Five Reasons to Invest in a Holiday Rental Property

In this two-minute read, we look at the advantages of buying a holiday rental property.

Planning a foreign holiday over the last two years has taken a lot of patience, caused a lot of frustration, and has seen lots of Brits opting for a staycation.

With amber and green lists changing frequently, mandatory PCR tests, and the dreaded threat of hotel quarantine, the demand for UK holiday rentals has gone through the roof. But are they really worth the investment?

Here are five reasons why buying a holiday rental property may work for you.

1) Expect a higher rental yield

In peak holiday season, holiday rentals can earn more in a week than a buy-to-let can in a month.

A decent holiday property can earn as much as an 11% rental yield (according to which.co.uk) compared to a buy-to-let which normally earns around 4 – 8% per annum. Be sure to do your sums before investing and subtract any agency or mortgage fees before working out your potential yield. It’s also worth remembering that more expensive destinations offer lower yields.

2) Holiday home for you

One of the most obvious benefits of a holiday rental property is a ready-made staycation home for you and your loved ones. Keep in mind, to earn the highest income from your rental property during peak seasons, you’ll want it rented out rather than staying there yourself.

3) Higher capital appreciation

If you’ve got your eye on a holiday rental that requires some TLC, you could enjoy an increase in property value over time and as the destination becomes more sought after. However, if you’re buying in a popular location, you might be paying a premium where prices have already peaked.

4) Less wear and tear

Buy-to-let landlords often have to pay out for maintenance and repairs at the end of a long tenancy. However, holiday rental properties are typically occupied for one to two weeks – so there’s less time for day-to-day damage.

The downside of lots of short-term guests is the need for a management agency to take care of housekeeping and general maintenance. Alternatively, you can manage the holiday let yourself and help guests with any issues during their stay.

5) Tax advantage

HMRC considers holiday rentals to be a business rather than an investment, so a landlord can enjoy more tax benefits than a buy-to-let owner. If the property is a Furnished Holiday Let (FHL), you might also be able to claim (limited) mortgage relief.

Always speak to a property/finance professional to find out about other tax advantages such as inheritance and capital gains tax and business rates instead of council tax.

For more information about buying a holiday rental property, contact us at Grey & Co.

Get in touch with us

First Name

Last Name

Your Email Address

Mobile Phone

Are you looking to

Buy

Sell

Rent

Let

Please enter message here

Please confirm that it is okay for us to contact you about this information as well as products and services. (You will always be given the right to unsubscribe at any point in the future)

Confirm

The Hidden Trap of Overpricing Your Home in Wembley's Property Market

In an age of sensational headlines, the UK property market—particularly in Wembley—often finds itself misinterpreted. While we cannot ignore the challenges of higher mortgage rates and shifting buyer preferences, it is vital to appreciate the broader context to understand what's happening in the Wembley property landscape.

CLICK HERE >

Cuckooing: Protect Your Rental from This Callous Crime

Cuckooing is a heartless crime that puts your tenant’s wellbeing at risk and leaves you, as the landlord, facing an array of legal issues. So, if you own a rental property, here’s what you need to know.

CLICK HERE >

The Impact of the Autumn Budget on the Wembley Property Market

Now that the dust has settled on the Autumn Budget, let’s look at how it will impact the property market.

CLICK HERE >

Wembley Landlords: Top Tips for Buying a Fixer-Upper

When considering the purchase of a ‘doer-upper’ – a property that requires refurbishment – landlords are often faced with a Shakespearean (ish) question: “To buy, or not to buy?” It’s an important decision where you must weigh up several important factors before choosing to invest or not. Below are five key considerations to keep in mind:

CLICK HERE >