Doing the right thing

gazfocus

dimbo61 said:

Your trying up a lot of equity/money in your home !
If you sell it in the normal way then 100% of any profit you make selling price - mortgage owed  -  is available to spend on the next house.
Why do you want to be a Landlord ?
Is the property a good BTL investment just because you own it already ?
Higher rate tax payer ?
You talk about 9K profit after paying the mortgage ( dream on )
This government and maybe Labour as well HATE Landlords and are doing everything possible to drive them out of business.
Signed a Landlord 

With regards to the £9k profit, I was just trying to illustrate the similarity in the money from both larger house after mortgage vs the seaside one not having a mortgage. I realise there are other costs as already renting the current house out. 

I wouldn’t say I particularly ‘want’ to be a landlord but already happy where we are living (for now) and don’t want £160k sat in the bank not doing anything. Have looked at bonds etc and they are ok for the short term but there’s no long term growth like there is with property. 

Aware of the government vs landlords so that’s one of the reasons we were thinking of a holiday let instead, plus the bonus of being able to use the house ourselves. The downside is having to fork out for furnishing the house, the expense of servicing, etc. 

Slinky

You plan on servicing the holiday let yourselves, but presumably don't live in the same place as the holiday let? How will that work? 

I walked past a holiday cottage at 11.30 this Sunday morning, the cleaner was in servicing it for the next guests. Do you want to be doing this potentially several times a week for a property that isn't local to yourselves?  OK so you decide to only do weekly lets so that it's a once a week clean. This limits your rental potential, and also what happens when the lightbulbs blow or they drop all the glasses and need other ones. A holiday let you are servicing yourself only makes sense if you live nearby, in which case why would you bother staying in it yourselves for a holiday.  Doesn't have legs IMO.

ETA, my friends live near a holiday let and have ended up helping out guests with the heating when they couldn't understand the owner's instructions, just so the owner didn't have to come over and help!

housebuyer143

Be careful as many holiday homes are being stung with 300% council tax in some areas. If they are not now, I wouldn't rule it out in future. 

It's not going to be easy money like maybe a normal BTL might be. There are lots of extra costs that you would need to pay, including gas and electric that you don't on a normal rental. 

GDB2222

housebuyer143 said:

Be careful as many holiday homes are being stung with 300% council tax in some areas. If they are not now, I wouldn't rule it out in future. 

It's not going to be easy money like maybe a normal BTL might be. There are lots of extra costs that you would need to pay, including gas and electric that you don't on a normal rental. 

It’s more common for them to be classified as business premises, with such a low turnover that they pay nothing to the council.

p00hsticks

GDB2222 said:

housebuyer143 said:

Be careful as many holiday homes are being stung with 300% council tax in some areas. If they are not now, I wouldn't rule it out in future. 

It's not going to be easy money like maybe a normal BTL might be. There are lots of extra costs that you would need to pay, including gas and electric that you don't on a normal rental. 

It’s more common for them to be classified as business premises, with such a low turnover that they pay nothing to the council.

But there's a lot of pressure to tighten up on that.

In Wales now a holiday let has to be available to let for 252 days of the year and actually let for 182 of those in order to qualify for Business Rates rather than council tax.
And that council tax would be at 300% of the main residence charge.

In England the threshold is currently lower at 72 days let out of 140 available, but there are campaigns to increase those figures.  

Holiday let tax changes to go ahead in Wales - BBC News

gazfocus

Slinky said:

You plan on servicing the holiday let yourselves, but presumably don't live in the same place as the holiday let? How will that work? 

I walked past a holiday cottage at 11.30 this Sunday morning, the cleaner was in servicing it for the next guests. Do you want to be doing this potentially several times a week for a property that isn't local to yourselves?  OK so you decide to only do weekly lets so that it's a once a week clean. This limits your rental potential, and also what happens when the lightbulbs blow or they drop all the glasses and need other ones. A holiday let you are servicing yourself only makes sense if you live nearby, in which case why would you bother staying in it yourselves for a holiday.  Doesn't have legs IMO.

ETA, my friends live near a holiday let and have ended up helping out guests with the heating when they couldn't understand the owner's instructions, just so the owner didn't have to come over and help!

The seaside town is within a 35 minute drive from where we live and work so not too far to travel. We will be setting a minimum of 3 nights on Airbnb, and will have spares of everything at the house. If we have to drive 35 minutes to sort an issue, we don’t mind doing so. 

gazfocus

housebuyer143 said:

Be careful as many holiday homes are being stung with 300% council tax in some areas. If they are not now, I wouldn't rule it out in future. 

It's not going to be easy money like maybe a normal BTL might be. There are lots of extra costs that you would need to pay, including gas and electric that you don't on a normal rental. 

Thanks for this. A furnished holiday let, assuming it gets the bookings required, can be changed to business rates instead of council tax and you can then claim small business rate relief which will reduce the amount payable to zero. 

I understand about paying for gas and electric but BTL is hardly easy money either haha

GDB2222

p00hsticks said:

GDB2222 said:

housebuyer143 said:

Be careful as many holiday homes are being stung with 300% council tax in some areas. If they are not now, I wouldn't rule it out in future. 

It's not going to be easy money like maybe a normal BTL might be. There are lots of extra costs that you would need to pay, including gas and electric that you don't on a normal rental. 

It’s more common for them to be classified as business premises, with such a low turnover that they pay nothing to the council.

But there's a lot of pressure to tighten up on that.

In Wales now a holiday let has to be available to let for 252 days of the year and actually let for 182 of those in order to qualify for Business Rates rather than council tax.
And that council tax would be at 300% of the main residence charge.

In England the threshold is currently lower at 72 days let out of 140 available, but there are campaigns to increase those figures.  

Holiday let tax changes to go ahead in Wales - BBC News

I agree that it is a disgrace, but it is the current situation.

newsgroupmonkey_

p00hsticks said:

Personally I wouldn't be buying a holiday let now unless I was both prepared to service it myself and really wanted to use it myself at least some of the year. 

I live in a popular holiday location and I think the staycation bubble round here has burst - there are loads of holiday lets coming on to the market and not selling. And the locals I know who have them are continually moaning about how difficult and costly it is to get someone reliable to come in and service the place at every changeover.  

Whereas in my holiday location area, we have quite the opposite.

We have a lot of contractors working in the area (it's not a new thing - this has been going on since 1935).

Holiday lets that aren't being used for holidays are snapped up by said contractors, particularly as hotel costs are now horrendous in the area (according to Tripadvisor, the average is £175 per night).

Some of these contractors will take them for 6-8 weeks at a time too!

If you have an AirBnB anywhere in the east of the New Forest and you're not full all the year round, you're doing something wrong.