Holiday rental - things to consider ?

Louisarose

Hi all,
I am contemplating buying a chalet on the Norfolk coast to let out as a holiday let. I have consulted a holiday let company who, I feel, have given me some good terms. They currently have similar properties on the site so they have based their figures on those I believe. I am not in a position to administer it myself currently. I have taken into account site fees, insurance, electricity, internet, council tax and water rates I still need to find costs for the changeover day cleaning but I understand the site have someone who does this. is there anything else I need to consider. 

If I go ahead the intention is to buy the property cash with a withdrawal from my pension and then open a second account to manage the expenses and income from the property.  

This is a completely new situation for me so any advice would be massively appreciated. 

Thank you 😊

anselld

"Chalet" on a "Site" sounds like a park home.  Bear in mind that the resale of these may be difficult, there may be further restrictions and charges imposed by the site, so you may find it difficult to get back what you are investing if you need to, let alone make any capital growth. 

Consider the plan to force all Let properties to become EPC C fairly soon.  What is it now?

Consider also the new gov proposals ... https://www.gov.uk/government/news/new-holiday-let-rules-to-protect-local-people-and-support-tourism#:~:text=New%20proposals%20will%20introduce%20a,lets%20in%20tourist%20hot%20spots.&text=New%20rules%20to%20give%20communities,unveiled%20by%20the%20Government%20today.
The tax regime for FHL is better than normal BTL but they are already clamping down on Capital Gains (not withstanding above comments) and it may not be long before they realise there are more tax pickings from FHL businesses.

Louisarose

Thanks for that, some good advice. It is a brick built 2 bedroom chalet so not a park home. I have been avoiding those. I wasn’t aware of that legislation and it’s EPC rating is F so there would be some work to do there for sure ! I will have a look at those government proposals as well, it’s on a site that’s only open March - October so I will have to see if that makes a difference. 

Thanks again ! 

tacpot12

Your post was ringing alarm bells for me. Withdrawing money from your pension to invest in a venture your don't understand (and can't even administer) is so risky! There have been articles and even posts on MSE about people that have been sold an investment on such a site and then had a problem when the site owner has done something that means the income stream dries up and then they found that investment can't be sold.  

Your money is safe in your pension, and withdrawing enough to by a chalet is probably going to give you an enormous tax hit. Why are you contemplating taking this risk? Have you had any professional financial advice about withdrawing money from your pension, and the tax implications of this?

Stubod

...no no no....I would not be taking money out of a pension to fund this scheme, a very bad idea imho.  

RAS

Quite simply, don't.

You've spoken to a sales person who realises you know nothing about the business. You are risking your pension.

Go away, spend a couple of years researching them subject, check out with other chalet owners on other sites if this breaks even, learn how to run the business and look again at the demand in two years time. 

Then come back with the additional information.