A holiday let is a great investment opportunity that can provide a steady income and the potential to generate wealth. Taking on a serviced accommodation investment comes with several benefits including increased flexibility, high returns, and great tax advantages.
If you’re wondering if buying a holiday let is right for you, we’ve compiled 10 reasons why it makes perfect sense as an astute property investor.
Read on to find out how adding a holiday let to your portfolio can help grow your wealth.
What is a holiday let?
A holiday let is a form of serviced accommodation where you can retreat for a short-term stay.
Much like a hotel, holiday lets provide the necessary amenities and space to make your stay comfortable. However, holiday lets offer extra features such as the privacy of an entire apartment or house or the convenience of having access to laundry and kitchen facilities.
Serviced accommodation lets range from one night stays to those lasting up to a few weeks, so holidaymakers who are looking for a more personal experience than staying in hotels won’t be left wanting for convenience or comfortability.
Why become a holiday let owner?
There are many reasons why you should become a holiday let property investor. Here are 10 reasons to invest:
Reason 1: It is an investment opportunity
Investing in holiday lets greatly benefits owners, providing them with a long-term solution to store their capital.
Whether this investment is for retirement income, to provide holiday accommodation for family and friends or simply as a secure alternative to more volatile investment options, holiday letting has many advantages.
Furthermore, owners may be entitled up to 100% council tax relief on the property as small business tax relief. Serviced accommodation such as holiday lets can be a wise choice if you are looking for profitable yet low-risk investments with solid returns.
Reason 2: Take advantage of great locations
Investing in holiday lets is a lucrative option for those seeking to benefit from great locations. With holiday lets located in picturesque, rural settings or near popular tourist spots, rental yields are often higher than those produced by buy-to-let properties. In peak holiday seasons, holiday let owners can make as much in a week that a buy-to-let property would ordinarily be expected to make in a month.
Although holiday letting comes with some sparsely populated weeks each year, serviced accommodation located in desirable areas can still produce enhanced annual yields compared to traditional buy-to-let investments.
Popular locations for serviced accommodation include seaside resorts and city centres, enabling easy access for visitors to unbeatable locations and attractions.
Reason 3: Boost the local tourism industry
Holiday lets are having a major positive impact on the UK’s tourism industry. According to a study conducted by the London School of Economics commissioned by holiday rentals website HomeAway into this lucrative holiday accommodation sector, holidaymakers renting private holiday properties spent more than £4.35 billion in the UK during 2017-18, creating approximately 95,000 jobs across the country.
As a result of holiday let visitors spend net additional expenditure being up to £2.2 billion a year is higher than any other type of holiday serviced accommodation such as hotels or B&Bs – making holiday lets a significant factor in driving socio-economic growth within local destinations.
Reason 4: Decoration is up to you
When it comes to holiday lets, the right furnishings are key to creating the ideal look, feel, and atmosphere for guests.
Everything from carefully chosen furniture, plush bedding and cosy soft furnishings, to unique artworks and carefully styled accessories should come together in perfect harmony to transform serviced accommodation into an inviting ‘home away from home’ environment.
A careful selection of items that reflect your own style preferences can help take your holiday let from bland and uninspiring to a warm and welcoming space bound for success in the holiday market.
Reason 5: It is a rewarding project
Buying a holiday let can be a great project for those looking for a rewarding and meaningful activity.
Working on such properties can bring a sense of accomplishment that comes with turning it into a quality serviced accommodation that you can be proud of.
Reason 6: Experience a community
Buying a holiday let is an exciting opportunity to become a part of a new community. Whether you are looking for holiday homes or private serviced accommodation, you will quickly learn about the area and people, creating a bond with the community in no time.
With that sense of belonging and the chance to explore different ways of life; the holiday rental can provide so much more than just a place to stay. Whether you decide to stay long-term or are just passing through, your holiday let could be the catalyst for many amazing new experiences.
Reason 7: Allow people to live their dreams
From beachfront holiday homes that allow you to wake up to the sound of lapping waves, or city holiday lets close to all the major attractions, holiday lets enable guests to live out their holiday dreams. With direct access to a beach, holidaymakers can enjoy the wonders of golden sands or pebbly coastal walks and runs, right on their doorstep.
For those considering a country retreat, there are plenty of amazing places waiting to be explored and adventures just around the corner.
The serviced accommodation is the centre of the holiday getaway and springboard to achieving dreams whilst on staycation.
Reason 8: Great tax benefits
Holiday lets are classed as a business in terms of taxation, so they come with attractive tax benefits that other investments don’t have.
It’s perfectly possible to deduct 100% mortgage interest costs from rental income before your tax bill is calculated; plus there are also capital allowances that can be taken advantage of for wear and tear or any property improvements made over time.
Reason 9: Utilise the property for yourself
Investing in a holiday home can reap long term financial rewards, however the benefits go much further than that. According to surveys, 8 out of 10 holiday let investors plan to gives themselves and their families access to the property while also renting it out.
This is useful from a practical point of view as they are able to inspect the holiday let and make sure it is up to scratch for future visitors. Furthermore, holiday homeowners can experience the same enjoyment and relaxation that their holiday letting guests take away with them.
Reason 10: Take advantage of demand
UK holiday lets continue to be booked in 2023, despite ongoing financial pressure on household incomes and the reopening of international travel. This is according to a recent survey by audit, tax and consulting firm RSM UK which revealed that 36% of respondents are considering a one to four day holiday break in the UK.
28% are likely to book a five day holiday or longer in the UK – down slightly from 29% in 2022. It appears holiday makers living in the UK do not necessarily need to travel further abroad for a relaxing break as holiday lettings scattered around the country have proven especially popular.
Thanks to its flexibility and wide selection of attractions, holidaying closer to home continues to remain an attractive option for adventurous travellers – perfect for holiday let investors to take advantage of.
How to get started with buying a holiday let
To get started with investing in holiday let serviced accommodation, Touchstone Education’s free webinar, ‘Four Simple Steps To Set Up & Start Profiting From Serviced Accommodation In Just Four Weeks’ is taking place at 8pm on Monday 6th February.
The Serviced Accommodation Blueprint course is designed to teach you how to take advantage of the UK’s fastest-growing property strategies, how to accelerate the process of obtaining deals and how to safeguard the longevity of a serviced accommodation business. It will teach you how to maximise profits using proven, simple strategies.
Alternatively, Wealth Through Property is the UK’s leading 2-day property investment course. It is designed to provide you with specialist knowledge of proven investor strategies. Learn how to get started and build your property portfolio and gain real-world advice.
To find out more information about Wealth Through Property and the other courses we offer call us on 01302 897131 or email email@example.com.