Looking at buying a holiday let

[Ellebel]

Hi, I live in London and have recently inherited some money, enough to buy a second property outside of London. I am considering a few places but Folkestone and Rye are both high on the list. The idea is we would use it lots as a family and also Airbnb it. I need it to bring in a decent income to be worthwhile.

Wondering if anyone on here does similar and has advice? I would need it to be managed by someone more local rather than myself. Not sure how hard and expensive it is finding companies/ a person to do that is?

I know laws are constantly changing around Airbnb so also not sure if it’s too big of a risk. Also know lots of coastal towns are fed up of people like me coming in and buying holiday lets so not sure if the neighbours would all just hate me and my family every time we did come and stay!

Any advice much appreciated.

Your returns would likely be far higher simply putting in a stockmarket tracker investment fund.

It sounds like - in the nicest possible way - that you aren't hugely financially savvy so may I recommend https://octopusmoney.com/?

They have money advisors who can talk you through what you want to achieve with your finances and hand you on to regulated financial advisors if you really have a lot of money that needs complex management. But unlike a lot of advisors, they are aimed more at regular people rather than those with £500k + to manage

Yes, we'd hate you.

Rich Londoners swallowing up properties for their own occasional use, plus air BnB 🙄 is greedy, immoral and destroying the fabric of loads of small towns.

Definitely wouldn’t buy in the UK. Holiday homes abroad are different, they’re often purpose built and aren’t of interest to locals. You can generate an income from a foreign holiday home with a clear conscience.

However, be warned, you will find your friends expect you to rent it to them at mates rates. Worse, they’ll want to visit you when you’re using it, so you’ll end up hosting someone else’s cheap holiday at your expense.

You have to be business-like about second home ownership. Otherwise you will be taken for a mug.

I'd be wary of this. It's likely that s.21 Housing Act 1988 will be amended, sooner or later, so that you can't evict for no reason. And in that scenario you could end up with what used to be called sitting tenants, making the property value plummet.

https://www.amazon.co.uk/Investing-Demystified-Speculation-Sleepless-Financial/dp/0273781340

Debt laden local councils love it though because they can milk extra council tax.

If Liebour can steal £500 from a hard worker, and give £100 each to five feckless wastes of space, they'd lose one vote and gain five votes. This I believe is exactly what's going on now. Criminal, in a word, but how can they be stopped ?!

Are you commenting on the right post? Because it doesn't seem so 😆

I am a property developer in the SW and I’ve got a number of properties to I rent out.

I did have a couple of properties that I converted into holiday lets that were in tourist locations but I converted them back within two years.

I was local so managed them myself but if you employ someone to manage, this eats into your profits. If you private let to a tenant then you wouldn’t really have this issue - as you wouldn’t have to employ a cleaner to do the changeovers.

There isn’t much housing stock as it is, if I was you, and you want to invest in property, Private let is the way to go.

you are guaranteed an income all year round whereas it’s a risk with occupancy for a holiday let.

Answering the actual question rather than piling in with a load of opinions 🙄

We have a second property for this reason. Some neighbours not delighted but in the area we bought the real villains are the second home owners who literally just use their place for a few weeks each summer and leave it shuttered up the rest of the time.

We price dynamically so it’s really cheap out of season so it’s in constant use.

If you do need a mortgage get the above board one, obey all planning and local rules etc. Unhappy local people will be looking for a reason to report you.

We thought we’d let mates use it but actually haven’t been able to do that as running costs are high.

Anyone talking about bad yields is right of course. But we haven’t done it for yield, we’ve done it for free holidays and a property that pays for itself.

We use a local management company. If you were looking in somewhere like Folkestone or Rye there would be loads. We’re not either of those places but between deep cleaning and laundry service, every stay costs around £150 just for the changeover, then there’s taxes, utilities, upkeep. Needs redecoration every 2-3 years (lots of wear and tear), bedding and towels regularly needs replacing. We’ve had a tv smashed, a sofa broken, keys lost and locks replaced. These things are manageable but just factor into your numbers.

I’d also say - if you’re looking in Rye or Folkestone - anywhere easy for London, good luck 🤣 - we were looking there, we had a good budget and ended up having to go much much further away as property is so hard to come by.

There is more than plenty housing stock, there will be more downward pressure on sales as less people come here to live and work.

https://www.lse.co.uk/news/press-uk-home-sales-fall-to-lowest-level-since-financial-crisis-elqtl1hjwals74g.html

Lots of people got into rental because they were allowed to borrow loads of cheap debt to do so, many didn`t really think it through very much or anticipate the political shift against globalisation that is taking place. The stock market is like cake you have to pay for with your own money, BTL debt is like free cake if the rent covers the mortgage, of course things can get choppy and people who eat cake can get sick so if you already HAVE the money you don"t need to dive into property at this stage of the cycle with all the risks and legal pitfalls because you already have your cake!