Owning and managing a holiday let can be a good way to supplement your income or even start a full time business. Demand for self catered holiday accommodation in the UK boomed during the pandemic, and the market is still thriving despite the lifting of overseas travel restrictions, so now may be a good time to invest.
Here are a few tips for acquiring a suitable property and managing it successfully.
The property can be of any size and type, but it does need to have some kind of unique selling point to make it attractive to holidaymakers. The right location is a crucial factor. Coastal properties are always popular, but if you are going to be managing it yourself, you will need to consider how convenient a distance it is from where you live.
Inland areas near National Parks or other areas of outstanding natural beauty are in demand, especially if they have pleasant rural views. However, a contemporary city flat in a popular urban location will also attract plenty of custom.
Related to the property type is the sort of guests it will attract. For example, a four bedroomed cottage by the sea is likely to attract families with young children. A cosy cottage in rolling countryside will be popular with dog owners, so consider if you are prepared to allow pets in the property. A smart city centre flat may be used by younger people for parties.
If you are prepared to make some adaptations and alterations such as installing a wetroom, you can advertise the property as accessible. The National Accessible Scheme has a lot of information on the different ways you can improve the property and promote it as accessible.
It has an official rating system that is split into three categories: mobility impaired people, visually impaired, and hearing impaired. Within each category is a tiered rating system, depending on how suitably adapted the property is for each condition.
As there is a general shortage of such holiday lets and the UK has a growing elderly and disabled population, this may be a worthwhile market niche to pursue.
If you will be taking out a mortgage to buy the property, the lender will probably want to see that the average gross rental yield will cover 125% to 145% of the monthly mortgage repayments. Unlike regular rentals, you are still allowed to deduct the mortgage interest payments from the rental income, which will reduce your tax bill.
Therefore you need to research what similar holiday lets command in the area. Remember that demand and the amount of rent you can charge will vary considerably throughout the seasons. To qualify as a holiday let, the property must be available for at least 210 days a year and let for at least 105 days a year.
If you would like some advice from a buy to let mortgage broker, please get in touch with us today.
Your home may be repossessed if you do not keep up with your mortgage repayments.
There may be a fee for mortgage advice. The actual amount you pay will depend on your circumstances. The fee is up to 1% but a typical fee is £595.
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Think carefully before securing other debts against your home. Your home may be repossessed if you do not keep up repayments on a mortgage or any other debt secured on it. There may be a fee for mortgage advice. The actual amount you pay will depend on your circumstances. The fee is up to 1% but a typical fee is £595.
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