Any holiday home owners ever make a profit?

[Wallywobbles]

I've owned a holiday home since 2010. It's at the beach in Normandy. It's still mortgaged. It sleeps 12 so not what everyone is looking for but we do manage to rent it for about 14 weeks a year.

Our costs are about 2K a month. I'd imagine more now with rising gas prices. And I don't think we've ever made a profit on it. The sheets laundering is the biggest cost after the mortgage.

Is this also the case in the UK? I know rental owners are seen as parasites by some.

I used to live locally and am now 2h away but have an amazing local cleaner. The first 2 years I did it all myself but with 2 small kids and a full time job it was back breaking work. All weekends and holidays we did nothing else but the changeovers on Saturdays. And hours of sheets ironing over the week.

@Multicolouredsequins

I have run several holiday lets in the UK and have made reasonable profits. I've always used professional cleaners and laundry companies which do cost, but I still find myself constantly fixing items, replacing items, unblocking drains and toilets and cleaning shower filters etc. All the word jobs basically! I have to do all the bits that the cleaners miss, despite playing them very well. It's important to buy in a touristy area and to furnish beautifully. My cost are currently soaring, especially heating, but I can't charge more as I'm already struggling to fill the weeks already due to people tightening their belts due to the cost of living. I think it's going to be a bumpy ride over the next few years.

A very similar experience here - every time we go there is work to do. From freeing up sticky door handles, to cleaning behind the fridge, to fixing a minor drip somewhere, tightening up the beds screws, and a million other things. We don't mind but it does mean that we must go once a month or so, to ensure that anything the cleaners miss or didn't report, gets done.

Yes I make a profit - not a huge one but a reasonable profit.

Cleaning and laundry is done professionally but we do all the minor repairs and constant refurbishment needed. Friends who tell me it would be nice to have a "holiday" home get a hollow laugh. We have yet to have a "holiday" in it that hasn't been mostly taken up by maintenance.

The lumping together of holiday lets and second homes is going to make FHL very unattractive in the future. There is already a gross over supply too this year as many have jumped on the bandwagon.

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[quote Wallywobbles]@MissBPotter remember that weekends are no longer free. And you will have to be reachable always. High season is when you would normally choose to go on holiday too.

It's not an easy option and you'll never be rich. And most of its bloody dull work. [/quote]
That's very true about holidays. Fortunately I'm not bothered about them, as I last went on holiday over 10 years ago due to facilitating other people's holidays .

And, yes, most of the work is tedious. But (for me), it's better than having a proper job.

@TonTonMacoute

I live in Cornwall and know several people with holiday lets. They range from a farm cottage to a huge family holiday house in a very popular and ultra hip seaside location.

I think the big seaside house probably makes a profit but the owner spent an absolute fortune on it to bring it up to spec. She keeps it because it has been in the family for years and so there is a big personal attachment, the whole family use it several times a year to get together and I think she only needs to make enough profit for it to pay for itself.

Buying holiday lets as an income would be very risky, it would take a long time to pay back even a small mortgage. You would have to service it yourself, which, as someone has said upthread, means working every weekend through the holiday season. Advertising it on websites can also chip away at profits. The ideal is to build up a set of guests who keep coming back.

Also bear in mind that communities in many pretty areas are beginning being to be harmed by the explosion in Airbnb, second homes and holiday lets, so there is a risk that much higher taxes and extra levies will be imposed soon. I think you would need to bear that in mind

I agree, bloody holiday homes are killing the local community and making it impossible for the next generation to buy homes in their communities. I applaude areas which double/tripple the council tax for holiday homesI really do.

@Merrymouse

They're not! You're overlooking a cost - the opportunity cost.

No.

Opportunity cost is taken into account when assessing whether to go ahead with a project. If the money could be invested in shares or property and ROI is £6k a year either way, then both investments give an equal ROI.

The existence of an alternative project does not mean that neither project is profitable and HMRC certainly won’t see it that way.

I think you are saying that you need to consider whether it would be better to invest the money in something different and just e.g. rent a ski chalet yourself once a year, which is fair, but the OP is about the ROI on holiday lets, and people are just answering that question.

I see what you mean @Merrymouse.

And you're right, in most cases (and certainly for us) I would rather separate sensible investments from holiday provision. In other words invest the money somewhere better and then use the returns to fund holidays. Not least because then you can choose where to go!

I do the Spanish translations for a friend who has 2 places in Granada...she inherited them and doesnt speak any Spanish...they make a small profit....enough to cover taxes etc but she wants to sell soon and the prices are low...she wont have made much capital over the years of ownership....also assist a friend with a place in Benidorm...has to let it very cheap as lots of competition and when selling will lose about 20% as prices have dropped and lots of new builds to compete with.

I agree, bloody holiday homes are killing the local community and making it impossible for the next generation to buy homes in their communities. I applaude areas which double/tripple the council tax for holiday homesI really do.

I'll forward your comments to my cleaner then. She runs a business cleaning holiday lets. I'm sure her staff won't mind losing their jobs. Unfortunately there is no other work locally for them to do that they can fit around school hours.

I expect my gardener won't mind losing all her jobs too.

Of course with no work they'll be no prospect of them being able to buy all these closed FHLs so they'll be bought by incomers who want to retire there. These incomers will put a strain on the local health services and contribute very little to the local economy. They won't be visiting the tourist attractions nor will they be eating out most nights of the week like people on holiday do.

Comments like these are naive in the extreme.

A family member has multiple holiday lets in the U.K. They make approx £40,000 profit per year. But it’s their main job now. They are ‘selling’ a certain lifestyle stay and spend a lot of time marketing that. The properties are also very close to their home.

@CaptaNoctem

I agree, bloody holiday homes are killing the local community and making it impossible for the next generation to buy homes in their communities. I applaude areas which double/tripple the council tax for holiday homesI really do.

I'll forward your comments to my cleaner then. She runs a business cleaning holiday lets. I'm sure her staff won't mind losing their jobs. Unfortunately there is no other work locally for them to do that they can fit around school hours.

I expect my gardener won't mind losing all her jobs too.

Of course with no work they'll be no prospect of them being able to buy all these closed FHLs so they'll be bought by incomers who want to retire there. These incomers will put a strain on the local health services and contribute very little to the local economy. They won't be visiting the tourist attractions nor will they be eating out most nights of the week like people on holiday do.

Comments like these are naive in the extreme.

www.bbc.com/news/uk-scotland-highlands-islands-54028339

Naïveté can go both ways.