Press Release Summary: As a growing number of people seem to be turning away from traditional hotels and opting for short term let or holiday accommodation we look at how this growing trend affects the buy to let investors, the advantages this brings and how the property needs to be presented including the correct landlord furnishings and features.
Press Release Body: The key difference between the hotel market and this buy to let sector is price and quality. Many of the properties in this sector have luxurious fittings and comforts that you would expect to get from a 4 star hotel at a very affordable weekly rate. These luxury features become even more important for families who can enjoy a luxury spacious apartment with separate living and sleeping area compared to a cramped hotel room or the businessman who no longer needs to work in his bedroom.
Amid considerable speculation about property prices and interest rates these little gems can considerably boost the buy to let investor. Apart from the long term capital growth and the higher rental yields the buy to let investor with furnished holiday lettings can qualify for tax benefits. With 'normal' residential lettings only qualifying for non- business taper relief furnished holiday/ short term lets do qualify for full business asset taper relief this can result in substantial savings when selling.
There are also tax savings to be made when not selling. Many investors find that during times of high interest rates new properties in their portfolios could take a few years to come out of the red. With short term holiday letting buy to let investors do not need to carry these losses forward but can offset them against other income. Short term holiday properties also benefit from rollover relief where any sale profits can be reinvested without fear of losing profits in taxes. Finally, where lettings are short term and the owner services holiday makers Inheritance Tax can also be avoided.
There are several qualifying factors which have to be complied with, these are:
- Situated in the UK and fully furnished. - Available to let days a year and actually let for at least 70 days a year - Not occupied for more than 31 days by the same person in any seven month period. - Let to holidaymakers/ tourists and not local residents.
There are also several management factors to take into consideration in this buy to let sector: - Properties must be maintained and cleaned regularly. - Landlords remain responsible for all utilities and council tax bills. - The frequency of tenants results in more frequent upgrades for wear and tear or breakages plus increased inventory management.
Despite these factors for those prepared ensure these factors are adhered to, this niche can be very lucrative.
To enter this niche and compete at the high end level against hotels investors should look for properties in high tourist areas with easy access to the main attractions eg. city, lakes, sea. Apartments and houses must be fully furnished to a very high specification. (www.lodgefurniture.co.uk can supply readily available superior furniture packages and products suitable for all your buy to let requirements). Properties should also be high technically specification with broadband access, digital television, stereos, DVD's plus luxury fitted kitchens.
Obviously, this is the top end of the holiday rentals market and similar tax relief can be gained in the lower end but it is at the top end where any tax savings become more apparent and where demand is becoming apparent.
2022
