Holiday cottage - advice?

[Justgettingon]

Hello - looking for some advice on this. My elderly father owns a very small, very old cottage in a a lovely scenic spot in the UK. It is in a very remote, rural area. It looks like he's going to transfer the ownership of the cottage to me as he can't really deal with it any more. The house has been owned by generations of our family since the late 1960s - my grandparents used to live there. It's lovely to stay in and for us as a family it holds many memories.

The house is very definitely in need of some tlc however - some fairly significant work on the electrics as well as a complete cosmetic makeover. There's no way that we could rent it out as a holiday home in its current state.

If I'm honest there is an ongoing debate as to whether we should keep the house and have it for family use or we should just sell it. If we put it on the market i'm pretty sure it would sell for a modest amount, but i'm 99% certain it would be someone who professionally rents out holiday lets who would buy it and turn it into an Airbnb. That's what has happened to other houses locally which have sold in the past few years. I would be really sad to see it go, but I can also see that the 'sensible' option, might be to sell.

The other option, I guess, would be to put some work into the house to get it to a better standard and actually try and rent it out for some of the year so that it is lived in a bit more and we get a bit of income from it. But I think that would take at least £10k - money which I don't have at the moment! (i'm not short of money btw, I just don't have a spare 10k hanging around...)

Just wondering if anybody else has found themselves in a similar position and what advice they might have?

You could put it on the market and see what response you get OP? You don't have to seil it to someone who wants to make an AirBnB out of it.

The idea of a holiday let is a nice one but the reality is that the property will need a lot more ongoing maintenance, and will get used/abused by people who don't care if things get broken/damaged. I would spend the money getting it a bit more up together then look at a long term let while you make a decision on it. Could you keep it as a retirement plan?

What is the council tax? Do you have to pay extra as it is a second home? Insurance is expensive for holiday homes. Lots of extra costs for you to pay if you keep it!

We did something similar with a small cottage in north Wales owned by an elderly relative. Very scenic. It’s let professionally now and it’s difficult for any of the family to stay there except in the dead of winter, because it’s always booked. After all costs it makes the tiniest of profits - maybe £2k or £3k a year. If we deducted the value of family time spent on it it would probably make a loss.

If you go the holiday let route, don’t expect to make a big profit, and don’t expect to still have lots of lovely summer holidays for all the extended family.

My initial thoughts are that holiday letting is a bit of a pain in the neck unless you use a specialist company and cleaning services. Do you actually want to run a business in holiday letting? If so then putting the money in will be a business investment. Letting is also stressful as you are having to deal with every little thing that comes up or chase funds or find reputable trades people who will come out to fix things. Again, if it’s a business you want to get into then great but if it isn’t, it’s time consuming and stressful.

@canyon2000 we will have to pay double council tax as its not a main residence. Fortunately its band A but thats still a big expense. I guess we save on holidays though!

Any possibility of a year round rental? You’d have to fix it up initially. I used to holiday let a cottage overlooking the sea but it was very seasonal. So when I was approached by someone who wanted it year round the figures came out similar plus much less hassle for me. They stayed ten years and it now needs a revamp for sure. But it felt good that it was fulfilling a local need and I have had some capital growth. I’m going to sign it over to my son once I pay off the mortgage. I don’t want to sell it.

Borrow against the house and do it up, then rent it out as a home not a holiday home.

@AlastheDaffodils thanks, that's interesting to know. I'm not worried about making a profit from the house, tbh I don't actually mind if we lose a bit of money every year, I just want to minimise the cost.

For those who suggested long term rental - its a good idea, and it would be my preference as I think its a much better thing all round to provide someone with a home, but the honest truth is that in the area the cottage is you'd be very unlikely to find someone to rent long term due to the location. It would also mean that we wouldn't be able to visit at all, in which case I may as well just sell it.

If it's put into your name you can take out a small mortgage on it and use the cash to get it up to spec to let out. Holiday let's are very lucrative. You can also ask a company like Sykes Cottages to rent it out for you and do a fully managed service. Just tell them when you want to use it. They would also have a person look around and suggest what changes you'd need to get done. They do this for free if you let with them. They will also give you an income forecast to help you get a small mortgage on the property.

@Justgettingon , I think you'd be astonished as to how much demand there is in rural areas.

You don't have to let it for a long time, but renew the let until you need it.
You might find that a young family might want a home for 3/5 years or something, or a couple are separating but both want to stay local because of co-parenting.

Two sets of relatives of mine had similar situations after their elderly parent died. One set had a lot of interest, mainly because of the lack of any houses to rent in rural areas.
The other rent it out as an 'airbnb' type let.

The market isn't particularly good for selling right now.

You need to research carefully the safety and other requirements for a property to be let out (for any purpose) eg mains powered smoke alarms, gas and electricity safety certs etc. Then think about the cost of furnishing and equipping the house to a standard that would be acceptable. Then Think about the cost of cleaning, laundry, utilities, maintenance (do you have in hand plumber, electrician etc in case of emergencies). Then think about your income tax liability. After all that does it still sound worthwhile?

If you let it as a holiday cottage how easy will it be to find weekly cleaners, window cleaners, gardeners and tradespeople?

Have you thought of trying to get the house renovated very cheaply by using one of those websites like Workaway where you offer accommodation in exchange for work on the property? DH and I have worked as a gardening/handyman in exchange for accommodation everywhere from NZ to France. If it's in a lovely location you might find people willing to snatch your hand off for a few months rent free accommodation.

I think this is the same for many rentals, however it is done. The increase in the resale price is where the money is made. Profit on a day to day basis goes back into maintenance, insurance etc.