Holiday Homes – All you need to know

Being specialists in the holiday home sector, we often get asked by our buyers who have never bought a holiday home before, for advice on how to buy one and what it all entails. So we thought we would summarise some of the questions we are frequently asked.

What to Buy

When buying a holiday home, think long term. If you have children/grandchildren, what they like and what entertains them when they are aged 6 is very different to what excites them when they are teenagers. So being near a beach is great for all ages, but if the older children want to go out and about on their own in the nearest town you don’t want to become a taxi driver. If you are buying a property that you will want to enjoy in your retirement, make sure it will be suitable when you are less energetic than you are now. We have older clients that sell up when they find that the steep slopes to the beach/shops become too much for them, which can be a common feature in some Cornish seaside locations. A lot of buyers start of not wanting to ‘holiday let’ their properties when they first buy them, but change their mind when their circumstances change. So you may want to consider what potential holiday tenants will look for in the area you wish to buy in, as this can earn you a welcome source of income in the future.

Apartment or House

There has been a change in demand over the past few years and many of our buyers are now looking for houses rather than apartments to accommodate growing and patchwork families. This is somewhat also due to the amount of standard sized 2 bedroom 2 bathroom apartments built in last decade with some locations still flooded with stock. Apartments do offer a degree of security but houses on managed schemes do the same where there is always someone on site to look after your holiday home. Whatever type of property you buy make certain that there are enough bathrooms. A 2 bedroom flat/house must have 2 bathrooms whilst a 5 bedroom house must have 3 bathrooms at least. The practicalities of using a property when everyone is trying to get to the beach/restaurant at the same time can cause a lot of frustration if you are all waiting to use the facilities! Parking can be another issue. Make sure there is adequate parking attached to the holiday home or very close by as non one wants to come back from the beach after a lovely day with tired children and then have to spend 1/2 hour looking for a parking space close to the holiday home.

Where to Buy

The rule of thumb is, if you can stretch the budget, buy a holiday home in Devon or Cornwall with a sea or water view. These kinds of properties are almost recession proof and are most in demand from both buyers and holiday tenants. If you can’t get a water view having other facilities close by, such as a pub or local shop, is an advantage.  Most buyers on our database have very large search areas with requirements of ‘North Devon’ or ‘whole of Cornwall’. You must ask yourself what you want from your holiday home. Do you want to be walking distance from the sea, do you need facilities on site, and do you want shops on your doorstep or all of the above. It is good to talk to the estate agent to go through your criteria as they may have some suggestions which suit your needs in another location or may offer a house you may not have considered that could be perfect for you. For instance having peace and tranquility usually comes at the expense of convenience and easy management. If it is the remote holiday home of your dreams, you must consider who is going to look after it when you are not there, carry out repairs and do changeovers. Remember compared to a more centrally located or coastal property your letting season is always shorter (and therefore less profitable). If you do not want to be bothered with managing a second home there are properties that are located on managed estates where the management team will look after your property, your own needs when you are there, as well as organise your holiday lettings. A good example of this is The Bay at Talland in Cornwall where the onsite management team takes care of your property for you all year round.


Set yourself a budget that you can afford and if you are getting a mortgage and using the letting income to fund it, make sure you know what the net income is, more of this later. You also need to narrow down where you want to be as what your budget can get you differs massively between village to village let alone from coast to coast or county to county. If getting a mortgage talk to your financial advisor before seriously starting to view properties. We have had several buyers finding their dream house this year but have not been able to proceed when they could not get the appropriate mortgage. The mortgage advisors will what to know the earning potential of these properties and if you want to find out what your new property will earn in the holiday letting market use a reputable letting agent such as Cornish GemsBeach Retreats or Unique Home Stays .They should be able to give you a quote of what your rental income would be over the phone. We have commissioned letting agents to produce letting predictions on most of our properties, so give us a call.

Holiday Restriction on Properties

They are some properties, mostly on managed schemes, that have been given a holiday restriction status by the local planners. This is to ensure that the properties can be let out, tourists spend money locally and that the local resources are not over stretched by providing services like schools, hospitals, etc. Most of these restrictions mean that you can use the properties all year round but they cannot be registered as your main residence. PLEASE NOTE: if you are buying a holiday restricted property your ‘buy to let mortgage’ will in nearly all cases not allow you to buy a ‘holiday restricted’ property. There are lenders that do lend on holiday restricted properties but their rates are usually more expensive and the requirements more stringent. A good broker that our buyers have used in the past is Holiday Let Mortgages. Think about taking the equity out of your main home…this could be the cheapest and easiest option.

Managing your Holiday Home

Nearly all of our buyers that purchase their holiday home through us are based 100’s of miles away and one of their main worry is the day to day running of their property from afar. There are many reputable companies that will take this on for you so you will not receive a phone call in the middle of the night saying that the heating has broken or the internet is down. Companies like Bespoke Devon offer a bespoke holiday letting management service and  tailor make packages for their clients from just key holding to booking spa days for holiday makers. They also offer advice and full refurbishment of clients homes.

What are the costs of running a holiday letting property?

This is the most asked question and here is a brief overview. There are many outgoings:

Letting Fees 20-25% -Changeover costs 5% -Utilities/elec/CT/Gas 15% -Repairs 10% TOTAL approx. 55%

So the rule of thumb is that your gross rental income should be halved to work out what you get in your pocket at the end of the year. Now this sounds high but when you consider that a successful holiday let on a property costing £250,000 can achieve £25,000 p.a. gross you would be getting 5% net return on your capital invested. Many people do not take into consideration that prices are rising at the moment and in the areas we deal with it is about 5% p.a. so your net yield is 10% (ignoring tax). You can dramatically reduce your costs of letting by letting the property yourselves by using sites such as Home Away or Owners Direct which will automatically save you the letting fee. However you have to do your homework. A reputable holiday letting company does an huge amount of marketing through advertising PR and brochures and if they are able to achieve 20% more bookings than you and you do not have to take phone calls at all hours of the day and night and manage the bookings, which is an art in itself, they are well worth their percentage. They are also impartial and are not emotionally attached to the property.

Our Rule of Thumb

Buying a Holiday Home is fun and you should regard it as a long term investment that you will be able to enjoy it with your friends and family for many years. Miles, one of the Directors of Chartsedge said “I had my wedding reception in the garden of my Cornish holiday home some 11 years ago and the memories of that day are priceless. We sold it five years ago and did very well but it was not all about the money, the good times we had with friends and family will always be precious to us. We recently sold the house again to a lovely couple from Cheshire who are again using it as a holiday home and making their own memories” Please call us or email if you have any questions about buying or selling a holiday home contact us.