Recap of holiday home news: 12 January 2010
It’s time once again for our holiday home news round up, here’s what’s been happening: 10 tips for buy-to-let success, non-disclosure insurance law may be changed, is it wise to invest in a holiday cottage? National Trust demands extra payment for cottage holidays and the Holiday Cottages Group promotes self catering holidays.
After two decades investing in 700 buy to let properties, the former maths teachers Fergus and Judith Wilson are selling up.
Their strategy was simple: the rent covered their outgoings and capital values rose, then they would re-mortgage and reinvest. But is there more to it?
Here are 10 buy to let tips from two former teachers with a £180m property portfolio:
1 You are in the business to make money – don’t get emotionally involved with your tenants
2 Buy 2 or 3 bedroom houses and never flats (except in London) there is also limited demand for 4 bedroom houses
3 Buy new or nearly new to avoid the cost and time spent doing DIY, they also tend to attract more professional tenants
4 Do tenant checks to ensure they are creditworthy and have a guarantor who is a home-owner
5 Leverage your money – if you have £200,000 to invest, don’t buy one £200,000 property, buy two and put £100,000 down on each house
6 Don’t paint your house lots of colours – magnolia and white is what most people want to rent
7 Avoid ex-council houses & bungalows – ex-council houses rent will be lower and with bungalows, you can pay 65% more and receive only 15% more rent than a similar size 2 or 3 bedroom house
8 Buy close to home – where there is rental demand, rising prices and avoid areas with a big retirement community
9 No smokers or mechanics – but dog owners tend to keep the house clean
10 Enjoy the experience of being a landlord
Insurance non-disclosure law may be changed
A parliamentary bill is proposing that a law that dates back to 1906 and puts a “duty of disclosure” on the policyholder be changed.
At the moment, the obligation is on the consumer to disclose not only things they have been asked for, such as known medical conditions, but also things that they haven’t which could later turn out to be significant.
Claims made on motor, travel, household and health policies are routinely turned down by some insurance companies due to non-disclosure.
One impact of the possible changes could be the increase in the number questions insurers ask on proposal forms…50, 100+ who knows.
No tax breaks and saturated markets – is wise to invest in a holiday cottage?
After 15 years in the holiday lettings business, one owner is calling it a day – due to saturated markets, high expectations from holidaymakers, withdrawal of tax breaks and better returns from long term lets.
But is wise to invest in a holiday cottage?
Although running a holiday letting business can be very hard work, those who invest in the right type of cottage in the right location can reap rewards. A mixture of summer holiday lets and long term winter lets could also be an alternative letting strategy.
National Trust demands extra payment for cottage holidays
The phone lines at the National Trust were jammed as customers called to complain after the National Trust increased the cost of cottage rentals on more than a thousand existing bookings. Customers with bookings in the first four months of 2010 were sent letters asking them to pay a steeper ‘revised price’.
In its defence, the Trust says guests were advised at the time of booking that prices are reviewed. Its terms and conditions state: ‘The holiday price is subject to change in the event that the price is increased during a pricing review of cottages.’
Customers unwilling to pay the new prices are being offered a refund.
Holiday cottages group promotes self catering holidays
Following the announcement that it is spending more than £8 million over the next 12 months marketing the benefits of a self catering holidays, the Holiday Cottages Group recently launched its television advertising campaign which is set to run from Boxing Day to March 2010.
Have you seen the TV advert yet?
Do you think their marketing activities will increase demand for UK cottage holidays or will the washout summers over the last few years mean holidaymakers look abroad for holiday rentals?