UK holiday lets, AirBNB etc
Discussion
I realise this is a massive subject with many variables but just wanted to chat a little about holiday lets as investments and all the potential pros and cons.
The back story here is that my wife and I are both self employed. Doing fine generally but approaching that time in life where it feels like the clock is ticking loudly on a retirement plan. We both have private pensions but to keep those topped up to form comfortable retirement pots is going to take some really significant ongoing investment. It's doable but I think both of us feel like we could be doing something much more interesting/tangible as an investment.
One option open to us is to move house to a rural property with at least one (or more) lettable cottages on site. Ignoring the financials, this would be a major lifestyle choice, not least because we have two young kids in the equation too but that side of things is a whole other set of considerations to wrestle with!
One place on our radar is an isolated place in a fantastic parts of the Northumberland national park and has a separate cottage and main house. Could work well for us to let out the cottage, might be some other convert able buildings as well. It's not a retirement plan on its own but could either be the start of buying others or part of a wider plan.
We do have another place that is a residential let but other than using a few airbnb's ourselves, running something like this is completely new to us.
Do any of you do anything like this?
I have all sorts blanks to fill in on the financials. Occupancy rates, upkeep costs, what stuff can be offset against tax etc. How much hassle we might expect with difficult customers etc. The realities of sharing part of your home with strangers.
The place we're focused on at present is very remote/isolated but has genuinely stunning views. It's exactly the sort of place I'd want to let as a holiday cottage but does that represent the wider market or do people prefer to be nearer restaurants and a bit of convenience etc?
And with a crystal ball, how do we see the UK letting market changing now? I see some positives coming from CV19 in terms of increased 'staycation' demand and environmental 'guilt' maybe seeing fewer people flying away for holidays. On the other hand, maybe we'll all be broke and nobody will be going anywhere and I should look forward to working until I drop!
Sorry, loads of rambling but would really welcome anyone's thoughts on this. I always value the PH opinion.
The back story here is that my wife and I are both self employed. Doing fine generally but approaching that time in life where it feels like the clock is ticking loudly on a retirement plan. We both have private pensions but to keep those topped up to form comfortable retirement pots is going to take some really significant ongoing investment. It's doable but I think both of us feel like we could be doing something much more interesting/tangible as an investment.
One option open to us is to move house to a rural property with at least one (or more) lettable cottages on site. Ignoring the financials, this would be a major lifestyle choice, not least because we have two young kids in the equation too but that side of things is a whole other set of considerations to wrestle with!
One place on our radar is an isolated place in a fantastic parts of the Northumberland national park and has a separate cottage and main house. Could work well for us to let out the cottage, might be some other convert able buildings as well. It's not a retirement plan on its own but could either be the start of buying others or part of a wider plan.
We do have another place that is a residential let but other than using a few airbnb's ourselves, running something like this is completely new to us.
Do any of you do anything like this?
I have all sorts blanks to fill in on the financials. Occupancy rates, upkeep costs, what stuff can be offset against tax etc. How much hassle we might expect with difficult customers etc. The realities of sharing part of your home with strangers.
The place we're focused on at present is very remote/isolated but has genuinely stunning views. It's exactly the sort of place I'd want to let as a holiday cottage but does that represent the wider market or do people prefer to be nearer restaurants and a bit of convenience etc?
And with a crystal ball, how do we see the UK letting market changing now? I see some positives coming from CV19 in terms of increased 'staycation' demand and environmental 'guilt' maybe seeing fewer people flying away for holidays. On the other hand, maybe we'll all be broke and nobody will be going anywhere and I should look forward to working until I drop!
Sorry, loads of rambling but would really welcome anyone's thoughts on this. I always value the PH opinion.
We have an old staff flat attached to our house that we converted into a self contained 1 bed apartment, we let it solely via airbnb.
It has only been open a year, we are just doing our tax return.
Im not an accountant, but basically:
We have done it via self assessment and manage to offset my wife’s allowance As she doesn’t work.
Cost wise anything we buy for it goes against it - cleaning products, bedding, crockery etc.
We have had 75 stays, always couples (no kids or pets) minimum of 2night stays.
We had one couple early on trash it - had to decorate, carpet clean etc, didn’t get anything from them or airbnbs legal team.
Apart from that we have touched up decoration a few times and had to replace a few wine glasses and plates.
We have turned over approx £24k - in Windermere, private parking etc
It has only been open a year, we are just doing our tax return.
Im not an accountant, but basically:
We have done it via self assessment and manage to offset my wife’s allowance As she doesn’t work.
Cost wise anything we buy for it goes against it - cleaning products, bedding, crockery etc.
We have had 75 stays, always couples (no kids or pets) minimum of 2night stays.
We had one couple early on trash it - had to decorate, carpet clean etc, didn’t get anything from them or airbnbs legal team.
Apart from that we have touched up decoration a few times and had to replace a few wine glasses and plates.
We have turned over approx £24k - in Windermere, private parking etc
Blakeatron said:
We have an old staff flat attached to our house that we converted into a self contained 1 bed apartment, we let it solely via airbnb.
It has only been open a year, we are just doing our tax return.
Im not an accountant, but basically:
We have done it via self assessment and manage to offset my wife’s allowance As she doesn’t work.
Cost wise anything we buy for it goes against it - cleaning products, bedding, crockery etc.
We have had 75 stays, always couples (no kids or pets) minimum of 2night stays.
We had one couple early on trash it - had to decorate, carpet clean etc, didn’t get anything from them or airbnbs legal team.
Apart from that we have touched up decoration a few times and had to replace a few wine glasses and plates.
We have turned over approx £24k - in Windermere, private parking etc
That sounds generally encouraging thank you. The trashing sounds a pain though. Does the feedback system help there in avoiding a repeat occurence? As in, is it less likely to happen to you again now that you're more experienced or just one of those things?It has only been open a year, we are just doing our tax return.
Im not an accountant, but basically:
We have done it via self assessment and manage to offset my wife’s allowance As she doesn’t work.
Cost wise anything we buy for it goes against it - cleaning products, bedding, crockery etc.
We have had 75 stays, always couples (no kids or pets) minimum of 2night stays.
We had one couple early on trash it - had to decorate, carpet clean etc, didn’t get anything from them or airbnbs legal team.
Apart from that we have touched up decoration a few times and had to replace a few wine glasses and plates.
We have turned over approx £24k - in Windermere, private parking etc
Do you know roughly how your 75 stays stacks up in terms of a percentage occupied vs empty?
Do you do the cleaning/preparation yourself and if so how time consuming is it?
Edited by Gad-Westy on Sunday 21st June 19:59
Blakeatron said:
We have an old staff flat attached to our house that we converted into a self contained 1 bed apartment, we let it solely via airbnb.
It has only been open a year, we are just doing our tax return.
Im not an accountant, but basically:
We have done it via self assessment and manage to offset my wife’s allowance As she doesn’t work.
Cost wise anything we buy for it goes against it - cleaning products, bedding, crockery etc.
We have had 75 stays, always couples (no kids or pets) minimum of 2night stays.
We had one couple early on trash it - had to decorate, carpet clean etc, didn’t get anything from them or airbnbs legal team.
Apart from that we have touched up decoration a few times and had to replace a few wine glasses and plates.
We have turned over approx £24k - in Windermere, private parking etc
Wow. What/how did they trash? In 2 days!It has only been open a year, we are just doing our tax return.
Im not an accountant, but basically:
We have done it via self assessment and manage to offset my wife’s allowance As she doesn’t work.
Cost wise anything we buy for it goes against it - cleaning products, bedding, crockery etc.
We have had 75 stays, always couples (no kids or pets) minimum of 2night stays.
We had one couple early on trash it - had to decorate, carpet clean etc, didn’t get anything from them or airbnbs legal team.
Apart from that we have touched up decoration a few times and had to replace a few wine glasses and plates.
We have turned over approx £24k - in Windermere, private parking etc
We were booked for roughly 200nights.
Yes we, well my wife, does all the cleaning and laundry. The actual clean takes about 2hrs, then laundry on top of maybe another 1hr or so.
Trashing - what we assume to be period blood everywhere, lubricant up walls, furniture damaged, towels and bedding beyond saviour.
Being naive and having guests coming in, we just got on with it and made in right. That was our error, we should of photographed everything and if we couldn’t of opened we could of claimed.
No real way of preventing it as we only let to people with decent feedback!
Yes we, well my wife, does all the cleaning and laundry. The actual clean takes about 2hrs, then laundry on top of maybe another 1hr or so.
Trashing - what we assume to be period blood everywhere, lubricant up walls, furniture damaged, towels and bedding beyond saviour.
Being naive and having guests coming in, we just got on with it and made in right. That was our error, we should of photographed everything and if we couldn’t of opened we could of claimed.
No real way of preventing it as we only let to people with decent feedback!
Have 2 properties other than main residence. In same area, New Forest. One is a normal rental & the other done as a holiday let.
Holiday Let runs around 70% occupancy, solid over the summer months. Normal rental never been empty
The holiday let returns far higher income, but the costs & hassle factor soon stack up.
You pay all the bills, must provide internet, must do all annual safety checks, not just gas but PAT testing. You have costs of advertising, need to do cleaning, laundry yourself or pay somebody to do it. You have a 4-5hr window to clean everything & make it spotless, every week. No matter how hard you try, there will always be somebody that finds something to moan about, so you need thick skin. Then there's the calls at 11pm on a Friday evening because somebody has locked themselves out or they can't find something. You can get a lot of that done by an agent but then you pay a lot of that service.
Don't get me wrong it can be made to work, depending on your situation/location, but it can be a lot of hassle/grief for not a lot more than you would get from a basic rental. Of course if it's 2nd home you use for yourself then that's different, but then you can lose some of the tax breaks. Remember tax treatment is different to a normal rental.
Holiday Let runs around 70% occupancy, solid over the summer months. Normal rental never been empty
The holiday let returns far higher income, but the costs & hassle factor soon stack up.
You pay all the bills, must provide internet, must do all annual safety checks, not just gas but PAT testing. You have costs of advertising, need to do cleaning, laundry yourself or pay somebody to do it. You have a 4-5hr window to clean everything & make it spotless, every week. No matter how hard you try, there will always be somebody that finds something to moan about, so you need thick skin. Then there's the calls at 11pm on a Friday evening because somebody has locked themselves out or they can't find something. You can get a lot of that done by an agent but then you pay a lot of that service.
Don't get me wrong it can be made to work, depending on your situation/location, but it can be a lot of hassle/grief for not a lot more than you would get from a basic rental. Of course if it's 2nd home you use for yourself then that's different, but then you can lose some of the tax breaks. Remember tax treatment is different to a normal rental.
Don’t think there is any requirement for annual PAT testing, just that all electrical appliances within the property are safe for use.
Most recommend testing by qualified electrician every 5 years....I thought there was a legal requirement for a safety certificate every 10, which is what we do, but even that looks to be not true....
On costs....we aren’t as hard nosed as many with ours: in part put off by some early characters who caused grief with us and our letting agent, but never had the place trashed in 15 years with our cottage.....so our numbers won’t help you out, OP: we make a small profit each year but get to use the cottage ourselves too.
Most recommend testing by qualified electrician every 5 years....I thought there was a legal requirement for a safety certificate every 10, which is what we do, but even that looks to be not true....
On costs....we aren’t as hard nosed as many with ours: in part put off by some early characters who caused grief with us and our letting agent, but never had the place trashed in 15 years with our cottage.....so our numbers won’t help you out, OP: we make a small profit each year but get to use the cottage ourselves too.
Edited by mikeiow on Monday 22 June 06:50
mikeiow said:
Don’t think there is any requirement for annual PAT testing, just that all electrical appliances within the property are safe for use.
Most recommend testing by qualified electrician every 5 years....I thought there was a legal requirement for a safety certificate every 10, which is what we do, but even that looks to be not true....
You may well be right.... either way it's a another thing that you need to keep up to speed with as it seems to be constantly changing. And whatever they do will add to your costs!!Most recommend testing by qualified electrician every 5 years....I thought there was a legal requirement for a safety certificate every 10, which is what we do, but even that looks to be not true....
Edited by mikeiow on Monday 22 June 06:50
sambucket said:
I'm in the market to buy an airbnb for conversion to personal use. Off topic, but following just in case anyone has any gossip on asking prices softening or otherwise?
Why do you see a property that has been let using Airbnb as materially different to other properties? GT03ROB said:
Why do you see a property that has been let using Airbnb as materially different to other properties?
Because I live in an area very popular with Airbnbs. Most half decent properties that come on the market are already holiday lets, and priced as such. The yield/valuation forumula has different variables to other properties. If there is a softening in prices for Airbnb’s (looking less likely tbh) so that price per sqft is not quite so detached from other properties in the area, that would increase my reach considerably.
Edited by anonymous-user on Monday 22 June 08:35
I would have thought that the Air B&B market is getting fairly saturated to be honest as every man and dog seems to be letting out rooms now. Couple we know here in Devon are selling theirs (it's over the border in Cornwall). It made decent money but was a bit of a pain to manage. Some anti-tourist graffiti sprayed on the outside of the property was the final straw.
Obviously it was a disgruntled local, but to be honest I kind of understand their pain. Locals who can't afford to buy housing so having to rent are now finding that even rental property is beyond their reach as most of the local rentals have converted to short term lets. Wouldn't surprise me if restrictions come in soon (licenses, limits on number of nights etc) to curb the issue that locals see as a growing problem.
Staycations will be popular this year for sure but people are not going to give up their Spanish holidays when things return to normal, especially if the weather this summer does not play ball. UK holidays could be a short term boom that's all.
Sorry OP, not what you wanted to hear but you need to be aware of some of the issues you will no doubt be up against. I think if you can do it as part of your own home in some way then great, crack on. I think buying a place with a mortgage to rent out is risky.
Obviously it was a disgruntled local, but to be honest I kind of understand their pain. Locals who can't afford to buy housing so having to rent are now finding that even rental property is beyond their reach as most of the local rentals have converted to short term lets. Wouldn't surprise me if restrictions come in soon (licenses, limits on number of nights etc) to curb the issue that locals see as a growing problem.
Staycations will be popular this year for sure but people are not going to give up their Spanish holidays when things return to normal, especially if the weather this summer does not play ball. UK holidays could be a short term boom that's all.
Sorry OP, not what you wanted to hear but you need to be aware of some of the issues you will no doubt be up against. I think if you can do it as part of your own home in some way then great, crack on. I think buying a place with a mortgage to rent out is risky.
Tonnes of great input here thank you.
I've started running through the financials. Will do that first and work out some best and worst case scenarios before deciding what to do. Will probably do a viewing as well. Watch this space....
Out of interest, do any of you do multi agent listings or all stick to one place? Is airbnb becoming the default choice?
I've started running through the financials. Will do that first and work out some best and worst case scenarios before deciding what to do. Will probably do a viewing as well. Watch this space....
Out of interest, do any of you do multi agent listings or all stick to one place? Is airbnb becoming the default choice?
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