BTL to Holiday Let

by Readers Question

20:54 PM, 21st May 2019
About 4 weeks ago

BTL to Holiday Let

Make Text Bigger
BTL to Holiday Let

Has anyone converted a BTL to FHL (furnished holiday let)? After 11 yrs in residency one of my lovely tenants is leaving.

Since this flat is a 5 min walk from Bournemouth’s best beaches, restaurants and bars, I am exploring the option of Holiday let. Since the Government is penalising Landlords with Section 24, the tenant fee ban, 3% SDLT surcharge and the abolition of Section 21, I feel this is a more profitable solution for me.

I’m sure FHL’s has it pitfalls, but I don’t have to worry about someone taking residency and me not being able to gain my property back.

Having been through 2 evictions in 15 years, I count myself lucky, but soon without S21 to rely on and a S8 not fit for purpose, I feel changing all my BTL’s to FHL’s is a safer option. Luckily all my BTL’s are near the beach.

Any advice anyone?

Sarah



Comments

Neil Patterson

20:57 PM, 21st May 2019
About 4 weeks ago

Hi Sarah,

First question is do you have any BTL mortgage borrowing? If you do you may need consent from the lender or to change product/lender as a holiday let may be breaking the BTL terms and conditions.

NW Landlord

7:54 AM, 22nd May 2019
About 4 weeks ago

I am also considering this and moving forward am going to be focusing on it market saturation and the loony politicians are my only concerns but I say go for it you have nothing to loose.

Lesley Thomas

8:49 AM, 22nd May 2019
About 4 weeks ago

One of the (much unknown) benefits of owning or creating a Holiday Let (HL) (UK or abroad) is that the owner could attract a huge tax break in the form of Capital Allowances (CA) tax relief against rental profits. We own a HL on Loch Ness in Scotland (which we are selling) and which currently benefits from just under £30K tax relief against our rental profits which we can transfer to the new buyer. I previously worked as a CA consultant whereby I still have contacts who specialise in this area of tax law. I have to emphasise that it is not something that most accountants (or solicitors) have the requisite expertise in order to apply the benefit of the full CA tax relief against a HL. CA's do not apply to BTL property - only commercial and HL properties. I would be happy to discuss this further with anyone who is considering either buying an existing HL or creating/converting a property into a HL.

CayC

12:49 PM, 22nd May 2019
About 4 weeks ago

Reply to the comment left by Lesley Thomas at 22/05/2019 - 08:49
Hi Lesley, I would love to know more. We are in the process of selling a property in London that was holiday let, our accountant has never mentioned this tax break.

CayC

12:56 PM, 22nd May 2019
About 4 weeks ago

I have a few rentals that are long term but come peak season I then convert to short term on Airbnb. It is a learning curve for sure, I suggest watching a few you tubes and some of the series on netflix on how to present a rental to get max bookings. As to bookings, take the time to really research what is in your area, look at the calenders, are they booked? prices? All the algorithms and setting on alot of the sites like VRBO and Airbnb are a bit off to say the least. For instance they have no clue as to peak seasons, nuances of good areas, etc.. and will value your place the same as some real shiite. Then key features are good photos, accurate information and deciding how many days minimum. Your biggest issue is going to be finding a good reliable cleaning crew. Damage to property like sheets/towels/crockery. Hotels use tough furniture for reason. But generally I find people really respectful and very clean and friendly. I have had the odd nightmare for sure, but less than with long term tenants and they are gone quick! I haven't had good experience with hosting companies, they charge 20% and really underperform is my experience. Doing it yourself you will make good money, great money if you do it right and there is demand in your area.

Nicole M

12:57 PM, 22nd May 2019
About 4 weeks ago

Hi Sarah,
The other thing you would need to consider is the lease restrictions, if it is a flat.

I work for Smart Holiday Rentals in Bournemouth and would be happy to discuss any questions you may have about holiday lettings. Feel free to drop me an email (nicole@shr.co.uk) or give me a call.

Nicole

alex khan

13:18 PM, 22nd May 2019
About 4 weeks ago

Reply to the comment left by Lesley Thomas at 22/05/2019 - 08:49
I would be very happy to discuss this with you and would appreciate your contacting me. Thanks
alex khan

Sarah-Jayne

11:06 AM, 23rd May 2019
About 4 weeks ago

Reply to the comment left by Lesley Thomas at 22/05/2019 - 08:49
Thanks Lesley, thats interesting to know ref the tax breaks. I will need to google more to find more info since accountants I have spoken to, don't seem to know

Sarah-Jayne

11:07 AM, 23rd May 2019
About 4 weeks ago

Reply to the comment left by CayC at 22/05/2019 - 12:56
HI CayC, Do you let for minimum of 3/4 nights or a week or daily/

Sarah-Jayne

11:08 AM, 23rd May 2019
About 4 weeks ago

Reply to the comment left by Neil Patterson at 21/05/2019 - 20:57
I don't have consent yet, do you think that will be fairly straight forward or will they make me remortgage onto a holiday let mortgage. The problem is, that if it isn't successful then I will switch back to BTL, so would like the flexibility

1 2

Leave Comments

Please Log-In OR Become a member to reply to comments or subscribe to new comment notifications.

Forgotten your password?

OR

BECOME A MEMBER

Resolution Foundation - 11.2% of population own multiple homes

The Landlords Union

Become a Member, it's FREE

Our mission is to facilitate the sharing of best practice amongst UK landlords, tenants and letting agents

Learn More