We are receiving an increasing number of calls from potential buyers who have traditionally bought Buy to Let properties as an investment or as part of their pension strategy, but are now looking to diversify their portfolio or to move out of the Buy to Let sector completely. The main reason for this is the recent government decision to not allow mortgage interest to be offset as a cost against the income from their Buy to Let. This however does not apply to furnished Holiday Lets as the mortgage interest can still be deducted from the income for tax purposes.
Another great advantage that our buyers are appreciating is that as long as their holiday home is available to let for 140 days a year it is regarded as a business and therefore liable for Business Rates which is a much lesser cost compared to Council Tax. Although the HMRC regards these as a business the owners can still use their own properties for holidays with their families and friends for as much as 20 weeks a year.
Other advantages of running a holiday home are:
You should always take tax advice from a company that is familiar with the Furnished Holiday Let market and we recommend the accountants Darnells with offices in Totnes and Newton Abbot.
Some of our clients are offering second home owners Guaranteed Rents and full management packages to make buying and running a second home as painless as possible. A perfect example of this is our sea view apartments at Mawgan Porth Apartments in Cornwall where the developer is already letting the brand new apartments and can offer a guaranteed rental return of approx. 4.5% net. Or Kennacott Court Cottages in Bude which has lovely leisure facilities, here the guaranteed rent is 5% and you have 5 free weeks use for yourself!
If you would prefer to manage the property yourself then there are management companies throughout Devon and Cornwall that can organise the simple things such as changing sheets and cleaning on changeover days. Others offer a more tailored approach which can offer concierge services to your tenants. This makes you stand out from the crowd and enable you to charge higher rents. Bespoke Devon is one such company that is highly regarded by its clients.
It is also possible to let your holiday home yourself through various websites but we have found that by employing a professional holiday letting agency such as Helpful Holidays makes for an easier life and they can obtain more bookings than you are able to because of their great marketing resources. The extra income you will achieve easily covers their letting charges.
If you want to do it yourself, one of our lifestyle properties Pridhamsleigh Manor in the South Hams lends itself well to self management. Here you can live in a listed manor house and have the opportunity to run your own business on your door step by letting out the 3 large barns.
If you are thinking of buying or selling a second home and would like to have a chat about the pros and cons please give either Gail or Miles a call on 01392 832446 or email us on [email protected]