Holiday Let or normal AST?

mlz1413

I thought of this question due to a different thread, so have posted it as a question to get some thoughts.

How much more would it cost to rent out a property as holiday let rather than traditional rental? Basing on Sunday to Thursday serviced flat (thinking of long term contractors)

Owner needs to pay for: Rates, gas, electricity, water, broadband. Anything else?

Insurance... is this specialist? How do you calculate when you don't know what voids you might have? How many different let's in a year??

Cleaning between lets, changing bedding. Ensuring fridge is empty/clean etc.

Is AirBnB style really better than long term let's?

anselld

I don’t know the overall answer, I imagine it depends very much on the location.
But two points …
  If you only have one FHL you don’t pay rates our Council Tax as things stand.  The property is listed for business rates but the small business rate exemption will apply unless it is a mansion.
I think it would be overly restrictive to limit to Sun-thu or to contractors.  You need all the bookings you can get and that could be anything from one night stopovers to multi-week stays.

eddddy

mlz1413 said:

Basing on Sunday to Thursday serviced flat (thinking of long term contractors)

It's not what you're asking - but you mention it's a flat. So assuming it's a conventional leasehold flat, most leases don't allow short term holiday lets.

In that case, it might be worth checking the lease before investigating all the other details.

mlz1413

Hi edddy,  thats a good shout.  I have seen lots of flats on Airbnb but that didn't cross my mind.

mlz1413

anselld said:

I don’t know the overall answer, I imagine it depends very much on the location.
But two points …
  If you only have one FHL you don’t pay rates our Council Tax as things stand.  The property is listed for business rates but the small business rate exemption will apply unless it is a mansion.
I think it would be overly restrictive to limit to Sun-thu or to contractors.  You need all the bookings you can get and that could be anything from one night stopovers to multi-week stays.

Thanks anselld. I thought rates might need proof of being a company,  but then that probably goes hand in hand with holiday lets too.

The idea of contractors is that we have lots of construction and roadworks nearby and lots tend to go home for the weekend 

MyRealNameToo

mlz1413 said:

I thought of this question due to a different thread, so have posted it as a question to get some thoughts.

How much more would it cost to rent out a property as holiday let rather than traditional rental? Basing on Sunday to Thursday serviced flat (thinking of long term contractors)

Owner needs to pay for: Rates, gas, electricity, water, broadband. Anything else?

Insurance... is this specialist? How do you calculate when you don't know what voids you might have? How many different let's in a year??

Cleaning between lets, changing bedding. Ensuring fridge is empty/clean etc.

Is AirBnB style really better than long term let's?

Your questions are confusing... are you the person thinking of renting in this scenario or the owner of the property? 

What are you doing with the property on Friday/Saturday? 

AirBnB will get much more per day of occupancy than a AST but your issue/challenge is getting bookings. As you say your costs will also be higher given you will be paying utilities, taxes etc rather than your tenant and you have a weekly turnover to do. 

Which will generate the most money is impossible to say with absolute certainty. You'd also need to check any local restrictions on AirBnB type bookings; in London you can only have 90 days of short term bookings in a year without having to have planning permission for example. 

If there is high demand, short rentals will be more money, but are you sure there is strong demand in your area and that it's not going to be seasonal or such? You can reverse solve the equation and see how many days of occupancy you need such that short term gives you a better return than an AST and then try to work out if thats realistic. If you are needing 95% occupancy then thats probably an almost certain no. 

mlz1413

Thanks MyRealNameToo.

It was a hypothetical question but then I realised it needed a scenario to base answers on so have taken my local area.

The 2 empty days would be for cleaning, but I can see that also limits income. 

Good points made and I like the reverse calculation.