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

[LondonManc]

Sounds like a place you'd want to spend a couple of months a year in yourself. If so, then surely as long as it's covering itself and you're getting two months free accommodation, view it as a pension plan rather than a BTL to make any money from. As long as you can go outside of the peak weeks yourself to maximise your revenue, then it sounds like a good plan (and one that I'm a couple of years behind you on).

[d000hg]

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.

I'm aware the prices plummet outside those 6 weeks (though I wondered if it should be more than 6 weeks to cover Scottish and overseas holidays being at different times).

re:2 bed I was told this is the easiest to let. A typical family with two young kids, they're happy to have the kids share rather than pay the £1200 which a 3-bed would attract. Maybe that marks them as plebs But then very few people can afford what we can for holidays - if you cater to the rich you risk not selling as many weeks.

Good advice about CP publishing their rate card, thanks.

[LondonManc]

I'm aware the prices plummet outside those 6 weeks (though I wondered if it should be more than 6 weeks to cover Scottish and overseas holidays being at different times).

re:2 bed I was told this is the easiest to let. A typical family with two young kids, they're happy to have the kids share rather than pay the £1200 which a 3-bed would attract. Maybe that marks them as plebs But then very few people can afford what we can for holidays - if you cater to the rich you risk not selling as many weeks.

Good advice about CP publishing their rate card, thanks.

Look at tariffs in holiday parks nearby - they'll bump their rates up for Easter and Whit as well as the main six weeks.

Typically, you'll have your top rate for the main 6-7 weeks plus Christmas and New Year
Secondary rate for the two weeks before and two weeks after the summer peak, plus Easter and Whit, a third rate for May, June and September and a base rate for the rest of the year.

[d000hg]

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.

This is basically what we were allowed to do on BTLs until the last year, which they took away? Carrying losses forward, mortgage interest as an expense, yada yada?

What's the taxation situation on rental income in this scenario? Just taxed like additional income at standard rates? General advice for BTLs is not to run it through a company so I assume the same holds here, is there perhaps any benefit doing it as a sole trader basis perhaps through my wife's name who has a more regular £30k salary. Stamp Duty is a PITA since that's £5k loss off the bat

[d000hg]

I also saw some reference to FHL (furnished holiday letting) income being something you can treat as a pension contribution but not sure on the details. It seems like if you own one or more FHL, HMRC treats this as some sort of quasi-business entity even if you don't run them through a business - some business rules apply, others do not!

[d000hg]

Is there any reason why a property should be put in my name only rather than my and my wife's names jointly? i.e. income taxation, avoiding Stamp Duty, etc? Or will HMRC assume it belongs to both of us anyway for these purposes?

I don't consider divorce a reason for this decision before someone says it... but out of curiosity would it make any difference to that anyway? Technically speaking, I would be buying somewhere with cash I inherited i.e. not jointly owned/earned cash... is there a good reason to have the place in my name rather than in both our names which would be my default option?

edit: For instance if it's jointly owned then do we each get 50% of any income meaning my wife would have to start doing a SATR, which she doesn't currently?

[RetSet]

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?

HMRC currently treats BTLs as an investment and holiday lets as a business. THis will show up in the coming years as the interest on BTL mortgages is gradually disallowed as a business expense (we BTL landlords are all tax cheats, you see ).

If you are going to holiday let, or use the property as Serviced Accommodation (also A Real Business) be sure to finance it with a 'proper' commercial mortgage, not a BTL one.

[RetSet]

If you're serious about this, you need to get yourself off to some property networking meetings.

Start off here: https://www.pinmeeting.co.uk/

And/ or here: Welcome to Progressive Property Network - Progressive Property Network

Top tip. When you go, introduce yourself to the host(s), explain where you're at, and ask who you should be talking to.

[scooterscot]

Have been letting out our Edinburgh place for 5+ years now. I'm reliant on year round trade not just festival trade. Interestingly festival month is not as strong as you'd think as my costs are way up with the amount of turnovers. Best month is September, £3-4k in that month alone. Usually mum and daughter types renting the apartment to settle her into university. March / April is conference after conference. Golf season, London types for a long weekend in Autumn and New Years BOOM - next year's was already booked out several months ago. Even Christmas for that matter. Births, deaths, marriages, we've had them all staying. Point is it is a year round game and people are not always there for a holiday. If you're holiday let only you're cornering yourself, IMO.

Pricing is important but people, myself included, will always pay extra for quality. You want a memorable trip not a travel lodge nightmare. But if cheap makes you cheerful etc.. I tend to price higher to make sure hen parties stay in Bournemouth where they belong so that Edinburgh kept for the civilised.

If you're bent on buying a place in the countryside you need little or no mortgage IMO.

PS: I find living abroad helps keep our taxable income down to near nadda.

[eek]

HMRC currently treats BTLs as an investment and holiday lets as a business. THis will show up in the coming years as the interest on BTL mortgages is gradually disallowed as a business expense (we BTL landlords are all tax cheats, you see ).

Nope the benefit derived from all mortgage interest payments being tax deductible on BTL property was shown to have impacted the housing market to the extent that change was required. And the change isn't as bad as what I believe was originally recommended...