What return do you get (or would you need) on a holiday home/BTL?

[scooterscot]

Would only ever buy a freehold. Leaseholds are just glorified renting.

[MrMarkyMark]

Would only ever buy a freehold. Leaseholds are just glorified renting.

Depends, you can sometimes share a freehold, as my Mrs does in London. Given its an old Mansion block with as much land around it, as it stands on, it's not a bad thing to have a share in.

[DimPrawn]

May I suggest you invest in a tent, and join the queue at Calais.

FTFY

[d000hg]

Thanks all. In comment on a few things raised:

It's 979 years remaining on a 999 year lease (I assume this is when the property was converted to flats) but if I understand correctly the three flats jointly own the freehold anyway.
The service charge is £200pa but I think just between the three flats not some management company (I need to check this) so it all goes into maintenance; nobody is making a profit and other than the need to negotiate with the other owners these are costs that would be needed anyway?

I do have some reservations buying a flat but I think the issue is anything worth having as a house would be at least double the price, maybe triple. And actually down here, I'm told a two bedroom let is the easiest and most popular to let by a guy who runs a holiday let company.

Someone mentioned difference in taxation rules compared to a BTL and I'd come across this online, what exactly are the differences? Is a holiday let still able to claim mortgage costs against profit for example?

I'm most worried that pushing to get 5% ROI is not what I expected from a BTL. Clearly it's far better than I can get easily in other avenues, am I just being too ambitious and should be happy as long as I can get 2%+ if I end up with the money in a desirable property with good resale potential?

[DimPrawn]

BrilloPods?

[d000hg]

Any more for any more... realised this dropped off the front page for the Monday hordes...

[bobspud]

just one thought.

We go to Cornwall a lot because we are near it. The spread of clientele down there can be very wide in terms of breeding and cash. I would not go near anything that the plebes could afford to rent for a week as they are not much better than animals.

If you are on a tight margin it won't take much to push your profit into a loss when you get a family of plebes turn up and wreck it by acting normal.

[d000hg]

Can plebs afford £700+/week? That's what a 2-bed flat goes for here!

[MarillionFan]

Can plebs afford £700+/week? That's what a 2-bed flat goes for here!

Sounds like you've got suckered in by the high season rate. Remember the six weeks in the summer, half terms and Xmas tend to always book out at the highest rate. As its two bed, that limits a lot of families.

You need to work out what it rents for at the rest of the year. (Hint : centre parcs publishes its entire rates and allows you to work out seasonality). Also work out how many weeks let.

I think 700 sobs at the height of the season gets you plebs with a little spending money. We normally look at £1200-£1700 for a place in the summer and pay higher end in Cornwall.

[MarillionFan]

https://www.homeaway.co.uk/info/owne...y-lettings-tax

I didn't realise tax was different for furnished holiday lets. But here is an article.