Anyone got a holiday let?

rjbell

rjbell

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Robert
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Been thinking about buying a holiday let. Anyone got one?
Is it more trouble than its worth?
Any advice?
 
Robert, are you talking about home or abroad?

(we've been thinking about the possibility of getting a small place abroad for ourselves, so would also be interested in any advice)
 
Research, research and more research! Also worth looking on holiday let sites to see what the competition is like already.
 
BillN_33 said:
the new additional 3% second home stamp duty
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Yeah. Exactly that.

A stupid an ill thought out law that makes holiday lets a lot less attractive than they used to be. And in financial terms I don't think they were ever that great.
 
JonathanRyan said:
Yeah. Exactly that.

A stupid an ill thought out law that makes holiday lets a lot less attractive than they used to be. And in financial terms I don't think they were ever that great.
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It is going to effect many people that if should not effect at all.

Buy to let market will certainly fall back ...... or rents will increase to cover this additional cost

If you buy a house for £800,000, (say you are moving up the property ladder in the South), and have another house, say a small flat that you rent out, stamp duty is now £54k

Then the Government wonder why tax avoidance schemes are devised
 
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Yes. That's exactly my issue with it.

Also, it's currently in place but nobody really knows how it works.

E.g. a couple decide to move in together into "her" flat in London. He decides not to sell "his" flat but rent it out. Do either of them need to pay 3% stamp duty? It looks like they morally should but since there's no sale involved, who knows? How about they then get married, sell "her" flat and buy a nice house together. It's her only house, but his second. As a married couple they are both jointly liable for stamp duty (regardless of whose name they buy it in). Do they
  1. Pay first home SDLT
  2. Pay second home SDLT (i.e. an extra 3%)
  3. Pay an extra 1.5% (i.e. he pays his half of the extra)
  4. Pay 3% of the value of his flat (which is odd if he doesn't sell it but should be less than 3% of the house)
  5. Be forced to sell his flat because the law was badly written
  6. Get fined for picking the wrong option above
But anyway, holiday lets..... :D
 
A few years ago my wife and I were thinking of buying a second house which we could use for holidays ourselves and rent out at other times. But we decided that, if we wanted to own another house to rent out, it would be a lot less hassle and probably a lot less costly to buy one locally.

The thing is, houses need work doing on them from time to time - and holiday lets need to be cleaned every week - and when you're remote you depend on other people doing it. That can work, but you have to ask yourself whether those people you're depending on are quite as motivated as you would be with regard to cost and/or quality.

We had some experience of this, because after we married we rented out my wife's flat in Brighton for a few years while we lived in "my" flat in Croydon. We had managing agents to look after the day to day things, and they were brilliant at finding tenants, vetting them, collecting the rent etc. But when something went wrong (eg boiler broke down, broken window, that sort of thing) then they had no incentive to try to get it fixed cost effectively. I'm sure the trades people they used knew that they weren't paying the bills themselves, and inflated their prices accordingly. If the flat had been local to us, we would have been able to shop around for quotes from various local trades people who we have used on our house. But we didn't know anyone in Brighton so we were pretty much at the mercy of the agents.

Of course all this is irrelevant if the holiday let you're looking at is very close to where you live. But if it isn't, you might want to think through these issues.
 
Earlier this year I inherited a house in rural France. When I inherited it, it had been on the market for 2 years and it remains so. TBH I'd just like to be shot of it and use the money to pay of a big lump off my mortgage. As an investment it hasn't worked.Its on the market for considerably less then was paid for it.

Whilst letting on a holiday basis pays for the upkeep of the property thats pretty much it. I don't see any real return on it. Due to its location (it takes me nearly a days traveling from London to get there) I have to employ a local agent to manage the holiday let, upkeep, cleaning etc...and that, to my mind makes it more hassle then its worth.

I like the idea of owning a property in rural France, sitting outside in the evening, drinking wine etc etc, but the reality is I'll be doing well to spend 3 weeks there this year, its nothing but a headache which pays for itself but nothing more.
 
I'm thinking of buying an apartment by the sea in my home town. Not for my own use and through my business as an investment. I know i would have to pay tax on any profit if i was ever to sell it, however all going as planned i would never sell it. It would supplement my state pension if i get one!

Would a company pay the 3% stamp duty?
 
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boyfalldown said:
Earlier this year I inherited a house in rural France. When I inherited it, it had been on the market for 2 years and it remains so. TBH I'd just like to be shot of it and use the money to pay of a big lump off my mortgage. As an investment it hasn't worked.Its on the market for considerably less then was paid for it.

Whilst letting on a holiday basis pays for the upkeep of the property thats pretty much it. I don't see any real return on it. Due to its location (it takes me nearly a days traveling from London to get there) I have to employ a local agent to manage the holiday let, upkeep, cleaning etc...and that, to my mind makes it more hassle then its worth.

I like the idea of owning a property in rural France, sitting outside in the evening, drinking wine etc etc, but the reality is I'll be doing well to spend 3 weeks there this year, its nothing but a headache which pays for itself but nothing more.
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Have you considered doing a long term let to someone like a writer or painter etc? Someone wanting a retreat might be the kind of person that would keep it occupied and cause less hassle than an endless stream of holiday makers.

If it has been on the market all this time and not sold then I'd change selling agents. It will be stale now and they will have lost interest in doing anything. It's also worth researching alternative travel so you can find a faster route. There's bound to be one. A lot of the flight sites are crap and don't let you use any UK airport or any areas airport to find better routes. The www.cheapflights.co.uk seems to let you have wider search criteria. You may find there is a better one and you would be able to sit outside there more often :)
 
boyfalldown said:
Earlier this year I inherited a house in rural France. When I inherited it, it had been on the market for 2 years and it remains so. TBH I'd just like to be shot of it and use the money to pay of a big lump off my mortgage. As an investment it hasn't worked.Its on the market for considerably less then was paid for it.

Whilst letting on a holiday basis pays for the upkeep of the property thats pretty much it. I don't see any real return on it. Due to its location (it takes me nearly a days traveling from London to get there) I have to employ a local agent to manage the holiday let, upkeep, cleaning etc...and that, to my mind makes it more hassle then its worth.

I like the idea of owning a property in rural France, sitting outside in the evening, drinking wine etc etc, but the reality is I'll be doing well to spend 3 weeks there this year, its nothing but a headache which pays for itself but nothing more.
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French market has plummeted and not really recovered. We have a friend with a property now worth half what he paid years ago, and it won't sell. Still gets rented out every year for about 16 weeks.
 
srichards said:
Have you considered doing a long term let to someone like a writer or painter etc? Someone wanting a retreat might be the kind of person that would keep it occupied and cause less hassle than an endless stream of holiday makers.

If it has been on the market all this time and not sold then I'd change selling agents. It will be stale now and they will have lost interest in doing anything. It's also worth researching alternative travel so you can find a faster route. There's bound to be one. A lot of the flight sites are crap and don't let you use any UK airport or any areas airport to find better routes. The www.cheapflights.co.uk seems to let you have wider search criteria. You may find there is a better one and you would be able to sit outside there more often :)
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I have to admit I'd not though about it. Great idea though and worth a lot of further consideration.

If I'm honest the problem with selling it is its really in the wrong place, (its about 30m south of Tours) and its not that unusual for property to take 3 years or more there to sell
 
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rjbell said:
I'm thinking of buying an apartment by the sea in my home time and not for my own use through my business as an investment. I know i would have to pay tax on any profit if i was ever to sell it, however all going as planned i would never sell it. It would supplement my state pension if i get one!

Would a company pay the 3% stamp duty?
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from Zoopla

"
Q. Can I avoid the surcharge by setting up a limited company?

A. The Government has a keen eye on preventing tax avoidance with this new levy, so you won't be able to escape the surcharge by setting up a limited company for the purpose of buying an additional home or homes. We're currently waiting on more information from the Treasury on how this will work for existing limited companies.


Read more at http://www.zoopla.co.uk/discover/buying/q-a-new-3-stamp-duty-surcharges/#vE4CBd37IIGtf3qC.99"
 
Our friends place is along from Saint Jean D'Angeley, so a nice part of the country. It's on the edge of an elevated slope so have views from the house and pool over 30-40 miles on a good day. We used to go to it out of season 3-4 times a year. I think it's currently rented with Brittany ferries, seems to do well, but he'd like to release the equity after an expensive divorce.
156430993.jpg
 
Byker28i said:
French market has plummeted and not really recovered. We have a friend with a property now worth half what he paid years ago, and it won't sell. Still gets rented out every year for about 16 weeks.
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boyfalldown said:
I have to admit I'd not though about it. Great idea though and worth a lot of further consideration.

If I'm honest the problem with selling it is its really in the wrong place, (its about 30m south of Tours) and its not that unusual for property to take 3 years or more there to sell
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The French property market is hopeless - as you say most houses, (especially if originally bought as second homes), hang around for years before they are sold and in the meantime deteriorate ........ lots on the market in our area and the Agents are useless and charge a fortune, typically 5%
Insurance wise leaving a property empty can be risky if you have a problem

Renting long term to the frogs is usually dangerous - the law favours the tenant and it takes ages to solve problems for non payment of rent and damages ....... legally it costs and never gets resolved to the satisfaction of the Landlord
 
Pah, take the ferry, drive. It's amazing how far down you can get to in 4 hours from Caan/Cherbourg. We often go through Le man, Tours, Poitier on the way down

French diesel is/was cheap
 
BillN_33 said:
The confusions and anomalies are all on the following Q & A thread

http://www.zoopla.co.uk/discover/buying/q-a-new-3-stamp-duty-surcharges/#ZSslpJF7DGsJ0OjJ.97
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That's a useful link - but I stopped reading when the chap from John Charcoll suggested something that is at best case probably unwise and may actually be illegal.....

Also,

COMMENTS DO NOT CONSTITUTE FINANCIAL ADVICE AND ARE PROVIDED FOR GUIDANCE ONLY.
Read more at http://www.zoopla.co.uk/discover/buying/q-a-new-3-stamp-duty-surcharges/#fTLkyEuKk08Mdzk6.99
 
BillN_33 said:
from Zoopla

"
Q. Can I avoid the surcharge by setting up a limited company?

A. The Government has a keen eye on preventing tax avoidance with this new levy, so you won't be able to escape the surcharge by setting up a limited company for the purpose of buying an additional home or homes. We're currently waiting on more information from the Treasury on how this will work for existing limited companies.


Read more at http://www.zoopla.co.uk/discover/buying/q-a-new-3-stamp-duty-surcharges/#vE4CBd37IIGtf3qC.99"
Click to expand...

There was originally a suggestion that "large" property investment companies (probably > 20 properties) would be exempt from the 3% charge but small investment companies and individuals wouldn't be. This evaporated before the second budget statement (probably because there's an ongoing judicial review and it looks well dodgy even for this government).

You'd definitely want to talk to a proper advisor before buying a property through a LTD company (or at all really) as the finance arrangements can be a bit complex.
 
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