Rent a property to then run as a holiday let

[kendalcottages]

Whilst I'm not 'starting out' as such, this seemed to be the best place to post this, as I explore starting with a second property.

As you are aware, we already own and let a riverside apartment in our town, and this has been going reasonably well. With time, we would like to add to our 'portfolio' but at the moment feel that we'd been stretching ourselves a little too much if we bought a second property.

An opportunity has arisen, though, to rent a property which we could then sub-let as a holiday apartment. It would work for us as it is close to home (we could walk to it), so easy to service, has some nice views and is finished to a good standard inside. There's no furniture but carpets and curtains are already there. It can comfortably sleep 6 (so different to what we currently offer), has a small garden/decking area and plenty of parking.

Obviously, if we were to take this on, we would need agreement from the landlord to use it for the purpose we intend (we don't think there's a problem in this respect - we have already spoken to him), and we would need some kind of long term agreement on the lease to make it worth our while if we're going to the expense of furnishing it, and everything else that would be involved.

Does anyone here already have a similar arrangement?

Any advice?

Anything to look out for?

Thanks.

[Nemo]

Interesting idea KC and one I had thought about myself at a previous juncture!

Looking to the future, how long would the rental agreement last, how often and by how much would the rent go up? How would you feel if the landlord's circumstances changed and he had to sell? Would you be in a position to buy? What if you couldn't and you had a successful existing business that you might lose?

I can see it's a cheap way to get a second rental, but I guess it depends on why you want that rental; short term income, to create a portfolio without huge investment, a stepping stone generating income in the longer term to buy another property? Would it matter to you if that second property had to be a different property (if you lost this at some later date) and you had to start all over again?

Just from my short term experience with having two, it's not nearly as easy as I thought it would be to transfer people's allegiances from one property to another.

[apexblue]

How would you feel if the landlord's circumstances changed and he had to sell?

This would be my concern having just witnessed a neighbour sell their holiday rental with no concern for the holidays already booked for this year.

[Bellywobble]

We did it for a year. It worked well but I had to give it up as I was offerred work for a year and couldn't do that as well as manage the two villas.

[Martha]

it's quite common here, slightly to my surprise. A lot of people will rent a place and run it as a catered chalet for a season or more (one place I know of was run for six years like this). We've been asked a few times to let ours out for this purpose.

For some it's a way of taking a few years to live and work in the Alps, some are gaining experience and saving to get their own place, and some have one place already and are expanding as they have more demand. It's generally leased for a full year up front, and I would imagine that they don't take bookings in advance of the lease running out.

It's a bit different because you have the catered aspect, and quite a few people will run their offering with the same name, in different places from year to year - they are quite open about it and no-one seems to mind.

[booboo]

I think its a good idea. We have a place in Cambridge Uk that we let long term, I would not have a problem as a landlady. Would want extra for wear and tear.

I think whatever new venture I enter into there is a lot of what if's. For me its about doing the maths, what can I afford to lose

[T.S.]

(Also speaking as a landlady) I wouldn't object to this arrangement in theory, but first I would want to have a very clear agreement about building maintenance and repair: in particular, which repairs are the responsibility of the landlord and which fall to the tenant? The answer to that question is usually pretty clear-cut for residential rentals and also for commercial rentals. However, your proposal might create a bit of a hybrid situation and the rent I would charge would depend upon the amount of additional maintenance I might anticipate. My main areas of concern would probably be the large systems, such as plumbing, electrical, and HVAC. Maybe the exterior paving, as well.

[kendalcottages]

Thanks everyone. Just by way of an update, we decided against this in the end. We just couldn't seem to get the figures to quite stack up, whichever way we looked at it. In short, we felt the property (which can sleep at least 6) might be easy enough to let in the peak weeks but would struggle out of season. Although it had the sleeping space to potentially sleep more than 6, it didn't really have other facilities (eg. size of kitchen) that would suit larger parties, so gut instinct told us it wasn't quite right.

[harcourtv57]

Hi Kendal

Only just seen this - if you consider it again in the future would be interested to know how you get on as we are thinking of doing something similar. We also though have a holiday let which we are no longer allowed to let out in this way, as the leaseholder objected . . . . so have had to find a long term tenant which was a bit of a blow as it was our most popular property