Holiday Home

dazco

Doozergirl wrote: »

I'd be interested to know of any decent agents - also, what sort of commission do they take?

Interestingly, after reading pennywise's comments, I'm a bit surprised. We have a house with all the desired qualities - totally immaculate, characterful, 40 mins drive of Stratford Upon Avon, Cotswolds, Malverns & Birmingham and within 5 minutes of a motorway junction. Plenty of bedrooms, bathrooms and flexible spaces and several foodie pubs within walking distance. I was just recently considering using it as a holiday let for a while for a bit of extra income but was worried it wasn't really the right area - maybe it's not bad after all.

I just wouldn't know where to begin advertising it though for a successful summer.

Just google holiday accomodation and go with one of the first ones that come up.

fredsnail

In my area which is a seaside area many holiday homes are let in the winter for 6 months to tennants rather than continue the holiday let.

It's something we're looking into for my Grandfathers bungalow as he's moved into a home and needs as much income as possible to help pay for his fees.

We've not decided whether to go for holiday let + 6 months tennants or just tennants - but we'd probably have to use agents.

Kez100

Some areas don't tend towards the 6 month tenant on holiday property because you lose Christmas and new year plus you cannot guarantee they won't leave the property in a condition for holiday letting - that is tip top!

Don't underestimate the cost and ability to secure a weekly clean.

Many of these accommodations are on a site that traditionally let their own vans - all of them. Ask yourself why are they selling to me if rental from them is so good.

I am not saying don't do it but it's not easy. It is much harder work than a normal typical long term let.

jhobson

If you are serious about buying a lodge or a caravan to rent out you might find this post useful (it's based on my own experience of buying in the Lakes)

http://limefitt.com/smf/index.php/topic,214.0.html

Subletting can be very rewarding in many ways. We've had some lovely guests and over two years renting out two lodges have only ever had damage beyond the odd broken glass on one occasion (touch wood)

Costs ARE high (I factor in about £6k a year) but in the Lakes which is an all year round destination rewards are high too. It's not all financial either - I have met and dealt with some lovely people and there aren't many jobs where people thank you profusely for letting them pay you good money!

I totally disagree with the analysis of our mortgage broker friend who has obviously not investigated or understood the ins and outs of this market, it's potential for RoI and it's tax treatment.

Caravans and lodges qualify as Plant and Equipment, so if you are renting out for a significant part of the year there are some valuable and perfectly legal tax advantages here. This is a major difference to bricks and mortar

The major issue (and downside) with vans and lodges is length of lease, potential depreciation (although price appreciation can happen too) and resaleability. If you buy make sure you buy somewhere which allows at least a 50 year lease and check out the % they will take you for when you sell - it's normally at least 7.5% + VAT. Ouch!

Do not go into this as a short term thing either, or as now when the cycle has turned down you could get your fingers badly burned. Having said that our forward bookings this year are already up by 20% on last year. I just have nightmares about foot & mouth or bluetongue in the same way my friends who do this in France abd Spain can't sleep because of the weakness of the pound and the price of aviation fuel!

Finally, I'd go the private route to letting (we do) with your own web site although you might want to consider getting yourself validated in the eyes of guests who might be wary of renting with private owners by joining a site like www.yourholidaymatters.com or https://www.specialplacestostay.com. These will give some reassurance that you are bona fide. Getting a Visit Britain star rating can also help here.

Also join a free forum like www.laymyhat.com for fantastic advice on letting holiday property.

It's hard work to do this properly, but it does work!

Hope this is helpful - feel free to pm if you have any questions.

(Good point about the cleaning BTW! Sorting that is the hardest bit!)

Nail_Lad

I guess it depends how you're funding it.

Below is my recent estimate of figures for a holiday cottage in Cornwall. We were looking to spend around 200k on a very pretty 2/3 bed place around the Looe/Polperro area. Mainly due to falling house prices, people holidaying in the UK more, interest rates being low and we have a love of Cornwall! Ideally we would have been buying an existing holiday let place, repossession or a small house/apt that is very pretty and in a great location.

After mortgage costs, a cheap interest rate and an estimated high occupancy rate I worked out we could just about break even. However, it's unlikely interest rates will stay low for long and 75% occupancy in the first year is unlikely. 50% is viewed as good. As has been said before this figure improves over time due to repeat business.

Some items I never got to the bottom of were council tax, not sure how that works and my insurance costs as well were a complete guess. I think my annual costs are conservative. I had also thought I would try getting older people in on the quieter seasons but even at Xmas it seems people go away quite alot these days so it's not all bad in the cold months. Plus you can always go there yourself which for us was another plus.

Agents I simply don't agree with. Not in the era of the interweb. Simply not required IMHO. I've booked many holiday lets myself direct with the owners and as has been said all were superb. I was very happy with the experience. Who needs the middle man? Appreciate more work might be involved but we were willing to put in the effort.

RE: smoking, the world has changed completely there and I don't know anyone who smokes that actually smokes in their house anymore. I'd have no hesitation making the place no smoking only.

Anyway my company is in administration, redundancy is imminent so the holiday let idea is shelved for now.






Ok so my gross profit is income less costs not including the mortgage so not completely accurate with regard to accounting principals. Tax is also excluded - again never got round to looking at that in any great detail but understand that there are some tax advantages to be had. Management cost is for the change overs and cleans which I would get someone to do. Again, probably quite conservative.

jhobson

I could show you a 3 bed lodge that you could buy for < 100k in the Lakes with a 45 yr lease. With costs of about 6k, potential occupancy > 90% and gross rent potential > 20k (based on other lodges I know about in the same place) 14% is a pretty good RoI even before you look at the other potential tax breaks.

It'd be paid for, barring problems in 7 years and you'd still own a lodge with 38 year lease generating a very tidy income. Of course you have to work at it - the money doesn't just roll in! You do need to enter into these agreements with great care though and check it's right for you.

There are some interesting bargains about just now.

Nail_Lad

jhobson wrote: »

I could show you a 3 bed lodge that you could buy for < 100k in the Lakes with a 45 yr lease. With costs of about 6k, potential occupancy > 90% and gross rent potential > 20k (based on other lodges I know about in the same place) 14% is a pretty good RoI even before you look at the other potential tax breaks.

It'd be paid for, barring problems in 7 years and you'd still own a lodge with 38 year lease generating a very tidy income. Of course you have to work at it - the money doesn't just roll in! You do need to enter into these agreements with great care though and check it's right for you.

There are some interesting bargains about just now.

Yes, I've seen such agreements. Almost too good to be true. They usually include a clause where you can only use it as a holiday residence not permanent, their cleaning contractors etc. Lodges don't really do it for me. I'd prefer a proper house that I know I could live in one day. I'm struggling to believe anybody can get 90% occupancy especially knowing several owners of holiday lets 2 of which are in the Lakes.

oneofthetrio

I live in a village in the Exmoor National Park and holiday cottages around here are let for most of the year. I do the cleaning and changeover for a small 2 bed cottage and there are not many weeks when the cottage is free. During the winter months the owner does short breaks and Xmas is especially popular with rents doubled.

Nail_Lad

oneofthetrio wrote: »

I live in a village in the Exmoor National Park and holiday cottages around here are let for most of the year. I do the cleaning and changeover for a small 2 bed cottage and there are not many weeks when the cottage is free. During the winter months the owner does short breaks and Xmas is especially popular with rents doubled.

Wow! Good to know. Thanks

StevieJ

jhobson wrote: »

I could show you a 3 bed lodge that you could buy for < 100k in the Lakes with a 45 yr lease. With costs of about 6k, potential occupancy > 90% and gross rent potential > 20k (based on other lodges I know about in the same place) 14% is a pretty good RoI even before you look at the other potential tax breaks.

It'd be paid for, barring problems in 7 years and you'd still own a lodge with 38 year lease generating a very tidy income. Of course you have to work at it - the money doesn't just roll in! You do need to enter into these agreements with great care though and check it's right for you.

There are some interesting bargains about just now.

I suppose if you wished to use it youself you could fill in the gaps in the rental periods. Therefore a place that is close enough and desirable enough should help out with the economics, the Lakes are just the ticket