Best advice on buying a holiday home
Yes you can earn twice or three times more than your normal let of say 6 or 12 months which makes this market even more popular. It can be hard work putting this together and Westbeach Properties are here to help from say specialist holiday Let insurers through to helping with what furnishings are needed in your furnished property and what guests look for while staying in your property. When this is all put together you can then have this set up and ready to go to enjoy the earnings you can make from this. There are usually the high seasons such as the summer, bank holidays and Christmas holidays through to mid-season rates at Easter and low season from September up to 23rd December and from January to March. With a holiday let you can decide when you want this property free for yourself and choose the dates you want to rent out to guests.
Here are some tips for getting started as a holiday landlord or landlady.
1. Choosing a property
Know your customer and know your product – two golden rules of business which apply equally to holiday lets. Unless you’re very experienced, go with what you know and buy a property in a place where you yourself enjoy going on holiday. This will enable you to judge for yourself if it’s worth the rent you’re charging, and it also means that you can use the home yourself when it’s unoccupied. Also choose a location where there is a strong year round demand for short term rentals.
2. Using the right mortgage
Be warned: you will need to use a normal mortgage, not a buy-to-let or a second residential mortgage, as these usually prohibit borrowers from letting the property as a holiday home. Talk to a mortgage broker or financial adviser to find the best mortgage for your needs.
3. Remember the taxman
Inform HMRC that you plan to start letting out your holiday home, as tax may be due on your income from it. You need to report any rental income above £2,500 in your self-assessment tax return. If the income is less than this, you should still notify the Self-Assessment Helpline (0300 200 3310). If your company owns the property, the rental income must be declared as business income.
4. Claim any allowances you’re entitled to
Letting out a holiday home counts as a trade rather than an investment, which gives you more favorable tax treatment. You may be able to claim various allowances and reliefs, including:
• Capital allowances on furnishings and equipment
• Capital gains tax reliefs, e.g. business asset rollover relief.
In order to qualify for these allowances your holiday home must meet certain criteria, including being available at least 210 days per year and let for more than 105 days a year. Also no single guest may stay for more than 31 days, and you must charge market
5. Holiday Let Insurance
You will most certainly need to invest into a speciality Holiday Insurance which will cover you for accidental damage, public liability, malicious damage and maybe loss of income. There are many to shop around with and the companies listed below are ones that our landlords either have used or we have spoken to them direct, the links are:-
6. Permission to let out your Holiday Home
Please bear in mind that you will also need permission from say management companies and also speak to the residents nearby before you rent out your holiday home. For instance if your property is leasehold you will need to double check the lease to see if there are any restrictions that will apply. Also if your property is a flat convertion or purpose built it is good to talk to the other residents on what you propose to do and some even have their own residents committee. It is good for others to know what you are doing and more importantly they agree as you would not want this to ever be an issue for the future.
7. Health and Safety
When you rent your property out to guests on a short term basis they are treated as guests in your property and it is essential to make sure that your property is fully compliant with all health and safety regulations. This means you will need an upto date annual gas safety certificate, smoke alarms and carbon monoxide detectors are in place. Also a fire risk assessment on your property is required by law. This means you need to improve any fire safety measures for example fire extinguishers, fire blankets (in kitchen), possibly sprinkler systems. It is well worth paying for a fire safety officer for one of these risk assessments especially if your property is of a larger size and needs to be pointed out all possible means of escape and meeting assembly points etc.
Screening your guests and having house rules
It’s your property and your investment – you don’t want people there that might damage it. At Westbeach Properties if guests come via us we set out clearly stating the rules in our terms and conditions. We think are rules are strict but fair as we don’t want to make people uncomfortable, as we want all guests to be able to enjoy the property at its best.
Please see our PDF of what our guests Terms and Conditions states (this is attached on email)
We also use a website called guest scan to see if their names when entered onto the system flag up as unwanted guests due to them being reported from other hosts, hotels and B&B’S. At Westbeach we also ask for their passports so that we can validate these to confirm their names etc. If guests come through via Airbnb and Trip Advisor they do have their own screening process of guests along with their Terms so that this is covered.
8. Handling disputes
By using Westbeach Properties we are members not only of the Ombudsman but also a member of the EASCO (English Association Self Catering Operators). When a complaint comes to us we try to get this resolved as soon as possible as we have experience in property management, but if this cannot be resolved at all if a case becomes irresolvable the EASCO are on hand with advice in this area. They also have the DRS (Dispute Resolution Service) which is a low cost arbitration service for disputes which is much cheaper than court and the service works on paperwork alone. What happens is the arbitrator reaches a binding conclusion and both parties must agree to this.
If this is something you are thinking of doing or have already bought your second home, please give us a call at Westbeach properties and we will be happy to give you advice or come round to give you an idea on prices that can be achieved, on 01273 911213 or visit us here.