Investing in holiday lets has become increasingly popular in recent years. Steadily-growing demand for staycations and the burgeoning business travel market means more people than ever are looking for the ideal short-term getaway — a home away from home.
The varied nature of potential clientele means there are several options for would-be holiday let owners to choose from when setting up their business — from city-centre apartments to idyllic tiny houses in remote parts of the countryside. Provided they’re fully-furnished, these meccas for mini-breaks can command an impressive return on investment, as long as you’re willing to put in the required hard work. (Spoiler alert — there’s no heavy lifting with us, as we’ll discover later).
Before taking the plunge, however, it’s important to have a solid understanding of the basics; what constitutes a furnished holiday let, the various investment options available to you, and where your new property should be located. The good news is, this is exactly what we’re about to cover in this article. Read on to find out more.
What is a Furnished Holiday Let?
As the name suggests, a furnished holiday let (FHL) is a building that’s fully-furnished and is commercially rented-out to guests. To qualify as a FHL, the property must:
- Be situated in the UK or European Economic Area (EEA)
- Have sufficient furniture to accommodate normal occupation
- Be let out commercially, ie. with the intention of making a profit
- Get booked out by guests for at least 105 days per year
- Not be let out on a long-term basis (more than 31 consecutive days to the same people) for more than 155 days.
Provided you comply with these requirements, your holiday let investments will be defined as a business, potentially unlocking a whole load of benefits, such as tax incentives. For more general information on investing in holiday lets, check out our blog on the subject.
5 Options for Investing in Holiday Lets
Holiday lets come in various shapes and sizes, so how do you know which is the right one for you? Location is a factor, considering city centres are more likely to consist of high-rise apartments, while countryside retreats will be made of cottages and lodges. The type of clientele you wish to target is also an important point to consider, as someone travelling on business will have vastly different requirements than a family on their summer break.
Your main options for investing in holiday lets are:
Apartments & Flats
Perfect for business travellers and city-breakers, these often high-rise dwellings will be in the thick of the action and close to popular tourist attractions or commercial hubs. Usually modern and spacious, a flat or apartment can make guests feel like they’re in a home away from home, full of creature comforts.
Seaside Cottages
People do like to be beside the seaside, so you may want to consider investing in holiday lets that are close to the coast. More suited for families wanting to make the most of the (somewhat unpredictable) British summer, a cosy cottage would be an ideal building to unwind in after a day at the beach.
Caravans & Lodges
Getting back to nature and escaping the hustle and bustle of everyday life is another popular choice for holidaymakers. A caravan or lodge nestled in the countryside can help make this dream a reality, creating an idyllic setting for guests to relax and unwind.
For the most environmentally-conscious clientele, recycled, off grid, shipping container homes represent a unique twist on the traditional camping holiday. Powered by sustainable energy sources and complete with modern technologies like WiFi and air conditioning, these delightful dwellings give guests the perfect opportunity to leave the rat race behind and refuel their body and mind.
Yurts & Shepherds’ Huts
Another more left-field suggestion for holiday let investment opportunities, yurts (round, insulated tents) and shepherds’ huts (types of tiny houses) can make fantastic choices for those wanting to engage with the phenomenon known as glamping. Typically located in more rural areas, these properties are a real break from the norm and make for more unique vacations.
Canal Boats
For clients who fancy a nautical adventure, but are put off by the thought of sand getting everywhere and seagulls stealing their chips, canal boats could be the perfect solution. Your guests could set sail through the winding waterways of the UK and be captain of their own vessel for a few days — now who wouldn’t want that?
Where Should I Buy a Holiday Let?
Location is key when it comes to investing in holiday lets. You want to be where demand is highest and the potential to make a profit is strongest. Another element to consider is the type of guest you’re wanting to target. After all, there’s no point going for a countryside cabin if you’re trying to appeal to business travellers.
Once you’ve established your market, you really are spoiled for choice with the UK’s rich and diverse landscape. For cities, you have the usual suspect of London, but also places like Devon and Dorset which have average rental yields of 3.6%–4.2% and 3.67% respectively. If you want a more rural location, you can opt for places like the Peak District or Northumberland. The possibilities are endless.
Investing in Holiday Lets Made Easy
If you dream of investing in holiday lets but don’t know where to start, we have the perfect solution. We offer a range of options from helping you set up your own glamping business, to owning an off-grid cottage on our private land, our service is tailored to your unique circumstances, requirements, and goals.
Our success with our very-own sustainable glamping company, demonstrates that we know a thing or two about this blossoming industry — making us perfectly placed to get your venture off the ground. We can take care of everything for you, such as sourcing the perfect location, dealing with planning permission, and even marketing your business.
To find out more about how we can help you make passive income while letting us do all the legwork, check out our blog or contact our team today.
