The British are still embracing the ‘staycation’ – holidaying in the UK rather than abroad in order to cut costs and reduce their environmental footprint. Though the holiday homes market suffered during the height of the recession, there is growing interest in it once again, and we are acting for a number of clients who are attracted by the benefits. As well as offering potential as a good long term investment, it is possible to achieve the best of both worlds when purchasing a holiday home; your own seaside retreat as well as the opportunity to earn income from holiday rentals. If you are looking to buy a holiday home, it’s sensible to know what you’re looking for, how to go about it and ensure you are buying with your head as well as your heart. Here are some useful tips for key considerations that our clients have found helpful when purchasing a holiday home.
Properties within walking distance of a village shop or local pub, with on-site parking, close to beaches, National Parks and with easy access to popular towns and cities will improve its marketability and return. Coastal properties with good sea views will always carry a premium, both in purchase and rental. If the property is not close to a beach then a pool would add value for the warmer months.
Check the neighbourhood at different times of day. If you are close to a holiday apartment block, it may be noisy with numerous families holidaying together. Find a location with similar properties to your own.
If you do not want to be amongst the summer crowds then let your property out from late June through to early September, where you will benefit from the maximum return from high-season rental prices. You can then enjoy your property in the more peaceful periods in early spring, late summer and autumn. Remember, Christmas and New Year are still considered high season, so be sure to make your property available to rent during this time for maximum return.
Find yourself a local team to upkeep your property, handle the weekly changeover and provide a welcome pack for your visitors. Make it the easiest process you can. Make sure that you have a handyman, plumber and electrician on call, including weekends.
The alternative is to pass the property management over to a holiday lettings company who will market the property for you and provide all necessary services for your visitors. For this, expect to pay around 20% of the weekly rental.
If you want to achieve a top return, you will want a property in a sought after location with high specification fixtures and fittings and high quality appliances, including a modern oven, fridge, washer and dryer and well fitted bathrooms. Satellite TV and WiFi are now commonplace, and are especially useful for rainy days. Good quality linen and towels and a welcome pack of basic food items are well received.
In order to establish the correct rental value, search the internet for holiday rental properties with a similar specification to your own and call in a selection of holiday lettings agents to assess it.
Talk to an accountant regarding tax implications in respect of earnings from the property and what you can offset by way of maintenance. If you have purchased the property with a mortgage, you will need to know the net total of earnings available if they are intended to contribute to the repayment.
Think about the ‘What If’s?’
Whilst many buyers are motivated to purchase a holiday home because of the enjoyment they will derive, like with any shrewd investment, it pays to think ahead and have a plan for different scenarios. If you decide to sell the property in the future, how strong is the local market and is the popularity for an area proven or emerging? Are there signs of inward investment into the area to support the desirability of a location? Is there a buoyant rental market or fierce competition?
Planning ahead and doing your research before making a purchase can pay big dividends in the long term.