House with self catering annex advice

[Glendaruel]

Hi

We're looking at getting a larger property and a couple have caught our eye that have an annex, often an old workers cottage attached on to them. We think running it as small self catering business would work quite well for us, but as part of research would love to hear others experience.

Also, any advice on getting mortgage on this kind of property would be helpful.
Thanks

Location location location.
A friend rents out her spare room on airbnb with good % occupancy but she lives within walking distance of Edinburgh Castle.
You also need to have somone to do cleaning and changeover if you're not going to be able to do this yourself

We offered on a property like this and the only mortgage we could get was at the most horrific rate of interest from specialist broker that we withdrew. The issue was 2 working kitchens - we intended knocking through the wall and making it into one big property anyway so we asked the seller if they would remove the sink and hob (not a massive job) as this would satisfy the lender but they refused they ended up accepting a smaller offer from someone prepared to pay the crazy mortgage - it wouldn't have cost them the £5k to remove the second sink and hob but their loss!

If you do want to go down that route you'll need to use a specialist broker - most IFAs apparently don't touch that type of mortgage.

We have an annexe and our mortgage is with first direct. I had read a lot of comments like previous posters and was expecting a challenge but first direct who I approached first had absolutely no issue and the advisors seemed to find it weird I was even asking.

No advice on the business aspect - my 23 year old DS lives in mine!

Thanks this is all really useful! Will have a look at first direct

I have a house with an annexe which I rent out on Air BnB. Location, location location is never more appropriate than this. Mine is in Cornwall and I made £22,000 last year. It cost me £25,000 to do up the annexe as it was pretty crappy.

I went for luxury, so have put pretty high end stuff in it. I carved off a part of the garden and fenced it off for them- I think this is really important.

You could have a normal residential mortgage and just not tell them you are renting the annexe out. Plenty of people do that. Or get permission to rent it out on a residential mortgage. Go to a broker- they will know which lenders allow Air BnB.

Cumberland Building Society do part residential part commercial mortgages.

You will probably be rated separately for council tax on the annexe. You would pay business rates on the annexe, in which case you would be entitled to Small Business Rate Relief.

You can offset a lot of expenses against tax as a Furnished holiday let. You need to use a specialist accountant.

It has changed my life beyond my wildest dreams- best thing I have ever done!