Has anyone purchased a Holiday Let?
Discussion
Hi Guys & Gals
We are currently working on a development site within which are some holiday lets
I am interested to know if anyone has bought a holiday let as an investment and if so where you able to obtain a mortgage?
Happy to receive a PM if you'd rather not discuss openly of course
Thanks in advance
Shan
We are currently working on a development site within which are some holiday lets
I am interested to know if anyone has bought a holiday let as an investment and if so where you able to obtain a mortgage?
Happy to receive a PM if you'd rather not discuss openly of course
Thanks in advance
Shan
1. Yes
2. Not bought with finance
3. think you will struggle to pay mortgage from letting income (which is usually only for 20-25 weeks of the year if in the UK) - by the time you've paid utilities; cleaners; agents fees; insurance; council tax; repairs and refurbs you will find that the property will wash its face and maybe leave you with a few quid over but not enough to pay any significant amount of finance; if you want it to pay for itself, you need an AST tenant who will be there 12 months of the year paying all the utilities and council tax.
2. Not bought with finance
3. think you will struggle to pay mortgage from letting income (which is usually only for 20-25 weeks of the year if in the UK) - by the time you've paid utilities; cleaners; agents fees; insurance; council tax; repairs and refurbs you will find that the property will wash its face and maybe leave you with a few quid over but not enough to pay any significant amount of finance; if you want it to pay for itself, you need an AST tenant who will be there 12 months of the year paying all the utilities and council tax.
I just bought it as a residential property and advised lenders that it was being let out as a FHL.
You need to ask yourself why you are doing it. If it is an investment then you need to think carefully over where and what you are buying otherwise you will only get 25 weeks or so which is difficult to justify such an investment.
Some parts of the UK can easily give 40-50 weeks such as North Wales and Cumbria.
You need to ask yourself why you are doing it. If it is an investment then you need to think carefully over where and what you are buying otherwise you will only get 25 weeks or so which is difficult to justify such an investment.
Some parts of the UK can easily give 40-50 weeks such as North Wales and Cumbria.
I believe that developing property as holiday lets provides tax benefits for the developer (favourable VAT on development costs and no CGT IIRC).
Do you need (or want) to retain them as holiday lets, or can you convert use to residential for AST for example?
If so, your question might be 'what is the best use for properties currently used as holiday lets?'
NB I've had holiday properties overseas and with the exception of a few lucrative weeks in the summer, the costs and hassle involved doesn't merit the measly total net return.
Do you need (or want) to retain them as holiday lets, or can you convert use to residential for AST for example?
If so, your question might be 'what is the best use for properties currently used as holiday lets?'
NB I've had holiday properties overseas and with the exception of a few lucrative weeks in the summer, the costs and hassle involved doesn't merit the measly total net return.
Bluebarge said:
1. Yes
2. Not bought with finance
3. think you will struggle to pay mortgage from letting income (which is usually only for 20-25 weeks of the year if in the UK) - by the time you've paid utilities; cleaners; agents fees; insurance; council tax; repairs and refurbs you will find that the property will wash its face and maybe leave you with a few quid over but not enough to pay any significant amount of finance; if you want it to pay for itself, you need an AST tenant who will be there 12 months of the year paying all the utilities and council tax.
25 Weeks is very low these days. It depends on the property and location of course but there are owners who get far more weeks than that. Some of them are weekend breaks (3-4 days) rather than full weeks but that's better than not been let at all. 2. Not bought with finance
3. think you will struggle to pay mortgage from letting income (which is usually only for 20-25 weeks of the year if in the UK) - by the time you've paid utilities; cleaners; agents fees; insurance; council tax; repairs and refurbs you will find that the property will wash its face and maybe leave you with a few quid over but not enough to pay any significant amount of finance; if you want it to pay for itself, you need an AST tenant who will be there 12 months of the year paying all the utilities and council tax.
Eric Mc said:
Pistom said:
I just bought it as a residential property and advised lenders that it was being let out as a FHL.
So you told a lie to the lender?I purchased the property which had pp to use as an FHL and the lender was aware that it would be used as an FHL in the future.
I used it as a second home whilst upgrading it to a standard to maximise rental income and then advised the lender once the property was to be let.
The lender at the time was The Cheshire Building Society who then got taken over by Nationwide.
The rules are (were) not the same as a BTL and considering that the property was used as residential, a conventional residential mortgage was appropriate at the time. The lender has not changed terms since.
Pistom said:
No, not at all. I didn't explain fully.
I purchased the property which had pp to use as an FHL and the lender was aware that it would be used as an FHL in the future.
I used it as a second home whilst upgrading it to a standard to maximise rental income and then advised the lender once the property was to be let.
The lender at the time was The Cheshire Building Society who then got taken over by Nationwide.
The rules are (were) not the same as a BTL and considering that the property was used as residential, a conventional residential mortgage was appropriate at the time. The lender has not changed terms since.
The Cheshire BS were taken over by Nationwide in 2008, are you talking about something you did pre-2008??????I purchased the property which had pp to use as an FHL and the lender was aware that it would be used as an FHL in the future.
I used it as a second home whilst upgrading it to a standard to maximise rental income and then advised the lender once the property was to be let.
The lender at the time was The Cheshire Building Society who then got taken over by Nationwide.
The rules are (were) not the same as a BTL and considering that the property was used as residential, a conventional residential mortgage was appropriate at the time. The lender has not changed terms since.
Pistom said:
Was it really 2008?? Seems like a couple of years ago.
Yes;http://www.nationwide.co.uk/about/corporate-inform...
A few things have changed in the last seven years
As with most purchases, buyers are looking for a USP. Nobody is just looking to give you money.
We fell into holiday letting and it was luck rather than skill that has given us the return we are getting.
Now that we have been lucky, we can see where we could have gone wrong.
In your calculations, don't forget that business rates are much less than council tax.
We fell into holiday letting and it was luck rather than skill that has given us the return we are getting.
Now that we have been lucky, we can see where we could have gone wrong.
In your calculations, don't forget that business rates are much less than council tax.
We considered setting up our ex home on Skye as a Holiday Let but, once you took into account the weekly cleaning bill as we now live 370 mile away, the risk of damage, registering as a landlord, insurance as a holiday let, keeping the garden tidy and a few other things along the line we scrapped the idea. The holiday let season up there in around 20 weeks and weekend cleaners know there worth.
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