18 PM
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    00ec25
    By the same token, what if 75% of the market is looking for one bed? Its not written in stone that familes are the largest area of the market.
    Originally posted by TeamPlum
    all one can say is generalisations since "we" have not researched OP's specific property in the context of its specific geographical market.

    - there are a very wide range of markets
    - there are businesses operating in all those markets
    - some business specialise in only one market,
    - some business cover more than one market from the same premises
    - all businesses compete, either against those already in that niche or across more than one niche by, for example, having a single couple rate for a 2 bed property. That may or may not be more expensive that a single couple rate for a 1 bed.

    pick a strata of the market, research who your customers will be and who your competitors will be.
    200,000. The property in question is close to a beach and a designated "area of outstanding natural beauty"; has one large bedroom and comes with a field that could be used for camping.
    is no where near enough info to provide anything other than vague generalisation
    • Pennywise
    • By Pennywise 7th Feb 18, 8:33 PM
    • 9,825 Posts
    • 18,116 Thanks
    Pennywise
    is no where near enough info to provide anything other than vague generalisation
    Originally posted by 00ec25
    Absolutely. And then we come to the next factor of whether to accept dogs or not, where opinions are polarised yet again, with some people saying they get more business by allowing dogs and others saying they get more by being dog-free. The OP has a lot of research to do to check out their local competition and also look at the market as a whole to see what kinds of occupancy levels are achieved by each different factor.
    • Voyager2002
    • By Voyager2002 8th Feb 18, 12:30 AM
    • 11,919 Posts
    • 8,076 Thanks
    Voyager2002
    Good point - OP, if you are looking to invest over £200k then why limit the amount you can charge by having a 1 bedroom place when you might potentially get somewhere with more bedrooms for the same price, or thereabouts.
    Originally posted by scaredofdebt
    In this case there is no choice of properties: one property has been in the family for the last 100 years, and the only way to hold on to it is to earn a sensible return on its estimated sale value.
    • DigForVictory
    • By DigForVictory 8th Feb 18, 6:38 AM
    • 7,364 Posts
    • 20,353 Thanks
    DigForVictory
    Then unless it's within a short walk, it's had all the main utilities recently overhauled & you want to take on being landlord to a bunch of short term tenants whose ideals & standards may vary from yours wildly, I recommend letting it out of the family grasp.

    You've had the benefit for 100 years - give another family a chance.

    If they make a bundle out of renting it, likely as they're running a ruthlessly commercial venture, across a handful of locations & have the greying hairs to go with, let them. It's a rough game & holidays have a load of emotional freight that "simple" tenancy doesn't.
    • Tom99
    • By Tom99 8th Feb 18, 9:17 AM
    • 1,233 Posts
    • 792 Thanks
    Tom99
    I looked into this twice over the past few years, once with a one bed flat and then with a three bed house, both literally on the shoreline.

    In both cases if you took a realistic view of the number of weeks it will be let and all the other costs, I could not get the figures to make a profit after mortgage costs. A letting agent will probably charge 20%-25% and the cleaning and laundry will probably be at least £50 each time on a 1 bed property.

    That might have been ok in back in the days when you could offest a loss against 40% tax on earned income.
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