Buying a UK holiday home!

Nina20

Hi,

I want to buy a house in the UK and turn it in a holiday let cottage. Does anybody have any advice, tips or experience they can share.

I have the money sorted to buy the property so this is not an issue. I don't want to generate an income, would be happy for the property to pay for itself. So my question is, what expenses do I need to factor in with the running costs? Ie,

Letting agent costs (been quoted 24% plus set up fee for photos etc, is this normal?)
Insurance types
Cleaning costs (as I live too far away to do it myself) (one company wants an annual fee then charges per clean/laundry etc is this normal)
Welcome gift costs (milk, bread etc) and do I have to pay the cleaning company for sourcing these?
Gardening/maintenance costs?
Do I charge a house keeping deposit? Or does this put people off?

If anybody can provide me with a full list of expenses I need to factor in that would be great!

Thanks for your time!

ognum

Dont forget Tax!

heath480

https://www.laymyhat.com/ Is the place to get answers to all your questions,it is specifically for holiday home owners.

Guest101

You'll be making an income, maybe not a profit (though i fail to see why you'd do it without a profit) so tax is a key thing, get an accountant.

Itismehonest

In addition to things already mentioned.....

Public liability insurance
Landlord insurance
Full furnishing + wear & tear replacement
Membership/cost of quality grading.
Advertising
Annual checks by electrician etc.
Gardeners & other tradesmen for upkeep of inside & out.
TV licence (if using)
Business rates or Council Tax - depending on level of bookings

There'll be more but that's off the top of my head.

When we started many, many years ago the agency fees (including booking fees) brought the total nearer to 30%.
No, it isn't normal (or, at least, it wasn't) for cleaning companies to charge an annual fee although we lived on site so maybe it was done for away-landlords.
You will need a very reliable & trustworthy key-holder to meet & greet, check the place over before & after lets. They would probably be the ones to restock any Welcome basket.

Having run holiday cottages for over 20 years it isn't something I'd advise anyone to do long distance.

ognum

Council tax and utilities

Wear and tear

traveling time and money to be around to get things fixed!

PasturesNew

You might need planning permission in some areas.

WellKnownSid

ognum wrote: »

Dont forget Tax!

"In the UK" suggest the OP might not be in the UK. So it may be Tax x 2 depending on double taxation rules, etc.

Madmel

I've been running one for almost 7 years now. My main concern would be: Who guests would turn to if there was a problem?

I posted up some of the trivial concerns I had faced since March this year about a month ago. Most were very easily solved as I live right next to my cottage - things like re-tuning the Freeview box. But what about when there is something more serious or tricky to solve? Like the time when the guest banged on my door at 7.05 one morning [it was school holidays, I was still in bed] to ask where the nearest doctor was and could I get him an urgent appointment. The information was in the cottage but he felt too ill to do it and his wife was almost blind, so couldn't help him. I ended up taking him and his wife to the GP, waiting with them, then taking him to the hospital, ringing their daughter, collecting her from the airport and bringing her back here to collect the car and then look after her mum whilst the chap underwent emergency surgery. Would your house-keeper person be willing or able to help at anti-social hours and what sort of money would they want for that?

I don't know about out-sourcing laundry because I do all ours. The advertising costs sound high to me - I pay around 11% commission with upfront costs per year. I took my own photos to upload to the websites and brochures and guests have commented on how the place looks just like it does in the pictures [yes, probably because I don't know how to photoshop them!]

You would not pay Council Tax; it's a business and attracts Business Rates. In addition, you have to pay extra for refuse collection as this is not included in Business Rates.

Theartfullodger makes an interesting point, although I hope not relevant to us. Our insurance puts a 14 week limit on guest stays, so we cannot let it out to the same people for any longer. It works well for accommodating people when the holiday parks close over the 3 winter months but means that we are not getting involved in ASTs.

It is entirely up to you whether or not you leave a welcome tray/basket. I ask if they would like me to get anything in for them, but most people would rather get their own. I leave a tray with tea, milk and biscuits so they can have a cuppa when they arrive but include that as part of the rental.

Hope this helps.

Itismehonest

Madmel wrote: »

You would not pay Council Tax; it's a business and attracts Business Rates. In addition, you have to pay extra for refuse collection as this is not included in Business Rates.

Actually it does depend on circumstances. The legal bit for England says that ....

If the property was available for letting throughout the year but the operator makes a conscious decision to only accept bookings for a total of 139 days (or less), then the property will not be subject to a rating assessment but will be allocated a council tax band.

Where the operator does not make a decision to limit the total period for which bookings will be accepted, the property will be liable for a rating assessment, regardless of whether actual lettings fail to exceed the 139-day limit in any given year.

http://www.voa.gov.uk/corporate/Publications/holidaycottagesGuide.html

So should the owner, for instance, retire from letting their cottage/annexe but continue to live in the main residential property Business Rates stop applying & CT on the cottage/annexe starts.
The same could apply, presumably, if an owner wanted to have personal use of the property for amounts of time which would reduce the total days below 139.

Madmel wrote: »

Theartfullodger makes an interesting point, although I hope not relevant to us. Our insurance puts a 14 week limit on guest stays, so we cannot let it out to the same people for any longer. It works well for accommodating people when the holiday parks close over the 3 winter months but means that we are not getting involved in ASTs.

That's interesting. Our Holiday Cottages Insurance made no stipulations. The maximum length of individual lets & number of months allowed to open were part of Planning Permission.

Schofields

In addition to laymyhay, http://www.accommodationknowhow.co.uk/ is also a great resource on legislation etc.