Holiday rentals or Short-Term Accommodation can offer several financial advantages, making them an attractive investment opportunity for you. If you are considering turning your home into a Holiday Short term Rental we have provided some insights and benefits to renting out your property. Artistry Property Management is experienced in preparing, marketing and managing holiday rentals and we also have a presence in France.
We can market your property through our Holiday Bookings portal which feeds directly to Online Travel Agents (OTS’s) like Booking.com, Airbnb, Expedia etc.
Choose from our bespoke range of services from full property management to finding a renter or holiday changeovers and condition reports. Our meticulous attention to detail can provide ongoing investment income while providing you peace of mind.
Rather than listing your property on multiple sites, managing calendars, monitoring payments and maintenance, we are well positioned to take care of all aspects of letting your holiday home.
Holiday Home Insights
- Steady Income: A holiday rental can provide a consistent source of income, especially if it’s located in a popular tourist destination.
- Investment Opportunity: It’s a long-term investment that can help in wealth generation and provide a secure alternative to more volatile investment options.
- Mortgage Interest Relief: For furnished holiday lets, the full mortgage interest can be deducted from profits, which is not the case with standard buy-to-lets.
- Capital Allowances: Certain capital allowances on holiday lets can be claimed that aren’t available for typical buy-to-lets.
- Pension Contributions: Profits from holiday lets can potentially contribute to pension schemes.
- Boost Local Tourism: By investing in holiday lets, you’re also contributing to the local tourism industry, which can have broader economic benefits.
Challenges of Self-Management
The key rules and regulations that apply to holiday/short-term lets: For a property to count as a holiday let, it must be furnished and available for letting for at least 210 days a year. That means you can use it yourself for up to 22 weeks.
Deciding whether to manage a holiday let yourself involves weighing the potential benefits against the responsibilities and time commitment required. Here are some considerations:
- Time Commitment: It requires a significant amount of time to manage bookings, maintenance, and guest communications. Artistry Property Management is committed to the care of your property and to maximize your investment.
- Availability: You need to be available 24/7 to address any issues that may arise during a guest’s stay. We are available to your Guests 7 days a week.
- Expertise: It requires knowledge of marketing, customer service, and local regulations. We have the expertise and experience to manage your home.
In the first instance, ensure that you are legally able to rent your property on a short-term basis and that you’re properly protected. Three key things you need to address:
1. Does your mortgage lender allow it?
The level of risk attached to short-term letting is considered too high for most mortgage lenders. The more people using a property, the greater the risk of damage. There’s also a high chance of the property being left empty for extended periods of time. So, if you currently have a mortgage on the property you’re planning to let, you may need to apply for a new one. There are three options:
- Buy-to-let mortgages: The vast majority of BTL mortgages stipulate that the property must be let on an Assured Shorthold Tenancy agreement (AST), so short-term lets will not be permitted.
- Residential mortgages: Most of the biggest lenders – including Barclays, HSBC and RBS – tend to rule out short-term letting, although some, such as Santander and Nationwide, may permit it, but there will be strings attached.
- Specialist short-term let mortgages: Also known as ‘holiday let’ mortgages, these are still a niche market. Partly because of the lack of competition and partly because of the increased risks associated with short-term lets.
2. Does the lease permit it?
If the property is leasehold, the terms and conditions might prevent short-term renting, so check your lease and speak to the freeholder.
3. Do you need planning permission?
Each Local Authority in England has the power to set their own policies for planning permission for ‘change of use’ of a property, as well as impose their own licensing schemes. In London, for example, homeowners can legally rent a property on which they pay the council tax themselves, for up to 90 nights a year without planning permission. If they want to exceed 90 nights, they must seek permission.
Holiday Rental Rules and Regulations
The key rules and regulations that apply to holiday/short-term rentals:
- For a property to count as a holiday rental, it must be furnished and available for renting for at least 210 days a year. That means you can use it yourself for up to 22 weeks.
- To benefit from the favourable tax status, the property must be commercially let for at least 105 days in the year. (So, if your property is in London, you will need to secure planning permission.)
- Any single rental must not be for longer than 31 continuous days. If it is, you must have a formal tenancy agreement, which will give your guest the same rights and responsibilities as a buy-to-let tenant. It may also affect your tax status and you may be violating the terms of your mortgage.
- Guests staying in a holiday house have no right to remain and they must leave the house at the end of their holiday.
- If you provide a television, you’ll need a specific Hotel and Mobile License.
Health and safety
General health & safety – Landlords or Property Managers have a duty of care to guests, a thorough risk assessment for the whole property and its grounds and take reasonable steps to minimise any risks and hazards. It’s good risk management to have an information file for guests, with instructions on how to safely use appliances and facilities.
Gas safety
You must ensure that all appliances, fittings, flues, and chimneys are safely maintained. A registered engineer must carry out an annual gas safety check on each gas appliance and you need to retain the record for two years.
Electrical safety
All electrical equipment supplied must be safe to use and, if supplied since January 1995, marked with the appropriate CE symbol. It’s highly recommended that you have the electrical installation inspected and tested every 5 years, by a qualified electrician who’s a member of NAPIT, or NICEIC. We’d also suggest you have all electrical appliances PAT tested annually.
Fire safety
Carrying out a fire risk assessment to identify any potential hazards is essential, install a smoke alarm on each floor that’s used as living space and ensure that all upholstered furniture complies with the current requirements for fire resistance. Keep in mind your insurance provider might require you to take further steps, e.g. have the chimney swept annually.
Carbon monoxide detectors
You are legally required to fit a carbon monoxide detector in rooms containing a solid fuel burning appliance, e.g., log burner or open fire. As gas appliances can also emit carbon monoxide, it’s recommended that you also put a detector in any rooms that have gas or oil appliances, e.g., oven or boiler. In addition to installing carbon monoxide alarms, landlords are also required to fit smoke detectors on every floor of the property.
Accessibility
The Equality Act of 2010 requires your holiday property to have a written accessibility statement outlining the facilities and services in and around the property. This document should be clearly displayed in the property and shared with guests before their arrival.
You must also make reasonable adjustments to the property so it can be used by people with disabilities. Here are some of the physical features you may need to change:
- Steps and stairs
- Passageways and paths
- Entrances and exits
- Doorways – inside and out
- Toilets / washrooms
- Signage
- Lighting and ventilation
- The size of premises
And here are some examples of the kinds of reasonable adjustments you could make so your property is accessible to people with disabilities:
- Fitting ramps and stair lifts
- Widening doorways
- Installing automatic doors
- Upgrading your lighting
- Clearer signage
However, for some older properties, and listed properties, it may not be possible to make ‘reasonable adjustments’.
Insurance
Buildings insurance and public liability insurance need to be in place.
How to turn your buy-to-let into a holiday home
We specialise in short-term rentals, we can provide you with the rate which is achievable for your property.
You will need to provide furniture, soft furnishings, appliances, cutlery, dishes & glassware and linen.
Think about what you would expect in a nice hotel or holiday home:
- Research specialist insurance.
- Install services – broadband, TV, etc.
- Make sure you comply with all health and safety requirements.
- Ensure you have a system for managing and maintaining your rental. Booking administration, guest relations, change-overs and maintenance.
- Marketing the property. We offer an in house bookings channel manager that reaches 17 plus major booking sites.
French Collection
Many of our UK based clients have French Properties, for this reason we provide a full range of services including holiday rentals.
