Where to look for that perfect pad
- Analyse any existing property portfolio you have, you may already have the perfect holiday let property and just don’t know it yet!
- Look at your own home – can you convert or develop part of your property or even build from scratch? Don’t overlook or dismiss anything – many a successful holiday let has come from a converted shed, out building or garage. Remember what I said earlier; think unique!
- Estate agents – register with as many as possible and don’t restrict your criteria too much, great holiday lets can come from the most unlikely beginnings.
- Property Auctions are a place where plenty of bargains are to be found!
Private newspaper ads – in this climate, many would-be sellers are trying to save on estate agents costs by advertising themselves, and there could be cost savings to make here.
Existing holiday lets for sale. Check holiday letting agents’ websites, as they often have existing holiday lets for sale. In most cases, these are fully equipped and ready to go.
Drive around and look for potential houses, don’t be afraid to knock on doors and ask if they are selling. Don’t forget to leave your contact details with them – people’s lives can change in an instant.
Word of mouth – let people know that you are looking.
Will it cost a pretty penny?
There are many costs associated with a holiday let start-up, and a large percentage of these are up front – probably long before you have welcomed your first guest through the door.
Buying costs – If you don’t already own the property you will have to pay costs associated with the purchase. These may include solicitor’s fees, stamp duty, mortgage fees, and survey fees. These fees can be offset against any potential Capital Gains Tax liability if you later sell the property. If you do require a mortgage you may need to find a deposit that can be between 25- 40% of the purchase price.
Property Preparation: Repair and maintenance costs, insurance costs, council tax, safety regulation tests, TV licence, internet/WIFI, furnishings and adverting costs – the list goes on! You may also have ongoing mortgage payments if you took out a mortgage to buy the property. These costs can be offset against current and future income from bookings.
Recent changes to tax treatment of holiday lets mean that you can only offset these costs against income from the holiday let and not against your overall income. It is always advisable to keep up to date with changes to tax and regulations – you can visit HMRC website or employ a good accountant familiar with holiday let regulations.
Tax: Any income produced may be subject to income tax depending on your own personal circumstances. Capital Gains Tax may also be payable when you eventually sell the property. Any costs associated with buying and selling the property and work carried out i.e. installing kitchens and bathrooms etc. can be offset against Capital Gains Tax. Inheritance tax may also be payable, again depending on your individual circumstances.
Preparing the Property
As previously mentioned, throwing granny’s old furniture into your holiday let simply won’t work (unless of course granny has some lovely antique pieces).
Guests want quality and new. When choosing your furniture, go for some solid, basic pieces. Good quality beds and comfy mattresses are a must – see my blog post on good night’s sleep.
Opt for a good quality couch and ensure that there is adequate seating provision for the number of guests you accommodate. No one wants to spend a week on holiday squashed onto one couch, regardless of how close their relationship is! I have also found that the trouble with holiday lets sometimes is that they actually look like a holiday let; sparse and unhomely.
Whilst I wouldn’t advocate clutter consider adding some homely touches to your property – you want guests to feel at home as soon as they walk through the door. Our strap line: ‘A home as cosy as your own’ is exactly what I try to emulate and I have had many guest comments saying “I could live here” or “I didn’t want to leave” or “I immediately felt at home as soon as I walked through the door” – or even: I will be back!” The latter being exactly what you want – happy, returning guests!Continue >>