Buying property with annexe - can we Airbnb the annexe ?

[EezyOozy]

Hi all,

We are very interested in a property - its fairly rural and perfect for our family and it has a 2 bed annexe. The annexe is adjoined to the house and the current owner seams to use it for storage mainly (!) but it has a bathroom and 2 bedrooms. It's a detached house with no close neighbours... the annexe needs some updating and I'm looking into converting one of the rooms to a lounge/kitchen and renting it out on Airbnb. The garden and drive layout is such that is could have a separate drive and bit of garden too.

Has anyone done this ? Are there any glaring pitfalls I am missing? I'd be grateful for any pointers / things to look out for from those with experience - I've not done anything like this before!

I have two children and thought (perhaps naively) that if it's a fairly small operation I could do the change overs myself for some income .... it's a very beautiful area so eventually (obviously not in the midst of the Covid pandemic) we could have it presentable and rentable.

I'd need to look into into buildings insurance (I think there are some providers that allow for Airbnb use in an annexe) and I guess public liability / business insurance ? My husband is self employed so I'm hoping his accountant could advise up about the tax side.

To me this idea seems to make sense ... maybe there are things I've not thought of though! Thanks 😊

You will to check planning permissions- what was stipulated when the annex was built/created. That sort of thing

Of course!

It is quite a bit of work, not to be underestimated, but you could also let it out as a long term rental too.

I've done both but prefer long term rental as it's less hassle and consistent income.

Thank you for the speedy responses. I will check out the planning permission- I think that should be in the public domain but can always contact the local council.

@DiesalFive - thanks for your comment. Was it an annexe you rented out ? Would you say the Airbnb thing is worthwhile ? I was thinking of Airbnb as we may, at times, wish to use it for extended family and I'd quite like the flexibility... it's also quite small.

OP beware if you are installing a kitchen in an annexe you may fall foul of planning. Our last property had an annexe but which was “ancillary accommodation” ie further bedrooms, bathroom and sitting room but was not allowed to have a kitchen. A kitchen makes it a separate dwelling and we couldn’t get planning for that. If you are only at the buying stage make sure you get your solicitor to clarify how the annexe is classified by the council (for instance does it have its own council tax bill?)

In terms of insurance we used NFU mutual who were very good - as you’ve already picked up some ordinary, domestic insurers don’t cover holiday lets. NFUs cover included the usual building & contents, cover for theft etc by guests (!!) and also third party liability.
Good luck!

Yes AirBnb is worth it - why don’t you have a look on their site to see what cottages/ annexes go for in the local area, to get a sense of what you could make. Changeover for a two bed is very doable by the way! You can always leave yourself a whole day between check in and check outs if you’re worried it’ll be too much.

Thanks @Daisydoesnt I'll make sure I look into all of this properly.

I've just looked at the Home Report again (Scotland) and , if I understand correctly, the annexe was originally another tiny cottage. Around 60yrs ago the owner of the "main house" purchased the cottage and it all became one property... that's all I know at this stage. I'll contact the relevant council to check it out.

(It's on the edge of a small hamlet. So there are other houses dotted about but nobody really close though).

OP I wouldn’t contact the council - you’d be better off asking your solicitor to check it out when he does enquiries. It might be for instance that the council aren’t aware of it and it doesn’t even pay council tax!!

Ah ok 🙈

We have an annexe and the planning office told us no. We also couldn't do certain alterations to it. You need to check very carefully. We also had a nightmare with bills because the previous owner had it set up as a separate address for council tax and we got two different bills for that an electricity, water etc. It's turned out to be a very expensive dog house that we don't use but have to pay to heat

See - I need to be on this forum ! I actually find the whole thing quite exciting , but don't want to get ahead of myself (haven't even bought it yet but made an offer which we think will be accepted).

@parsnipsnotsprouts oh no , what a nightmare ! What were the grounds for the council saying no? (If you don't mind me asking).

I'm not sure if this makes a difference but this is all classed as one property ... it has an internal door on the ground floor (which i was thinking or replacing with a locking external type door, so that if family come
It can be left "open"). The "annexe" has its own staircase etc, it's really ideally laid out to be self contained.... but then if we add a small kitchen it might be classed as a separate property (even with internal door)?

(Not trying to get out of paying council tax on it... if we made changes that made us liable for the extra tax then we'd have to pay it). It's definitely classed as one dwelling atm.

It's turned out to be a very expensive dog house that we don't use but have to pay to heat

Ha that’s made me laugh!! I totally get where you are coming from.

OP I absolutely don’t want to pour cold water on your obvious excitement but you do need to think very hard about this, especially if the annexe is something that wasn’t on your original wish list. There will inevitably significant additional maintenance costs, and whilst yes you will be able to make some money from Airbnb, holiday letting is hard work, time consuming and you do have to invest in it to keep the place well decorated and in good order.

We’ve actually just moved (last month) leaving an amazing home that had a holiday cottage and an annexe. It was a wonderful place to live but it was expensive to maintain, and hard work and quite often a lot of hassle. We very deliberately chose the house for the holiday lets so it was something we went into with open eyes.

I would absolutely buy that house if I had my time again, but for our next home we are definitely NOT going to have anything with an annexe.

Thanks @Daisydoesnt, yes we do really need to look through it all very seriously.

@hassletassle can't remember properly now. Think it was something to do with some work that had already been done and it had been stipulated in that planning permission that you couldn't do any more to it. Our solicitor missed it in the searches.
Also you need a really good boiler to support both properties so check that. If it's got an old one it'll probably need replacing

@parsnipsnotsprouts thank you. It definitely needs a new boiler 🙈

We started air bnb on our garden facing ground floor spare room (part of house but separate entrance from rest of house) earlier this year.

We live in arguably one of the best UK areas to do jt so I initially had hopes we'd make enough to cover our big annual holiday (hollow laugh as now rescheduled for 3rd time). I think we quadrupled that in 3 months.. I was amazed.

It's incredibly easy. I extended my insurance policy, bought some health and safety bits - fire extinguisher, first aid kit etc and invested in some new bedding, decor etc. Covered costs in first 2 weeks. Tax is covered under the rent a room exemption up to £7500 per year.

You get the odd awkward customer but most have been fab. I got slick at the cleaning and sanitising and invested in 2 of almost everything so I could do a proper switch of equipment each time.

Another thing to check is if there are any timeline limits on such lets in your area. In London, the max is 90days per year with hefty fines if you go over.

Its very early days, but think about what guests would come there for? We stay in Air bnb and similar quite often (well used to!). Would they stay so they can visit friends/family nearby? Are there any attractions nearby? Annual events? The beach, a zoo, castle, national parks, special restarants, shopping areas etc? If there are specific things - say bike tracks, walking trails etc, you might be able to advertise in specific interest magazines or websites. Best of luck x

@christmascarly ah that's so encouraging thank you ! I need to get my head around where this "annexe" falls legally (own entrance, own staircase, would have its own bathroom and kitchen)... almost definitely a self contained dwelling despite internal door. That's ok though providing we are actually allowed to do it (will check with solicitors if/when get to that stage). Good tip about having two of everything! Thank you

I would do it 100%
You can set your calendar so you choose when it's available, you can definitely do the changes yourself and you can make decent money for very little. Airbnb have their own cover but look into it so you know what's covered. Don't put a full kitchen in but you can put a fridge, microwave and kettle if you have a sink and surfaces.

@christmascarly good point about fire extinguishers etc. Are there special guidelines about fire safety? I'm generally pretty careful about stuff like that (we have loads smoke alarms and CO2 alarms, some extinguishers etc). Actually come to think of it I think Scotland are making hardwired/linked fire alarms obligatory soon ...

Don't put a full kitchen in but you can put a fridge, microwave and kettle if you have a sink and surfaces.

That's a good idea.

I stayed in an Airbnb with an air fryer and microwave on the worktop, which was fine IMHO. What about a washing machine in cupboard under stairs ? That's not part of a kitchen is it...