Investing in a Holiday Cottage
Falling property prices are a tempting proposition for those with spare cash to invest, and that lingering desire for a holiday bolt hole could become a reality as prices have steadied. Unless of course you have set your heart on a waterside cottage at Salcombe, no real change there unless you have a minimum of 1.75 million.
Location, location, location
There are less expensive locations than the South Hams, but if you want to achieve a worthwhile commercial return, you will have to research your UK holiday hot spots. Investment in Holiday cottages is a long term strategy, not for the fainthearted and not for those who buy on a whim rather than taking a hard business like approach.
So location, location, location is always the top priority, but followed very closely by flexible accommodation and easy access to recreational opportunities. Views are a big selling point, sea, river, countryside and also rather surprisingly privacy is a big factor in customer choices.
So location, location, location is always the top priority, but followed very closely by flexible accommodation and easy access to recreational opportunities. Views are a big selling point, sea, river, countryside and also rather surprisingly privacy is a big factor in customer choices.
Generate up to 45 sold weeks
Holiday letting in the UK can generate as much as 45 sold weeks, so choose an all season destination. If not actually situated by the coast, then within a short drive is a big plus. Good restaurants, walking, perhaps riding or golf. A historic or horticultural delight that does not close down from October to March. No one wants an off season break where everything is 'shut up'. There has to be a hook.
Whatever you choose, it has to be photogenic, inside and out to sell the dream and when deciding on a particular size of property, consider your best audience. Room just for two? Couples prefer a romantic retreat, don't forget you are up against the hotel industry here, which can offer good value 'all in breaks'. A known spend one might say. So create your own 'known spend', throw in a meal at a good local eaterie, offer fluffy bath robes and a welcome breakfast basket.
Whatever you choose, it has to be photogenic, inside and out to sell the dream and when deciding on a particular size of property, consider your best audience. Room just for two? Couples prefer a romantic retreat, don't forget you are up against the hotel industry here, which can offer good value 'all in breaks'. A known spend one might say. So create your own 'known spend', throw in a meal at a good local eaterie, offer fluffy bath robes and a welcome breakfast basket.
Room for a family
Families require at least one bathroom. Groups of over four and five people will be seeking an additional shower room. A holiday cottage can achieve a higher return by offering two bedrooms both en suite, than three bedrooms and one bathroom. No one wants to spend a holiday queuing up for the bathroom. Being within walking distance of a village shop and pub, plus bike hire or other family based pursuits all adds to the desirability. Room for two families
A very popular renting option for either an extended family or friends planning a UK holiday together. An off season letting opportunity for anniversaries and family get togethers. Individuals often opt to live in smaller houses and a holiday home that can comfortably accommodate all the generations is a popular choice. Just remember the number of guests to bathrooms ratio and supply plenty of champagne flutes. Furnishing your cottage
Resist the urge to furnish your holiday home with your own ( or someone else's) surplus furniture. The best selling properties offer contemporary interiors combined with high spec fittings. Bookers of holiday cottages take as the norm that there will be flat screen TVs, Sky, DVDs, Wi Fi, wood burner or open fire ( essential for winter lets) Jacuzzi or a hot tub. It may all seem a bit over the top, but these features will make your property stand out from the rest. Potential bookers make aspirational choices and the reality should not disappoint. That's the true meaning of value for money. Advertising your cottage
Last but not least, how are people going to discover your beautifully presented holiday home and idyllic location. It comes down to Agency V. Self advertising. If you have thought of handling your own letting programme, you should consider the very real costs of web site production, on going advertising, marketing, promotion and booking administration. Added to which, you will have to be available for customer enquires on a daily basis throughout the year.
Expect to pay a agency commission charge of between 15% and 25%. Usually a holiday cottage agency can achieve higher rentals than the private advertiser and there are plenty of quality ones around, like New Forest Living who specialise in Holiday Cottages in the New Forest and surround areas. Its worth remembering that their fees are an allowable tax expense against your annual holiday letting income. But before you sign up, remember, a good letting agent should in fact pay for itself by providing you with a service that covers all aspects of your holiday cottage letting.
Expect to pay a agency commission charge of between 15% and 25%. Usually a holiday cottage agency can achieve higher rentals than the private advertiser and there are plenty of quality ones around, like New Forest Living who specialise in Holiday Cottages in the New Forest and surround areas. Its worth remembering that their fees are an allowable tax expense against your annual holiday letting income. But before you sign up, remember, a good letting agent should in fact pay for itself by providing you with a service that covers all aspects of your holiday cottage letting.
Choosing an agency
Place your holiday cottage with an outfit that offers excellent web site presentation combined with high ranking on the natural listings for a variety of search terms. Ask about their PR and marketing campaigns and get friends to pose as 'mystery shoppers'. How good are their telephone teams, how knowledgeable about your property and how keen to make a sale on your behalf? Posing as a customer tells you more than just reading their glossy brochure.
Holiday cottage lettings are recognised as a business (generating earned income) by HM Revenue & Customs, unlike other forms of property letting which HMRC class as investment income (unearned income) Although there are some valuable tax incentives for letting your property as a holiday home, there are also some exacting HMRC rules which you must follow, which include;
Your accommodation must be available for letting to the public for at least 140 days of the year and actual letting must be at least 70 days. You cannot claim the tax incentives when you use the accommodation yourself, or when the property is not available for letting.
Holiday cottage lettings are recognised as a business (generating earned income) by HM Revenue & Customs, unlike other forms of property letting which HMRC class as investment income (unearned income) Although there are some valuable tax incentives for letting your property as a holiday home, there are also some exacting HMRC rules which you must follow, which include;
Your accommodation must be available for letting to the public for at least 140 days of the year and actual letting must be at least 70 days. You cannot claim the tax incentives when you use the accommodation yourself, or when the property is not available for letting.
Seek professional advice
The lettings must be at full market rent, not a peppercorn rent for friends and relatives.
Professional advice from a solicitor and accountant is essential to anyone even considering holiday letting. The tax rules relating to holiday accommodation are very complex, so it is best to seek advice from a professional tax consultant on the most efficient way to set up and operate your business.
Professional advice from a solicitor and accountant is essential to anyone even considering holiday letting. The tax rules relating to holiday accommodation are very complex, so it is best to seek advice from a professional tax consultant on the most efficient way to set up and operate your business.
Other interesting Holiday Cottage Lenses
Other holiday cottage lenses you may find interesting.-
Holiday Cottages in Devon
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Devon, situated in the south western England, is the only country in England that enjoys two separate coast lines. Devon has a large number of beautifully ornamented sea side resorts, unbelievable historical cities and a pleasantly soothing mild clim...
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Self Catering in Cornwall
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A self catering holiday in Cornwall offers the magical opportunity to immerse yourself in a new location and "claim" a property as your own for a short time. Even the most "quaint" holiday cottage these days offers very high standards of furniture a...
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Cottage Holidays
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The metropolitan life has become really complicated nowadays. Everybody is busy in his own work. There are no more parties, no get-togethers; it's just work, work and work all the time. People are working like robots every day, following the same ted...
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Holiday Cottages in Ireland
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Ireland's diverse landscape enjoined with its outstanding architecture draw hundreds of thousands of tourists from all over the world annually. Despite being a tiny island, Ireland is a magnet of tourists in the East Atlantic. The numerous destinati...
Reader Feedback
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- timtav timtav May 1, 2009 @ 8:44 am
- Just in time for me. I was about to look into Holiday Cottages.
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- colindiffer colindiffer May 1, 2009 @ 8:03 am
- This is really good information. Thank you
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- samnoble18 samnoble18 May 1, 2009 @ 7:56 am
- Thanks for the advise - really useful
by Derek-Rogers
Derek Rogers is a professional author based in the UK who edits, writes and publishes professional articles. (more)
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