Buying a holiday let: What you need to know
Sponsored feature | Rachel Sackel, Mortgage Advice Bureau
With the boom in staycations in the last couple of years are you thinking of buying a holiday let to rent out?
It could be a real money-spinner but there are some things you’ll need to consider. That’s why we’ve put this guide together to explain what you need to know.
What’s the difference between holiday lets and a normal rental property?
Well, there are a few differences. Firstly, holiday lets are classed as businesses not investments and this means they’re subject to different tax than if you rent out the property to tenants for the long term. Also, because holiday lets tend to be seasonal, lenders generally see these properties as higher risk than if you’re letting out to tenants. So when you're buying a holiday let, mortgage lenders will usually ask for a deposit of at least 25 per cent. Plus they’ll often want to see proof of your income to ensure you’ll be able to make the repayments if the rental income isn’t enough.
What other costs come with buying a holiday let?
Before you go hunting for your perfect property to buy as a holiday let, it’s a good idea to think about the extra costs and responsibilities you’ll be taking on.
- Just like when you buy a standard rental property, when you buy a holiday let you’ll become a landlord. So you’ll be responsible for things like carrying out safety checks such as fire safety, gas, and electrics.
- You’ll need to furnish your holiday let.
- Plus you’ll need to keep the garden clean, redecorate when necessary and make sure any broken or chipped crockery is replaced.
So make sure you add up all the big and small costs when you’re working out what you can afford to buy.
How can I make the most of my holiday let?
With UK holidays so popular at the moment you’ll find holiday lets are getting competitive. So you’ll want to make sure yours stands out from the crowd.
- Location, location, location: Buying a property in a desirable holiday location like a seaside resort or an idyllic spot in the countryside and you’ll be more likely to attract people to stay.
- Make the right impression: Having décor that is comfy and stylish too can make the difference between someone choosing your property and another.
- Think about your marketing: You’ll also want to think about how you’re going to get the word out about your holiday let. Having professional photographs, investing in a website and advertising it could all make a difference, but they come with costs so bear that in mind.
Buying a holiday let: How do I get started with holiday let mortgages?
Whether you’re in the early stages of considering buying a holiday let or you’ve found the perfect place and you’re looking for holiday let mortgages we’re here to help. So call us today on 07375 886347 or click here to arrange a call back.
[Read more from Rachel: The benefits of remortgaging: Can you save money?]
There is no guarantee that it will be possible to arrange continuous letting of the property, nor that rental income will be sufficient to meet the cost of the mortgage.
Your property may be repossessed if you do not keep up repayments on your mortgage.
There may be a fee for mortgage advice. The actual amount you pay will depend upon your circumstances, but a typical fee is up to 1 per cent of the amount borrowed.