New Thread - Sensible(ish) head on now - Mansion rental
Discussion
jammy_basturd said:
johnfm said:
Surely you'd be better off borrowing £4m and buying a huge house somewhere rural with decent sized grounds, gamekeepers cottage etc - live in the cottage. Rent the big house out, nicely down out for self catering to keep staff costs low. Marquee on the lawn for wedding etc. if you find one with a few other lodges/cottages on you could rent them out too. If you and wife work hard enough it'll be much better.
You should try that instead.
That was the original plan. If you know someone giving £4m loans to people/organisations with little experience and virtually no collateral, please let me know!!You should try that instead.
We stayed at a place in York where the owner bought a house on the out skirts of the city with around an acre garden.
He got planning permission for Log Cabins in the garden, built two, moved in one and rented the other whilst he sold the house minus the land.
When we stayed he had around 8 cabins and was living the dream! All done with a much smaller budget than £4 million.
He got planning permission for Log Cabins in the garden, built two, moved in one and rented the other whilst he sold the house minus the land.
When we stayed he had around 8 cabins and was living the dream! All done with a much smaller budget than £4 million.
Do your figures stack up? How much are you hoping to make per month? You have to clear £4000 a month before you have a bean for you and it sounds like you hope to be taking a wage from it?
A 5 min search found a lighthouse that sleeps 10 in a similar location I could rent it most weeks from now till Christmas for £2000 per week say they somehow get a couple of late bookings they could be making £2000 - £4000 a month over the next 2 months if this were you your making a loss on these months.
A safer bet would be smaller properties that could sleep 6 and be more affordable to a family. We have just booked a barn conversion in York in early December for £400 they are fully booked most of the year at that price.
A 5 min search found a lighthouse that sleeps 10 in a similar location I could rent it most weeks from now till Christmas for £2000 per week say they somehow get a couple of late bookings they could be making £2000 - £4000 a month over the next 2 months if this were you your making a loss on these months.
A safer bet would be smaller properties that could sleep 6 and be more affordable to a family. We have just booked a barn conversion in York in early December for £400 they are fully booked most of the year at that price.
OP, I don't want to piss on your bonfire here, but some business logic.
I say this from some experience being good friends with a couple who buy rural holiday lettings, and another poor sod who tried to run a seven figure property as a B&B come wedding venue at a continuous loss until bankruptcy.
First serious point of order. There are agents who will book your holiday property at a reasonable rate. So, issue 1):
1) You are looking to pay £4000 a month rent, and make enough money to get a decent wage on top. If it were possible to do that, then:
a) Why isn't the owner doing that already?
b) Even if you did make it a success, and made more than £4k a month then the owner would just cut you out anyway.
2) Costs. You really need to calculate these before you start. Lets start:
Rent: £48k
Utilities: £6k
Council tax: £2k
Insurance: £2k
Those are your fixed costs p.a. £58k. lets say £5k a month.
Then would out the rate you could rent it out at. Then minus the agency fee for the booking and the cleaning and laundry cost. From that, you can work out your breakeven occupancy.
The next exercise would be to work out what kind of return would be worth that kind of risk, and see if that occupancy is realistic.
Then, consider that your costs will start from day 1, but your first bookings won't come for months. If it took you 4 months to start making £1000 a month net profit, over two years you'd have netted £20k, but worked for nothing as the first 4 months would have left you £20k down in rent and running costs before you started.
On the figures above, with a four month start up period, even if you rented it out at the weekend at £2000, you'd need more than 75% occupancy season in, season out to break even. That's ignoring agency fees and that you'd be doing the cleaning and laundry yourselves.
To me, I'm afraid the figures just don't stack up.
I say this from some experience being good friends with a couple who buy rural holiday lettings, and another poor sod who tried to run a seven figure property as a B&B come wedding venue at a continuous loss until bankruptcy.
First serious point of order. There are agents who will book your holiday property at a reasonable rate. So, issue 1):
1) You are looking to pay £4000 a month rent, and make enough money to get a decent wage on top. If it were possible to do that, then:
a) Why isn't the owner doing that already?
b) Even if you did make it a success, and made more than £4k a month then the owner would just cut you out anyway.
2) Costs. You really need to calculate these before you start. Lets start:
Rent: £48k
Utilities: £6k
Council tax: £2k
Insurance: £2k
Those are your fixed costs p.a. £58k. lets say £5k a month.
Then would out the rate you could rent it out at. Then minus the agency fee for the booking and the cleaning and laundry cost. From that, you can work out your breakeven occupancy.
The next exercise would be to work out what kind of return would be worth that kind of risk, and see if that occupancy is realistic.
Then, consider that your costs will start from day 1, but your first bookings won't come for months. If it took you 4 months to start making £1000 a month net profit, over two years you'd have netted £20k, but worked for nothing as the first 4 months would have left you £20k down in rent and running costs before you started.
On the figures above, with a four month start up period, even if you rented it out at the weekend at £2000, you'd need more than 75% occupancy season in, season out to break even. That's ignoring agency fees and that you'd be doing the cleaning and laundry yourselves.
To me, I'm afraid the figures just don't stack up.
strangely this property has just been sent out on the unique properties for sale mailer this morning
http://uniquepropertybulletin.org/unique-property-...
http://uniquepropertybulletin.org/unique-property-...
As said above the figures just don't stack up.
Your rental income would need to be so high it'd never be let or so low you'd need occupancy of 100% to cover your costs.
Path one, you won't find people or organisations to pay the high rent inWales.
Path two, you won't find enough to pay the low rent who want to go to Wales.
And furthermore the owners won't accept your proposal.
You have great enthusiasm, if you temper that with realism you will do well.
This isn't it I'm afraid.
Your rental income would need to be so high it'd never be let or so low you'd need occupancy of 100% to cover your costs.
Path one, you won't find people or organisations to pay the high rent inWales.
Path two, you won't find enough to pay the low rent who want to go to Wales.
And furthermore the owners won't accept your proposal.
You have great enthusiasm, if you temper that with realism you will do well.
This isn't it I'm afraid.
Renting mansions out for holiday income simply doesn't work unless you own that property wholly unencumbered. As soon as you have to pay rent or a mortgage the income on large properties doesn't cover the outgoings or come anywhere close.
The leverage model that works is the 2/3 bed holiday rental as that is the one that taps into the largest UK demographic of retired couples. It means your weekday occupancy rate is high enough to deliver a profit as weekend occupancies aren't enough.
However, here's another idea for you:
Buy an Airstream. They hold their value and look classy in a field. Buy half a dozen yurts off Tarquin who's just gone bust.
Do a deal with a local land owner to rent a field with access.
Set up a website and market your seasonal pop-up glamp site.
For the 6 months of holiday letting you live in the airstream and manage the site while you AirB&B your actual home.
Build a brand and reputation and a range of sites, move around or scale up etc.
Yurts are renting for up to £250/night which is the same as 2 bed prime cottages but without the enormous initial capital outlay.
The leverage model that works is the 2/3 bed holiday rental as that is the one that taps into the largest UK demographic of retired couples. It means your weekday occupancy rate is high enough to deliver a profit as weekend occupancies aren't enough.
However, here's another idea for you:
Buy an Airstream. They hold their value and look classy in a field. Buy half a dozen yurts off Tarquin who's just gone bust.
Do a deal with a local land owner to rent a field with access.
Set up a website and market your seasonal pop-up glamp site.
For the 6 months of holiday letting you live in the airstream and manage the site while you AirB&B your actual home.
Build a brand and reputation and a range of sites, move around or scale up etc.
Yurts are renting for up to £250/night which is the same as 2 bed prime cottages but without the enormous initial capital outlay.
Humble pie time, yes now the dirt has settled i do realise this is at most, ambitious for a first project.
I’m still looking to break into this market, but as you have said, test the water with a slightly more "mainstream" and affordable concept (think contempory log cabins and glamping in the countryside), if I can prove myself I can attempt to work upwards.
Thanks for the advice all, its been hugely helpful, and will let you all know when things start to develop, plus of course the PH discount!
I’m still looking to break into this market, but as you have said, test the water with a slightly more "mainstream" and affordable concept (think contempory log cabins and glamping in the countryside), if I can prove myself I can attempt to work upwards.
Thanks for the advice all, its been hugely helpful, and will let you all know when things start to develop, plus of course the PH discount!
sgrimshaw said:
Thought you'd arranged to see it last Saturday?
Still listed as available.
They emailed me on Thursday/Friday to say they have someone that has second viewed it and is going through referencing, so couldn't be bothered to go look as a) it had 90% gone and b) I had half realised the above!Still listed as available.
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