Having a magical home hidden away from the hustle and bustle of your everyday life is a great asset to own. Not only will you benefit from being able to relax and having a place to get away from it all, but it can also be a good way to let your property earn its keep. Looking to invest in a holiday home? Here are our top tips...
Decide what you want and need from your holiday home
Lists are a handy way to help you decide what you want and will help you figure out what to prioritise in your second home. You may want to have the best of both worlds and be able to enjoy your investment while it’s not booked out to holidaymakers. When you are organised and know what you want, it’s much easier to find what you are looking for. If your budget is a challenge, consider regions that you may not have previously thought about.
Choosing your location for your holiday home
Waking up to sea views and the sound of the ocean in a cottage on the coast might be a dream of yours, or perhaps you'd prefer a home surrounded by lush greenery and vast landscapes. Regardless of your desired location, it’s worth keeping an open mind. If you are planning on frequently using this as a second home for you and your loved ones to enjoy, you'll want to consider travelling times. You may decide to choose something closer to home out of convenience, and if you are renting it out as a holiday let, and plan on managing the property yourself, this may become essential.
Consider allowing your holiday home to pay for itself
Holiday lets can achieve a higher rental income than a buy-to-let property. This could help you achieve a good return on investment. It may be worth calculating potential returns by using an online rental yield calculator to help you gauge your potential profits. It’s worth remembering that holiday lets will require more levels of upkeep, and this will increase costs. But if you get the numbers right, are careful not to overspend on improvements, and manage to fill your diary with bookings, your holiday let may cover the cost of its mortgage, with a profit.
Financing your holiday home investment
If you have a good level of equity in your current home, and are borrowing to buy, then finding the deposit could be relatively straightforward by putting some of that equity towards a holiday home. Although, typically, you will need a bigger deposit just as you would with a buy-to-let mortgage, this usually stands at 25% or 30%, depending on your mortgage provider. As you pay off your mortgage and build up equity again, you may decide to repeat the process, and make a business of it by starting a holiday let property portfolio. If you do this, forming a limited company may offer advantages.
Consider a managed holiday let service
If you love the idea of investing in a holiday home and want to make the most of it as a source of income and a place to escape and unwind, but it all sounds like too much hard work, consider using a holiday let managed service. If you do, they could take care of marketing your property, so it gets plenty of bookings, linen hire, and your property’s maintenance. This is another expenditure that may be worth the money, as it could help ensure your property is earning its keep.
Contact us
Are you thinking of investing in a holiday home that you can escape to? Contact your local Guild Member today.
