A marked increase in the popularity of self-catering holidays in recent times makes a holiday let a potentially lucrative investment. The demand for UK holiday lets is also predicted to rise further over the next few years as the ‘staycation’ becomes a top choice for Brits due to Covid-19.
A holiday let is the dream for many: you build capital on your property whilst also enjoying low-cost getaways and that attractive annual income. If you’re considering investing and want to find out more, be sure to download our comprehensive e-book (free for all Property Forum members – you’ll need to log in or register to download it) for a thorough breakdown of everything you need to know.
Why Choose a Holiday Let?
You will likely obtain a higher yield than a standard buy-to-let, as the weekly rate for a holiday let tends to be higher than your average long-term rental rate. In addition to this, if you manage to meet the HMRC defined criteria for a furnished holiday let, you can benefit from reconciling some bills and council tax against your income – always handy.
As with any investment, you do need to consider the potential drawbacks. Occupancy rates will vary and income may be largely seasonal, although this can be offset by the better yield. The work involved in managing the business should be your key consideration. With a constant turnaround of guests, ongoing maintenance will need to be managed as well as check-ins and guest issues.
How to Find the Perfect Property
There are several things to consider when searching for holiday let properties for sale. First and foremost, you must determine your target audience. Are you looking to appeal to large families or younger couples? Consider how your chosen demographic would envisage their dream break. Would they prefer somewhere close to transport links and local amenities, in a central location, or near a beach? Of course, you also need to decide if you will be making use of the property yourself!
Marketing your Holiday Let
Once you’ve nailed down your target demographic, you need to focus on marketing efforts. These days social media is your friend. Consider creating a dedicated website and directing people to it through various channels such as Facebook, Twitter, Instagram and Google Ads to encourage direct bookings. Airbnb investments are always a popular choice, as well as sites such as booking.com. When listing your let, remember to make your property stand out from its competitors. Think compelling descriptions, quality photographs and an attractive price point. Remember, your property needs to demonstrate the perfect balance of quality and value to those potential holiday makers.
Firstly, do be aware that a holiday buy-to-let will sometimes require a higher deposit than a standard buy-to-let mortgage. Also, consider how you will plan for low income or void periods. For example, it’s typical to see the majority of your income in the popular summer months and have little to no money coming in later in the year. However, by assessing your finances from an annual standpoint, you can better manage your cash flow throughout the year.
Finally, consider if you will require any assistance with the day to day running of the business. Typically you can expect to pay in the region of around 25% for the services of a management company, depending on the level of assistance you require. Another option is to hire individual staff to cover various jobs such as gardening, cleaning etc. Head over to pages 7 to 10 of our ebook for a detailed list of all the costs you should account for when preparing your holiday let budget.
Are you keen to learn how the Covid-19 pandemic has affected the holiday lets industry? Then check out our exclusive chat show podcast for top insider knowledge on how the market is likely to react over the next year.