Holiday let business Vs teaching. What would you do?

[Handy123]

I taught secondary for 7 years until the birth of my third child in October last year.

When I went on maternity for my last position, I was in a temporary contract (switched jobs for something closer to me) so there is no job for me to go back to.

We are in the position to invest money in a business and we live in a touristy area by the coast. (Inherited a small lump sum of cash that I would be using as deposit for mortgages) I've been considering buying 3-4 holiday lets and running them as a full time business. I've taken a lot of financial advice and would be going into it knowing that it will be hard work and of course with an element of risk. I want to manage and clean them all myself as the figures don't work out so well if it is managed by another company.

Is this the right thing to do?

Things I've been considering:

• Holiday let business does give me the flexibility to be there for my children a bit more, instead of constantly missing their nativity, or assemblies etc.

• The overtime in teaching has got crazy recently, and I frequently used to work until midnight in the evenings, and one day every other weekend. I have an autoimmune disorder which is not great when I get stressed.

However:

• Is it silly to come out of a good career (I can only describe the last few years as 'patchy' on my CV as I have taken time out to have my three children and switched areas/ jobs etc) and I think if I did this now, I would not really be able to get back to teaching much later if holiday lets didn't work out.

• I feel as though I get a lot 'emotionally' from work, with colleagues often becoming friends etc. I feel very lonely from time to time and if I run a holiday let business, I will be working on my own all the time, probably rarely even meeting the guests etc.

• Whilst it is possible that for a few years and when the children are small, this could work out well for me, I might regret doing it when they are older - it will eat into the summer holidays which I could otherwise get off in teaching. Also, once they are in full time school and not so little, things could be easier to manage if I teach.

I'm not considering doing both on a P/T basis - it just wouldn't work.

Thoughts?

100% holiday lets.

Even with a patchy CV a little bit of supply teaching would reopen a lot of doors when people see your worth. Good teachers don’t stay on supply for long because schools don’t want to let them go.

Teaching is so time consuming, and not family friendly at all. My most balanced teacher colleague friends are those with 50/50 custody of their dc, they work like mad when they live alone, and claw back some family time when they have the children.
I did suggest it to DH but he want too chuffed!

You restrict your guests a lot with set days. We have just one rental. It’s been rented all different days this summer. Min 5 night stay, but some stay 3 weeks. They wouldn’t stay 3 weeks if restrictions on set arrival and departure days.

Also, are you planning to put youngest in nursery? My Ds is 1 year, and I clean and manage our rental with him. It’s takes forever, I do majority when he naps or in evenings when he’s asleep or after dh finishes work. Luckily it’s all on same site as our house so it’s possible. I couldn’t do 3-4 with child, off site. Usually it’s me mopping floors at naptime and then ironing bedding at 10pm at night.
The most I can realistically do with him around is bedding on and off.

Just reading your post you sound happiest Re teaching. Would the holiday let’s allow a pension comptable to your teaching no pension ? Have you factored that in?
I don’t think you’d be able to do changeovers yourself for so many and partic not if ll same day or you are doing shorter Airbnb letting s - it’s a huge amont of work as you know.
Hmmm good luck whichever you do.

Teaching is a secure, long term profession.

Holiday lettings are fine at the moment due to travel restictions/staycations, etc., but the market is getting saturated. Just because you can demand top dollar and be full every week at the moment doesn't mean it will always be like that.

You need to really consider your area and type of property. If there are already large numbers of similar holiday lets, you could have problems in future years competing against them.

My gut feeling is that Air BNB, holiday lets, etc., are currently at the peak of the bubble. Lots of people will be desperate to get back to foreign holidays next year and the year after.

I’m sure there are geographical differences but locally it costs 100 quid to flip a holiday cottage using one person they take the linen home and launder/ iron. Add on 50% for an agency. Stuff gets missed which builds up over time.

I can see why it’s tempting and you can earn decent money but it’s not always guaranteed and you have unexpected expense. I’d start off with one and teach part time. Flip it on a Friday if you can. Saturday if not. Get a cleaner in to work along side you cuts the time in half but you can catch any missed bits. Consider your market, is it family friendly? That would guide me on linen choices etc. I do lovely white billowy linen from soak and sleep but it costs me at least a grand for the season. It’s not really worthwhile doing breaks November to March apart from Christmas/ New Year for me due to high heating costs and lower rates.

I run a business - I have worked in multinationals and have a business degree. Even with all of this - it is HARD work (lots and lots of red tape and admin). This is in addition to the main work of the business.

I dated a guy whose dad had loads of apartments which he let and my BF helped his dad out by doing all the repairs and generally being the guy they called to fix stuff. Well, he was always on a call out - and he had no part in cleaning or in collecting rent or in "welcoming" guests as these were long term rentals.

Could you take a career break for 12 months and then return to teaching? Or just teach part time or job share for 2-3 years until your DC are older? And don't forget the pension issue.

Also, remember the cost of servicing the mortgage - will you really make enough after mortgage repayments to pay yourself a decent wage for the time you will spend cleaning (and washing laundry).

I think this has all the potential to be just as much hard work as teaching, except the work is drudgery and without any of the satisfaction or professional stimulation. Or company. There will still be loads of out of hours issues to deal with and you'll have no control over what they are/when you deal with them.

Plus it fits with family life worse, not better than teaching.

@LegendaryReady

I understand completely that teaching's not flexible, but you'll go from having school holidays off to being at your busiest in holidays and at weekends. I'm not sure that equates to more time with DC.

Thats exactly what I was thinking. Your busiest times would be when your kids are off, so bang goes any family holidays.

Unless you can afford to pay a full-time manager I think the Let's would be a tough business not to mention the random stuff that would need done, fixing stuff, replacing stuff.

Ok, so you would probably be around for the school runs, but you will be busiest when the kids arent at school?
Dont do the holiday lets without sufficient assistance. I've taken a massive paycut to go into support staff at school purely for the holidays - DH has the flexibility to cover the PD days, and assemblies etc, although since we returned to the UK 2.5 years ago, there has been 1 event, and I think they will be thin in the ground this year too.

I would buy the holiday lets, make the fully bookable in whatever combination of dates to keep them busy, and hire a cleaner. Teach PT or do supply. Cleaning 4 holiday lets is pure drudgery and you won't really be able to do anything at all with your children while you're doing it. Plus, if someone else is cleaning and you're teaching PT, you still have your breaks with your children and enough time to stay on top of your letting business.

As an ex teacher who has thankfully escaped ld choose the lets over any form of teaching.

Some group I’m in defined teaching as a woman. Always trying to please, taking on more and more. Ugh.

And someone on here defined it as an abusive relationship.

It’s a no brained to me!

You are buying them through a limited company though- not as an individual?

I do both. Never stopped either. Covid was catastrophic for many owners. Could you pay all your mortgages without rentals?

I use a cleaner and a service for the sheets.

If you don't, you can forget ever going on holiday during the school holidays again.

When I had 3 rentals I did 26 loads of washing each weekend. So you need a very good quick machine. Something that takes 3 hours is not going to cut it. And a lot of washing lines / drying facilities. Even if you just do the towels and out source the sheets.

Things to remember:

You can only sell each week once.
You will need spares of everything from loo seats to fridges
3 changes for every bed and some extras.
Buy patterned linens because it hides marks.
Loads and loads of spare china, cutlery.
Pans need replacing annually pretty much.

Things that will make your life easier:

www.holidayrentalmanagement.com is a booking management system run by a holiday rental owner.

Read the laymyhat.com forum

Suppliers:
Outofeden.co.uk
Kingofcotton

Buy your beds from the makers not the resellers. I have zip lock beds. Pain in the arse to change but good flexibility. Lasted 11 years so far. But means yet more sheets.

Get interior photos done by a pro. Use the same ones for each website. You'll want 25 per property more or less including bathrooms. My preferred choices are Airbnb, VRBO.

Booking.com was very good for longer out of season bookings but they randomly change things on the site and screw the owner over majorly. They are a scary company to work with. And very punitive.

Get key safes so guests can let themselves in.

Spend time writing guides (multi-lingual) to stop guests ringing you too often. Know how everything works because you'll need to be able to talk through how to restart the boiler etc.

Stay in them for a good before you rent them out. It's the only way you'll work out what's crap/missing.

Mine barely wash their faces in terms of income. But when the mortgages are done it'll make the equivalent of a small salary.

If your business wouldn’t be viable if you had to hire cleaners, what happens if you, God forbid, fall down stairs and break an arm and a leg? What happens then? Is that game over as you can’t afford a cleaner?

What about you do private tutoring at a time that suits you, paid by the hour. And your business idea.

It’s always good to have a backup plan and a regular source of income over the winter when lets are quiet.

@Tooembarrassingtomention

You are buying them through a limited company though- not as an individual?

@Tooembarrassingtomention as an individual. We went through the figures carefully with an IFA and an accountant and that was the recommendation. Will be declaring the income obviously.

@LegendaryReady

I think this has all the potential to be just as much hard work as teaching, except the work is drudgery and without any of the satisfaction or professional stimulation. Or company. There will still be loads of out of hours issues to deal with and you'll have no control over what they are/when you deal with them.

Plus it fits with family life worse, not better than teaching.

Yes, but maybe you don't know what the hours are actually like as a classroom teacher in secondary. My DH calculated that I was frequently working 90+ hours/ week.

@Tooembarrassingtomention as an individual. We went through the figures carefully with an IFA and an accountant and that was the recommendation. Will be declaring the income obviously.

Really? Were they experts in this area?
An IFA wouldn't be- was the accountant?

That seems unlikely. The different treatment of mortgage interest as a starter, ongoing expenses/renewals, paying yourself a salary, dividends.

Building up a business that has a value and can be sold etc etc CGT etc

@Tooembarrassingtomention

Thank you - I think it might be worth speaking to my accountant once again.

@Wallywobbles

I do both. Never stopped either. Covid was catastrophic for many owners. Could you pay all your mortgages without rentals?

I use a cleaner and a service for the sheets.

If you don't, you can forget ever going on holiday during the school holidays again.

When I had 3 rentals I did 26 loads of washing each weekend. So you need a very good quick machine. Something that takes 3 hours is not going to cut it. And a lot of washing lines / drying facilities. Even if you just do the towels and out source the sheets.

Things to remember:

You can only sell each week once.
You will need spares of everything from loo seats to fridges
3 changes for every bed and some extras.
Buy patterned linens because it hides marks.
Loads and loads of spare china, cutlery.
Pans need replacing annually pretty much.

Things that will make your life easier:

www.holidayrentalmanagement.com is a booking management system run by a holiday rental owner.

Read the laymyhat.com forum

Suppliers:
Outofeden.co.uk
Kingofcotton

Buy your beds from the makers not the resellers. I have zip lock beds. Pain in the arse to change but good flexibility. Lasted 11 years so far. But means yet more sheets.

Get interior photos done by a pro. Use the same ones for each website. You'll want 25 per property more or less including bathrooms. My preferred choices are Airbnb, VRBO.

Booking.com was very good for longer out of season bookings but they randomly change things on the site and screw the owner over majorly. They are a scary company to work with. And very punitive.

Get key safes so guests can let themselves in.

Spend time writing guides (multi-lingual) to stop guests ringing you too often. Know how everything works because you'll need to be able to talk through how to restart the boiler etc.

Stay in them for a good before you rent them out. It's the only way you'll work out what's crap/missing.

Mine barely wash their faces in terms of income. But when the mortgages are done it'll make the equivalent of a small salary.

Such useful advice @Wallywobbles thank you so much.

Our washing machine is not going to cope and I reckon we might have to invest in a quicker one and bung it in the garage! I can barely keep up with 3DC's laundry.

Had a look at the laymyhat a while ago but found it very clunky to navigate. Will have another look tonight.

Yes, but maybe you don't know what the hours are actually like as a classroom teacher in secondary. My DH calculated that I was frequently working 90+ hours/ week.

Hmm. SLT in a secondary setting here. I wouldn't swap it for four houses to clean and dealing with the public all weekend though.

It's hard but rewarding. This just sounds hard. And it is possible to do the job without quite so many hours. Lots do.

laymyhat is kind of old and not used so much anymore, but invaluable advice if you trawl through the old threads.

As you are investing (lets say a random £200k) if it is through a limited then it can pay you back your investment before taxable profit if a directors loan (with some interest although that is more complex) as an example (that is over simplistic but it is all very complicated which is why I would just check with a specialist adviser).

My accountant is quite a large local accountancy practice and he advised further specialist advice around BTL (and holiday letting has more angles).

Well really it seems as if you have purchased the holiday lets already from your updates, as you don’t seem to be willing to acknowledge that it is tedious and very hard work - as well as high risk.

A former work colleague invested in holiday lets, while still working in a well paid job with us - he got into huge financial difficulties in the crash, his LTV skyrocketed as the price of each house was reduced and the lets were also empty for a longer period than he had budgeted (hoped) for. You need to make sure you divide your worst case scenario income by 2; multiply your costs and then see if it still works.

Holiday let's nightmare. Always on call for problems, cleaning between let's, commercial rates for gas electric water and waste eat into any profit at all. My partner did this for a while and have up as he was making so little money for so much time.

Don’t underestimate the work involved. I have one holiday let and subcontract the cleaning. It takes a lot of work to manage listings, enquiries, social media etc. People also nowadays (I’ve been doing it for 15 years) don’t want to be told when they can arrive in terms of changeover ie they want to pick and choose for short breaks, which is understandable. You also need to be on call for when they’ve accidentally pulled off the shower door, lost their keys at 11pm and arrived but don’t have the information to let themselves in that was sent ahead of their stay and are frantically texting and calling you while you are driving (all things that happened last week). It can be a good business but go in with your eyes wide open.