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Are you wanting to let your lodge or holiday home? Letting your holiday home can be a significant venture, as you’ll enjoy higher tax relief on your mortgage payments for a holiday home rather than with standard housing. Another thing is that you can earn quite a hefty amount of money letting out your lodge, providing you with an opportunity for passive income.
Does both sound good to you? It sure does to us! But before you get started letting out your holiday home, here are some tips to keep in mind:
1. Select the Right Property
Before you start letting your holiday home, you will first need to purchase the right property.
Unless you’ve got plenty of experience under your belt, the best way to go about purchasing the right property would be in a place that you thoroughly enjoy spending your holiday in. Not only does this mean that there’s a good chance someone else out there also enjoys going to the same place, but you’ll also be able to set renting prices that make sense. Plus, the holiday home doubles as accommodation for you while it is empty.
2. Remember to Claim Allowances
Because you’re using your home to do business, you’ll get to enjoy better tax advantages. For example, you can claim back the money you spent on furnishings and even claim tax reliefs.
However, do note that not all allowances will apply to you. You will need to qualify for each of these allowances, and to do that, your home will need to satisfy specific requirements. For example, the holiday home must be let for at least a set number of days, and your rent should be of market value.
3. Live in the Holiday Lodge
While you can spend some time checking around the home for problems and issues to be addressed, it will never be as effective as actually staying in the property for a while.
With that said, we highly recommend that you live in the lodge for a couple of weeks to a month every year. This will allow you to discover problems renters might face, such as noisy neighbours, problematic boilers, and the like. Plus, this is a good excuse for you to go on vacation and still say that you’re working!
4. Choose the Correct Mortgage
There are many mortgages to choose from, so don’t make the mistake of choosing the wrong one. So which one should you be choosing, then? The answer is simple: just go with the normal mortgage. Opting for other mortgage options such as a second residential mortgage or a buy-to-let mortgage might stop your plans of turning the property into a holiday home. That’s because such mortgages will more than likely prohibit you from doing so.
We highly recommend that you talk with a mortgage broker about this to be 100 per cent sure that the mortgage you choose is perfect for what you have in mind.
Conclusion
Purchasing a holiday home to let is a pretty big business venture, especially if the place you live in is a hotbed for tourists. If you do opt to take this venture on, remember the tips we’ve shared with you above! That way, you can make the most out of your business, and ensure that both you and your tenants are happy with your holiday home.
Are you looking to own a luxury lodge in the Lake District? Contact us today through our website!
