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AIBU?

Share your dilemmas and get honest opinions from other Mumsnetters.

Original poster

Who's right and wwyd?

97 replies

Harryhenderson10 · 08/09/2020 11:02

My DH and I are having an argument at the moment and I could do with MN to give some solid advice on wwyd.

So you have £110,000 in savings.

You live in a property that has a building that could become a holiday let. It would take all of the budget and maybe a little more but it is in a pretty popular tourist location.

Or would you do something else with the money?

The savings need to at least stay the same in value over the long term and preferably give a monthly amount of income.

One of us thinks a holiday let will give an income per week and add value to the property longterm.
The other thinks it would be easier and less hassle to invest in shares, but honestly I don't see how this will generate nearly as much income as a holiday let?

What would you do?

OP posts:
peonyred · 08/09/2020 11:59

The stock market is a bit like the Wild, West at the moment and not for the faint hearted. Savings accounts are offering very little indeed, premium bonds should offer some returns, but nothing substantial unless you win, of course. With a hundred thousand you should statistically win something (25 quid being the lowest win) most months. AS another poster said, you need to make an appointment to see an independent financial advisor, you will have to pay for their time, and you should, to ensure you get independent advice. Look for someone registered by the FCA with a certificate of Financial planning.

MulticolourMophead · 08/09/2020 12:01

OP, there could be other ways to make your money work for you, that you haven't considered, another reason financial advice is a good idea.

Cocomarine · 08/09/2020 12:01

Another WWYD option...

What is your home like, for letting out?
Is it just you and him, or are there children too?

I would consider putting a caravan on site, keeping one room lockable in your home for storage, and letting out your house for a season. You move back in during unlet weeks. You get a real feel for whether you like being holiday landlords, and most likely make some cash whilst you decide.

Chchchchangesarecoming · 08/09/2020 12:06

A holiday let is a business with related requirements and obligations, laws to abide by and comes with an investment of time, attention and care. Shares are an investment which come with some risks but these are generally low over the long term.

These 2 things are comparable. All depends on whether you want to set up a business or not.

Cocomarine · 08/09/2020 12:07

Although I agree with those saying talk to an IFA, I would do a lot more research and talking first.

An IFA can’t advise you on how you’ll feel if a neighbour complains that your tenants are noisy. An IFA can’t tell you whether your husband would commit to the join enterprise then expect you to do all the cleaning - as it was your idea. An IFA can’t tell you how you’ll feel if your share portfolio drops 20% in a week - happened to me in Covid. They will of course talk to you about your risk profile - but it was only me that knew that my personality and age meant I could breathe deeply and say, “this means you’re buying low, it’s OK.”

My posts probably sound anti-let. Actually, I’d definitely consider it - but not with what sounds like your entire life savings, and £110K at that. I’d definitely test the water with a shepherd’s hut type thing first.

Giraffey1 · 08/09/2020 12:11

There is no right or wrong here. Both are valid possibilities. Why don’t you both explore both avenues, do some research, talk to an independent financial adviser, and then see how you feel about things,

MikeUniformMike · 08/09/2020 12:15

Could you make the building into flats stunning apartments and let them out as homes?

vanillandhoney · 08/09/2020 12:16

Nobody's right or wrong, you just have different opinions.

However, there is no way on earth I would run a holiday let on my property. Not a fucking cat's chance in hell.

suggestionsplease1 · 08/09/2020 12:17

Financially, the holiday let EVERY time. Everything is still far too risky with stock market, and with premium bonds, well, if you were outrageously lucky you might hit the big time, or you might just get around 1% back each year.

But, there is a lot of work to factor in for the holiday let, and you have to be like minded and up for that...otherwise, worst case scenario, it could destroy your relationship.

Peachy1381 · 08/09/2020 12:17

One is a job the other is an investment. Both have a certain amount of risk. I'd probably invest myself but mainly because I've no interest in working as a holiday host.

HorsePellets · 08/09/2020 12:20

It sounds like neither one has done anywhere near enough research to have anything like a solid basis to have this conversation

anniegun · 08/09/2020 12:22

a diversified investment portfolio carries less risk and is much easier to manage. A holiday let is great if you really enjoy cleaning up after people and are happy to run the risk of an uncertain business, difficult guests and lots of work

ThumbWitchesAbroad · 08/09/2020 12:22

Holiday let might bring in more income BUT it will also be a higher risk in terms of property security and damage (some people are disgusting!), plus work in terms of cleaning, repairing, advertising and so on - plus you can't guarantee it would be fully let, so you'd have blank periods on the "income".
Plus insuring it adequately, of course!

My husband had bright ideas about turning our relatively unused garage (by his standards, we still use it, just not for the car!) into an Air BnB flatlet - but he failed to take into account the amount of work that would entail on an ongoing basis.

So we're not doing that.

PerveenMistry · 08/09/2020 12:22

What is needed to make the building habitable? 110K seems massive.

Polnm · 08/09/2020 12:23

Are you mortgage free?
Would it be a discrete dwelling ?
A house with an annexe that rents out might be hard to sell for what you invested and you can’t always get retrospective planning to separate. Do they have separate access? How much will it devalue your house? (If will)

OoohTheStatsDontLie · 08/09/2020 12:23

There is another thread about holiday let's at the moment.

The general consensus was it's a lot of work and to make money you have to do the weekly changeover yourself and deal with all holiday queries (middle of the night calls etc). Also wear and tear and breakage and insurance and heating and utilities etc costs are all much higher than for general renting. People were saying the only financial benefit was getting free holidays which wouldn't apply in your case.

I'd invest in something else personally unless it's always been your dream to run a b and b or something

Pobblebonk · 08/09/2020 12:27

£110K seems a lot to spend on converting a property into a holiday let. Are you virtually going to have to rebuild it?

I don't think I can add much to what people have said upthread about doing your sums re what sort of money you could make and how much this would add value to the property, and also thinking about the hassle factor.

One of my lottery win fantasies is buying a property in our favourite holiday destination and letting it when we're not there. But that would be strictly on the basis that we turned over all the management, cleaning etc to a local company so that it would be no hassle to us and we wouldn't have to deal with the people renting the property at all.

cooldarkroom · 08/09/2020 12:28

Holiday let is a business, it involves more than cleaning on Saturday. There are tax returns, there are contracts, deposits to be returned, constant enquiries to respond to, cancellations, phone calls when they need a info, or want a restaurant recommendation at 9pm on a Sunday. Nice people & often very unpleasant people, grass to cut, hedges to trim, keeping your kids relatively under control.
You need to be discreet constantly, learn to grit your teeth when the holiday makers leave the lights on all day, or find fault or indeed trash the place.

On the other hand, my brother has discovered he cannot retire this year, as one of his pensions were put in shares, & they are currently worthless ....

lyralalala · 08/09/2020 12:33

Is the one who prefers the holiday let option the one who'll be doing all the work?

HazelBite · 08/09/2020 12:33

My SIL did this she had a small barn attached to her property and had it converted to a holiday let using an inheritance she had received.
She registered with an online company and initially used to do all the handover cleaning herself but then got a couple of local women to do the cleaning etc between them.
When my nieces both left home she moved into a caravan and let out her house and the barn for a few years during the summer season then moved into the holiday let permanently and let her original home out all year round.
She has since sold up and moved out but got back her original investment in the barn twice over.
She found that she had to have an emergency fund to replace things that got damaged in the let (I think she had to replace the TV a few times)
I would suggest you talk to someone locally to work out how much you are likely to make and how long your season would be.( SIL found Christmas lets very popular)
The stock market is always a bit of a gamble, good luck with what you decide!

Witchend · 08/09/2020 12:34

£110k for holiday lets.
Let's say you can rent it out for around 20 weeks a year. That's probably on the generous side.

Let's say it's really nice and you can rent it out for £2k. I wouldn't pay that a week, but we don't go to heavily popular places, but we look (for a family of 5) for between £400 and £800.

So each year you get £40k gross in for holiday lets. Sounds good, you'll pay it off in 3 years.

But: You have to pay for cleaning, repairs, gardening, your time, insurance, tax etc.
Realistically you're probably making around £20k. Now it's more like 6 years to pay it off. And you've had to put in a heck of a lot of time and effort.

I suspect it isn't worth it.
I know from people who do holiday lets, they don't do it (with one) as a profit. It's a way of keeping that second home and it sort of paying for itself.

I'm on your dh's side.

jackstini · 08/09/2020 12:37

What state is it in to need to spend £110k on it?

Is it going to raise the total value of your property in future?

Could you just let it, rather that holiday let - far less work!

Shares take either constant looking at or paying a decent management company...

MsEllany · 08/09/2020 12:40

Don’t think I’d want to hassle of a holiday let tbh. Long term let would be fine.

BlueJava · 08/09/2020 12:40

I'm really surprised at the number of people saying invest in shares. I'd be vary of shares at the moment unless you are experts at trading or will have someone managing this for you. The financial markets are extremely volatile at the moment due to Covid-19 and whilst you could make money you could lose a lot as well. If you do go down the shares route you'd need a balance portfolio of risk to try and protect your capital. Maybe consider using a wealth advisor and investing in bonds if you don't want the work of a holiday let.