Maximise Your Passive Income: Investing In A Holiday Let
Owning a holiday home can be both profitable and hugely rewarding, but the process is ongoing and needs to be treated as a business. Do it successfully and it’s a great way to invest in your future and your family’s future, whilst giving you a holiday bolthole of your very own whenever you choose.
The team here at Finest Stays are on hand to discuss any concerns, advise and help you with all aspects of holiday home ownership offering you support on your journey and helping you get the optimum bookings to maximise your income.
Here are some important points to consider when investing in a holiday let:
High Returns
Understand the market for the highest returns. Choose a popular tourist area/town where you can see yourself living and get to know the property market. We can advise on the type of home which will reach the optimum number of quality bookings and provide you with a good return on your investment.
Research is key; we highly recommend that you get to know the area. Is it family friendly or a couples’ destination? If you’re looking in South Devon it’s likely to have broad appeal which is great – it means you can select whatever property you fall in love with, whether you choose from a romantic bolthole for two to a family home with plenty of space for children and dogs, property prices in the South Hams tend to be a good investment and hold their value so it all comes down to your personal budget.
Tax advantages
You can reduce the costs of owning a second home by taking advantage of the tax breaks available; deductions in tax on your mortgage interest and rental expenses for example. Kit your property out as a furnished holiday home and you can claim Capital Gains Tax relief and capital allowances for furniture, fixtures and any equipment. Please speak to your accountant for details pertaining to your personal circumstances.
An appreciating asset
Investing in property has always been a good option. Okay, so the property market has its peaks and troughs and we’ve just gone through an amazing peak which saw demand (especially in the South Hams) outstripping supply which inevitably pushed up asking prices more rapidly than any of us could have imagined. But it’s all relative when you’re selling one house to buy another – not quite so if you’re just looking to invest your hard earned cash.
Having gone through the peak in property prices during the last couple of years, things are steadying a little now. Gone are the dizzy days when houses were under offer before you could even get a viewing and estate agents were asking for closed bids on ‘offer over’ valuations. House prices are steadying, and indeed, a little lower than they were even a year ago at the time of writing (April 2023). Prices are now becoming a little more realistic. So it’s a good time to put out some feelers, get the ball rolling and find yourself a bolthole in South Devon.
Hassle-free investment
Owning a second home always comes with its demands, expenses and trials, especially if you’re not living close enough to keep an eye on things. Letting your holiday home comes with another set of potential problems for both you and your guests if things go wrong. Consider the scenarios: the dishwasher has sprung a leak and there’s water all over the kitchen floor or your guests arrive at your property to find the key safe is jammed and they can’t get in! Problems you would rather not hear about let alone have to sort.
You may be living a couple of hundred miles away but we don’t! Let your holiday home through Finest Stays and we don’t just deal with the marketing and bookings. Our local team works closely with carefully selected property management companies who will come to the rescue at the drop of a hat, ensuring your letting experience is simple and stress-free. We understand how much your holiday home means to you and we are very conscious of the different requirements when it comes to someone else helping to manage it. With that in mind we can assure you that we can be as hands-on as you need.
Spend your holidays in your holiday home
Flexibility is key when it comes to letting your holiday home. We totally get it, it’s your home and you would like to spend quality time enjoying the beaches, beautiful walks and stunning scenery on your doorstep. This is why we don’t ask for a minimum number of letting weeks from you. Simply let us know the number of weeks you wish to let out your holiday home with us and we will help you reach your goal.
What ROI you can expect?
Your ROI will depend on many factors such as location, views, facilities and level of interior design. If you are looking to buy we are happy to put together a rental overview to see if the property will be a sound investment, or if you already own a home do get in touch to see what you could earn.
Below is an income calculator based on our current property portfolio which will give you an indication of what you can expect to achieve.
How much could could you earn with Finest Stays?
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Seek advice from the experts
Do as much research as you possibly can, and leave no stone unturned. You’re investing your hard-earned cash, possibly taking out a mortgage to fund your holiday home. We are here to answer any queries.
For example… Did you know to qualify as a furnished holiday let, you must intend to rent out your property for profit and it must be available to rent for a minimum of 105 days per year to the public. You can’t include any let to friends or family in the 105 days if they have reduced rates for their stay. This will not be deemed as a commercial let during that time.
But it will only be profitable if you treat it like you would any other successful business. Making the decision on whether to invest in a holiday cottage requires careful consideration, an understanding of the market, interest rates and all the other influencing factors.
Whether it’s to generate income, supplement savings in retirement or simply cover the costs of owning a second property it will only be profitable if you treat it like you would any other successful business. Get in touch with our friendly team for more details about how it all works.
