Is Buying A Holiday Home In Broadstairs To Rent Out A Good Idea?

dominicnp

Hi

I know this is cyrstal ball gazing to some extent but I would be grateful for some advice.

We are in the lucky position of being able to afford to buy a holiday home in Broadstairs - which we would also rent out (to cover the mortgage).

Our budget will stretch to a two bed flat on/near the seafront.

Does anyone think that this is a good time to buy - especially given the current murmurings of house price crashes? Would somewhere like Broadstairs be relatively immune from such a stagnation/crash?

black-saturn

I used to own a holiday home in the town I live in and the mortgage was paid in full by the people who rented it (but only just as no profit was made). I used to clean it myself inbetween clients to cut down costs. In the end I sold it though as the few bad customers I had spoilt it. One nicked the TV and another vandalised the place.

PasturesNew

dominicnp wrote: »

... lucky position of being able to afford ......to cover the mortgage...budget ... stretch ...flat

Hardly comfort words.
Nowhere would be immune to a crash. Even Buckingham Palace would drop in value if it were for sale.

For many reasons that I am sure other posters will type .... now is not a good time IMHO.

And with the words I picked out in the quote... many times would not be a good time.

There's a lot more to renting property than being able to borrow enough money for it.

macaque_2

dominicnp wrote: »

Hi

I know this is cyrstal ball gazing to some extent but I would be grateful for some advice.

We are in the lucky position of being able to afford to buy a holiday home in Broadstairs - which we would also rent out (to cover the mortgage).

Our budget will stretch to a two bed flat on/near the seafront.

Does anyone think that this is a good time to buy - especially given the current murmurings of house price crashes? Would somewhere like Broadstairs be relatively immune from such a stagnation/crash?

UK house prices have overshot in a fairly spectacular way. It is difficult to see why Broadstairs would be immune from stagnation or a downturn.

BettiePage

How will it be a holiday home if someone else is living in it? Are you planning on turfing them out for two weeks every year?

Running_Horse

You could get a mobile holiday home on a nearby park for a fraction of the money and much more attractive to families. Not saying I would, but you could.

Debt_Free_Chick

Holiday homes .... usually have a restriction, whereby it cannot be occupied by the same person/people for more than x days in any y/z months. So you cannot have a tenant in their on an AST.

It follows then that you cannot guarantee that it will be let 52 weeks of the year. By definition, anyway, it's for "holidays" and it's unlikely that that it will be let all year round. So ... you MUST factor in voids.

In an area like Broadstairs, I would have thought that you could be confident of near-to-full occupancy throughout the summer (June, July & August), half-term and Christmas. Apart from that, who is going to take a week's holiday in Broadstairs in November or January?

You can, of course, supplement full weeks with long-weekends or mid-week stays, at a "special price" - as something is better than nothing.

I have a friend who has five holiday cottages on his farm in the South Hams (Devon). He said that a holiday let vs an AST was "six of one; half a dozen of the other". In other words, the higher price charged for a holiday let (which includes CT & bills) for half the year, was roughly equivalent to the rent he would have got, if he had let on an AST for 12 months.

Does that help?

Debt_Free_Chick

dominicnp wrote: »

Does anyone think that this is a good time to buy - especially given the current murmurings of house price crashes? Would somewhere like Broadstairs be relatively immune from such a stagnation/crash?

I've just re-read your post and I'm confused

Surely, with a holiday let, you are interested in the property's ability to generate rental income - so the capital value is irrelevant. At least until you decide to sell.

Not sure now what you are trying to achieve Sorry, am I being dim?

Generali

I have no idea if it's possible over here but in holiday areas of France, especially on the west coast, owners rent to a couple for 10 months a year and then let to holidaymakers for the 2 months of high summer. The couple get discount rent and usually bunk with other family members for July and August, the owner makes more over the course of 12 months.

Canucklehead

Good evening: We live in Thanet so know Broadstairs very well! Huge number of flats on the market at the mo with new developments scheduled to come onstream soon...lots of DFls (down from London) spotted down in the town (number of Mercs, Jags, Bentleys etc. in the Waitrose carpark in Ramsgate every time we shop)...that being said Broadstairs is still a typical English seaside town i.e flat out during the short summer season then we have the local beach walks to ourselves once the weather turns and the North Sea gales blow down from Margate. The market has risen considerably in the last few years with the average property well out of reach of the first time buyer...Broadstairs is located in one of the most deprived areas of the southeast...high unemployment, social problems and now, the major and best paying employer, Pfizers, has just announced the closure of manufacturing facilities at Sandwich and the loss of over 400 jobs.
But the windfarm, featured on the EON tv advert has been given the green light and we are due for a high speed rail link to London in 2009.
The town has always been a favourite with people of a certain age...sunny bungalow by the sea type of thing...in fact renovating bungalows is now our primary business.;)
After saying all that, although I am not a native of these shores, Broadstairs is my favourite place and has a unique charm...as far as an investment opportunity all the estate agents down here would give it the big thumbs up (no surprise there) IMHO, spend some time (and money) down here first, talk to locals in the tourist industry and get the real lowdown from those who won't directly benefit from your investment.

HTH

Canucklehead

black-saturn

If you did decide to buy I found ebay to be the best place to sell the holiday weeks.