Potential Holiday Let Renovation Idea to Fund Care Home

CapeMoth

New here and really hoping someone can at least advise on what I need to research in order to decide if it's worth renovating a house for income.

Back story: Grandfather moved in to a care home in Kent near myself and my mum (his only family) from his house in Cornwall. He receives no help to fund his care which is ~£1000 a week. Savings will only last so long and his house is crying out to be renovated and converted to a holiday let. He wants rid of it and to use money to fund care. Before house sale probably has a year's worth of fees.

The house: good position in Cornwall, quaint 17thC cottage, could be made beautiful but needs bringing in to the 21st century. Concerns about structure of house, do I need a builder to survey it? Needs usual bathroom and kitchen, carpets, heating, rewiring throughout, maybe new windows, goodness knows what else. Sits in half an acre of land. Current state valued at £375k. 

Me: no experience of renovation but tortured to think the house will be snapped up and renovated by someone else or flattened and 3 built in its place. Totally willing to take on the challenge but logistics of being 300 miles away an obvious challenge. Funding for the renovation would need to be extracted from the value of the house. Commercial mortage? Loan? 

Just don't even know where to begin to consider if it's viable. If we could rent it would hope it could make up the £2000 shortfall a month my grandad currently needs to pay for care and keep the asset so it's still in the family when the day comes he is sadly no longer with us.

Would be so grateful if anyone could shed any light on how long any of the above takes, business mortgages, etc etc. 

CapeMoth

Additional: I have family friend who develop property (an architect) who although not willing to fund it or can help at this stage, they are willing to draw plans for me and view it if I can convince grandfather to take this chance. But need figures and timings to put to him as a viable proposition. 

elsien

Before you look at the money side, have you looked into whether you would need planning permission to change it to a holiday let? 

CapeMoth

elsien said:

Before you look at the money side, have you looked into whether you would need planning permission to change it to a holiday let? 

Thank you for even giving me this problem to think about! I hadn't considered this!

From what I understand doing a quick Google, I shouldn't need to have planning permission to change class from residential as it will be a short term let and the changes would take place internally, not externally. 

DB1904

CapeMoth said:

New here and really hoping someone can at least advise on what I need to research in order to decide if it's worth renovating a house for income.

Back story: Grandfather moved in to a care home in Kent near myself and my mum (his only family) from his house in Cornwall. He receives no help to fund his care which is ~£1000 a week. Savings will only last so long and his house is crying out to be renovated and converted to a holiday let. He wants rid of it and to use money to fund care. Before house sale probably has a year's worth of fees.

The house: good position in Cornwall, quaint 17thC cottage, could be made beautiful but needs bringing in to the 21st century. Concerns about structure of house, do I need a builder to survey it? Needs usual bathroom and kitchen, carpets, heating, rewiring throughout, maybe new windows, goodness knows what else. Sits in half an acre of land. Current state valued at £375k. 

Me: no experience of renovation but tortured to think the house will be snapped up and renovated by someone else or flattened and 3 built in its place. Totally willing to take on the challenge but logistics of being 300 miles away an obvious challenge. Funding for the renovation would need to be extracted from the value of the house. Commercial mortage? Loan? 

Just don't even know where to begin to consider if it's viable. If we could rent it would hope it could make up the £2000 shortfall a month my grandad currently needs to pay for care and keep the asset so it's still in the family when the day comes he is sadly no longer with us.

Would be so grateful if anyone could shed any light on how long any of the above takes, business mortgages, etc etc. 

If he wants rid and has capacity then you should assist him with the sale.
 
Is £2000 a month before or after tax and have you thought about the winter months with no income?

CapeMoth

DB1904 said:

If he wants rid and has capacity then you should assist him with the sale.
 
Is £2000 a month before or after tax and have you thought about the winter months with no income?

Thanks for your message.
We are totally willing to help him with the sale however he doesn't want to sell it in so far as it will leave my mum (his only child) with little/no inheritance should he need the majority of the sale price to fund his care. She has no pension or income herself. He never wished to go in to a care home and refused to place the property in our name when we suggested this years ago in case of this eventuality. I just want to see if the idea I have had has legs!

The £2000 I suppose is after tax? His income is £2k and fees costs £4k. So I would need the house to make minimum £2k a month once he runs out of his 'own' money. There is enough to last ~18 months so holiday let money would be supplementing his savings initially. Same would apply to winter months I suppose, hopefully let would supplement savings and build some kind of reserve slowly. (i.e. more coming in than going out with his savings)

gwynlas

Running a holiday let at that distance would be no easy task as you would be totally reliant on the strength of your cleaning company and their ability to engage trades at short notice if necessary, We have had two hiliday lets one in Paris cleaned by the blocks concierge and our present one cleaned by a local company paying basic wage but having trade links. We still beed to do spot cleaning of missed bits as well as meet and greet. For an idea of how much rental the cottage might achieve the major companies will give you projections we had three who wanted ours and chose one with the most local representative.

twopenny

It sounds right for holiday let if you can make all the pieces fit.
I think you need to get an idea of costs first. 
How much for renovation, reliability of cleaning and cost/who, letting agent. 
If that's not too difficult then it's good to go. If it's hard work to fulfil those things then it's not going to get better.
It sounds the perfect solution and it can be but digging deeper will bring up the practicality. How much are you willing, able to do long term.

CapeMoth

gwynlas said:

Running a holiday let at that distance would be no easy task as you would be totally reliant on the strength of your cleaning company and their ability to engage trades at short notice if necessary, We have had two hiliday lets one in Paris cleaned by the blocks concierge and our present one cleaned by a local company paying basic wage but having trade links. We still beed to do spot cleaning of missed bits as well as meet and greet. For an idea of how much rental the cottage might achieve the major companies will give you projections we had three who wanted ours and chose one with the most local representative.

Thank you for your reply, sorry for the delay in responding. Yes, I have found a holiday let company, Sykes Cottages (unsure if anyone has experience with them?). They had a quick calculator thing which recommended it would provide income of around £25k a year. Seem keen to talk to me but don't have anything concrete for them and don't want to waste their time at present. They may recommendations on those things though.

CapeMoth

twopenny said:

It sounds right for holiday let if you can make all the pieces fit.
I think you need to get an idea of costs first. 
How much for renovation, reliability of cleaning and cost/who, letting agent. 
If that's not too difficult then it's good to go. If it's hard work to fulfil those things then it's not going to get better.
It sounds the perfect solution and it can be but digging deeper will bring up the practicality. How much are you willing, able to do long term.

Thank you, glad to hear I'm not the only one who thinks it could be viable! I am visiting next week and meeting with a renovation company so they can view the house and maybe even give us some rough numbers. Maybe from these I could work out how best to fund it, loan, remortage, business mortage etc. (There isnt currently any mortage or debt against the house.)

In the long term if the house is established and gets bookings I am willing to dedicate some of my time to running it. It will also benefit my mum so I hope she will also assist. I currently work 40hours a week and she does not work, so ideally I hope she would take up some of the day to day admin. I am the initiative to get this moving!

FreeBear

CapeMoth said: Maybe from these I could work out how best to fund it, loan, remortage, business mortage etc. (There isnt currently any mortage or debt against the house.)

There is no way that you would be able to get a mortgage or any other secured loan against the property. You are not the owner, so would not have the authority to sign any paperwork. You might be able to get an unsecured loan depending on passing affordability checks and current credit score.

But one thing to bear in mind - If adult social services get involved in the care of your grandfather, they could well force the sale of the cottage to cover care costs - They'd also take a good chunk of that money to cover any legal costs.