If you own a second home and you are looking to rent it out - consider renting the property as a serviced holiday let rather than a buy to let. If your property is in a location that is popular with tourists (Glasgow City Centre, Glasgow’s West End, Near Glasgow Airport) Even if your property is in an area normally reserved for residential you could have the potential to let as a serviced apartment. Recently we took on the full management of a property in Cambuslang, a small suburb 6 miles outside the city centre and managed to tap into a very different market than the tourist market of the city centre. This property has become extremely popular with business guests who would normally stay in local B&Bs but love the Idea of having a home to come back to after a hard day’s work. This serviced apartment is currently commanding rental rates of £560 per week! (Before fees) - a holiday home rental can be a much better financial strategy.
There are a number of advantages to this strategy - you’ll make more money, you’ll get better tax benefits and - if you hire a holiday home management company such as Holiday Home Glasgow - it will be a lot less hassle.
The best time to make a move on a holiday let investment? Experts say look to buy in the autumn. Other existing owners are more likely to sell when the summer rush is winding down and you’ll have more choice and therefore more bargaining power. Then, you’ll have plenty of time to get the property ready and start marketing it for visitors during the Christmas and New Year period.
Keep in mind though, renting out a holiday home is very different to managing a standard buy to let and it’s very important to know what you are doing. Take your time and do your research before jumping into this type of big property decision. Let’s take a look into some of the advantages of choosing a serviced holiday home style property rather than a buy to let.
Landlords Earn More Income
One of the biggest reasons to go the serviced holiday let route is the financial benefit. You’ll earn a lot more money renting out the same property as a furnished holiday let than you would if it were a buy to let - sometimes up to three times as much. The key is that when people are on holiday they want to go to beautiful, well designed and well located properties and they are willing to pay a premium for this.
One of the main reasons for this is because the holiday rental can command excellent rates during the high season, especially in the summer, at Christmas and at New Years. This will bring up the annual total earnings of the property and really help to offset the times when the property is empty in the low season. Of course, don’t forget that you cannot count on being able to rent out the property all year round. You will need to cover the mortgage even when the property is not being rented out.
If you really want to increase your rental earnings, make sure that your property has the kind of features that are highly desirable for holidaymakers. Homes that have a great location have good Wifi, and free parking earn more than those that don’t. The more you invest in making your holiday rental special the more you will be able to earn.
Also, when you are calculating your earnings don’t forget to also factor in the other costs that you will incur. For example, you will need public liability insurance to cover any potential injuries to your guests or cleaners. You’ll also have to factor in utilities and council tax, which would be paid by the tenant in the case of a buy to let. Make sure to calculate all of these extra costs when figuring out your profit. However, they will be tax deductible so that is a plus. Also, you’ll be able to claim “capital allowances” on many different costs such as the cost of furnishings, equipment and furniture and if you are running the let as a business you could also receive a rates rebate meaning there will be no council tax to pay.
Get Tax Benefits
The taxes applying to buy-to-let properties for landlords don’t touch holiday homes. If you are operating your property under the category of “furnished holiday letting” you will be able to offset all of your expenses, including the full interest on your mortgage against the rental income.
Also, when you run a holiday let it is treated by HM Revenue & Customs as a trading business. This means that if you have losses you can carry them forward and offset them against your future profits.
An additional perk is that if you have a furnished holiday rental you will qualify for entrepreneur’s relief, which will cut down on your potential capital gains tax. It will be 10%, rather than the 18% deduction you would have otherwise.
There’s another tax related reason why holiday rentals have an advantage over buy to let properties. If you have been actively involved in the business - such as providing breakfast, tours or a laundry service - you could potentially claim it as a business property and get inheritance tax relief upon death.
Of course, there are some restrictions. In order to be able to claim that the property is a furnished holiday let it must be available for renting at least 210 days per year and it must actually let for 105 days. If you own multiple properties you can take the average of your occupancy.
Much Less Hassle
With all of the many things that most people have going on in their lives, who has time for all of the little details of managing a serviced apartment property? It can be a lot of work and can be quite time consuming - even more so if you have more than one property. Also, it can be difficult to manage a property when you don’t live close by. It can be so much easier when you have the help of a professional holiday property manager.
At Holiday Homes Glasgow
we offer the full hotelier management service that takes care of renting out your serviced apartment to your guests. Our service makes it so much easier than doing it on your own. We offer holiday property management services for many landlords in Glasgow and some of the services we provide include property maintenance, guest contact services, changeover cleaning, holiday cover, website management, booking services and much more. Our high quality services will make the experience more enjoyable for your guests as well as making things easier for you.
Our holiday let changeover service offers you a full clean of the property when your guests have left, so that your next guests will have a fresh and clean first impression. This includes linen changeover and replenishment of soaps, shampoos and other products. We will leave your holiday home looking perfect, so that you can enjoy a smooth and successful changeover.
Our services also include Key Holding, so that you can rest assured that a trust worthy person is holding your keys and is available when needed. We are proud to offer these holiday home rental services, along with much more including property checks, itinerary services and short notice cleanings. We can also offer valuable advice on how to be a holiday home landlord and how to get the most out of your rental.
To find out more about our serviced apartment rental management services and how they can benefit you, please feel free to contact us
at any time.