Renting out house as a holiday home?

PasturesNew

Being in Cornwall, or any place, or near to beaches or attractions isn't a guarantee of success. It's all down to the marketing, the agent, how you get the word out there.

I could have the best value accommodation in the most fabulous location in the world, but if people aren't finding it easily to book it easily then they'll book somewhere else that they found easiser or could book easier.

Also, be aware that certain types of holidaymaker might not be the sort you'd like. e.g. what if your booking was for a couple who booked it for a stag do, they booked late so couldn't get in with their mates who had all booked a local hotel... they book your place and, as it's a flat/house invite the other 30 over for beers/footy.... now, as we all know, this type of male will actually p155 the bed when they're drunk, let the fire extinguishers off, pull the sink off the wall. It all happens in rentals. So you need to think about who you will rent to, who you won't ... and whether your agent will filter your undesirables out, or care at all.

GDB2222

linzeloo wrote: »

As you only just bought this house, why would you be thinking of selling it already?

I was trying to avoid any answers asking why I bought in the first place when I have no money left

People here tend to be judgmental rather than helpful sometimes.

So, assuming you can do holiday lets because the area's good for that and there's plent of demand, what do the numbers look like? You must be able to get an idea of what the rent is likely to be from the websites you are looking at. I guess the letting agent will want 20%-30%. Then there's cleaning, extra insurance, making good damage and extra wear and tear. Then, there's tax as well. You need to ask yourself a few questions:

• Suppose you get to keep half the rental, just to get a very rough idea, how much would that be?
• And how much would you have to pay to live somewhere else?
• How would the figures stack up if you only manage to let the place 75% of the time?

At the end of the day, it's the numbers that matter. If there's not enough profit out of it to make it worthwhile, there's no point.

AbbieCadabra

PasturesNew highlights the main reasons why we never went ahead with it! after looking at the numbers with our head instead of our heart (& dreams), it just wasn't viable, & definitely not for the hassle that can be involved.

linzeloo

Thanks GBT2222, you're right - there's little point in this exercise if the figures don't add up.

I'll crunch some numbers today. If anyone can recommend some good cornwall holiday websites, that would be most helpful. There seems to be tons on google so would appreciate some recommendations on good ones to base my figures on.

Another thought, is there anything particularly unusual about the tax on this income I should know about, or is it literally taxed as extra income. I'm already registered as self employed for an additional but very small income for managing a property.

linzeloo

Zelie wrote: »

Although you say your friends are willing to let you stay over would they still be willing if this was a yearly thing?

Other posters have mentioned reducing outgoings instead/as well. Have you checked out the 4k Challenge thread for tips on reducing spending? Do you have things you can sell to raise cash? Or any particular talents or hobbies which you can turn into something moneymaking?

Just for a few weeks this year to see how it goes, then I could look at a cheap house share if it works out ok.

I don't think I can reduce any of my outgoings although that was a very useful tool. Outgoings are as follows; mortgage £751, water £20, electricity £85, council tax £73, telephone £12, buildings insurance £6.90, car insurance £20.19, credit cards £136, food / going out £100, TOTAL OUTGOINGS £1200. TOTAL INCOME £1400.

GDB2222

linzeloo wrote: »

Another thought, is there anything particularly unusual about the tax on this income I should know about, or is it literally taxed as extra income. I'm already registered as self employed for an additional but very small income for managing a property.

Nothing unusual. Just taxed as income, but you may be able to offset some of your outgoings against it, eg mortgage. Certainly, direct costs will be offsettable, eg lettingagent fees.

Theoretically, this could affect the tax position when you come to sell. Normally, any capital gains are tax-free, but if you are using the house for lettings, that may not work out. In practice, that's probably not a major concern right now, but you'd need to check it before going ahead. I think there's probably a booklet about holiday letting on the HMRC website.

linzeloo

My mortgage company has confirmed they would not officially permit me to let the property out as the people staying don't sign any kind of agreement and therefore technically have squatters rights.

Ah well. Back to the drawing board.

Many thanks for all your posts on this subject - they have all been most informative.

xx

PasturesNew

I doubt it's a "special property", of special merit, but I thought I'd just throw in the idea of renting it out for film locations. There can be demand for these - and certainly a LOT of films made in your area. Maybe your house has "just the look" for a door they want to knock on, or maybe ... well, who knows. It's free to register with them, if you can find any. It's all sort of gone quiet since the Aggiewood Film Studios was shut down after that bloke (allegedly I'll say) dipped his hands in the till.

Maybe an hour or so on google will yield results. It's worth a punt.

PasturesNew

Quick update .... holiday let next door's had one booking this year. Second lot arrived yesterday .... it's a big gaggle of hen night girls, 1.30pm and they're already prancing about drunk in the garden wearing sheets and other accessories. It could be a loooong weekend.

Is that the sort of holidaymaker you wanted?

They all looked respectable enough and wealthy when they arrived (new/posh sports car).

GDB2222

The real worry is when they take the sheets off.