In the context of holiday letting, what to buy covers a number of areas and choices which can dramatically affect the return on investment. This section covers property characteristics such as views, number of bedrooms, parking and local amenities which will affect a holiday home’s letting income potential.
An impressive view, either coastal or countryside, can add a healthy premium to the rental income but also improves occupancy. However this will be reflected in the purchase price. Any increase in the purchase price, say 20% extra for a view, needs to be reflected in at least 20% extra in terms of rental income. Note this is not just the rental price, it is the annual rental income which can be improved by better occupancy.
The number of bedrooms can influence which market will be attracted to the holiday home. Larger properties (3 bedrooms plus) will appeal to families and extended families such as the ‘greycation’, the trend for 3 generations of a family to holiday together to save money. Smaller properties with one or two bedrooms can achieve equally high levels of occupancy by appealing to retired couples who prefer to holiday outside the peak periods.
Outside facilities can play an important role in a successful holiday let too. Parking is the main one to consider and is especially important if on-road spaces are scarce in the immediate area. This can be compounded at peak holiday times where many more people are in the area. Gardens, decking areas and patios can be attractive in the summer months, while storage areas for kayaks or bikes may extend the appeal to niche groups.
What type of property may well demand on the supply in the chosen town or region. Old world cottages have broad appeal but can be cost more to maintain, whereas apartments may have no or shared outside space but may be easier to maintain.
Buying on a holiday park is a very popular option for holiday homes with many parks offering guaranteed income schemes and a full ‘hands off’ management service, though this may involve a different type of ownership scheme rather than a freehold or leasehold scheme.
Other considerations include what amenities are within walking distance, such as shops and restaurants, neighbours and security.
