Residential Let vs. Holiday Let

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    Residential Let vs. Holiday Let

    My 'conveniently located town house' in Bucks is currently let to tenants. Just wondering about maximising the revenue potential and making it into a holiday let.

    I realise I'd have to furnish it, have it cleaned after each stay, keep it well-maintained and undertake all the paperwork that goes with it.

    Has anyone done this? Is there a real difference in actual profit once all the extras have been paid for?

    Voices of experience welcome!

    Thanks, RK

    I looked into selling my current rental flat (lease prohibits holiday lets) and buying something else for holiday use. Weighed up the costs versus profit and decided it wasn't worth it.

    Holiday lets have higher H&S requirements (fairly sure you need fire blankets, extinguishers and annual servicing of same), PAT electrical testing is compulsory, and your insurance costs will be higher as it is classed as a commercial business. Have you a mortgage? They may even prohibit holiday use! Council will likely insist on you changing to business rate council tax.

    As you say, you need to arrange hand-overs and weekly cleaning, and damage/repairs must be attended to quickly, for instance, your departing holiday makers advise you that the TV blew up last night, and you then have to spend all of Saturday dashing around trying to find a replacement before your next guests arrive at 5pm!

    When you take into account the additional costs, hassle, being tied every weekend yourself or having to employ someone to clean, marketing and having to replace furniture/redcorate every year to be able to offer competitive standard of accommodation, you may not be any better off. Then of course, if you did make more profit, the tax man wants more of a slice too!

    Breakages, damage and wear and tear can be higher too - people in holiday mode may not look after the place as well as someone who treats it as their home. There can also be noise issues with neighbours - relaxed holiday makers having noisy BBQs until 11pm ...

    Then you have the seasonal dips - I was advised by someone in the business that you can only count on holiday letting for 7-8 months a year maximum, and even then, not every week. You would still have your ongoing costs - Council tax, insurance, mortgage etc, to cover even when the place is empty.

    All in all, I decided against it, and would rather have 24/7 365 letting to good reliable tenants, than having complete strangers use and abuse the property every week!


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