Finance Risk v Playing safe

[Redfox]

Hi all,

Some of you may know that I have posted once or twice over the last 12 months or so and have been looking for a property.

Well as a refresher in case you dont know I am looking in the Peebles area which is in the Scottish Borders. I have seen several promising flats but usually after a second viewing I have not been keen for one reason or another.

Basically my budget is only going to strech to a one bed flat which depending on size type etc will cost around £80 - 90.000.
A Two bed is easily 120.000 A big jump.

Now then I have been given some pretty sound advice so far and hope you can help again and I know what I am asking is relative to the risk I am willing to take but in a nutshell heres my dilema.

I can afford the payments on a One bed Property if there is no income! I dont plan it that way but I may have void periods etc.

I can borrow more and go for a two bed but 30 grand more is a lot and I cant really afford that if I have a worst case senario.

One thing I have noticed on my research is that most self catering house/apartments are 4, 3, 2 bedroom not seen any one bed places so maybe my place would appeal to couples? After all it would be a lower rate.

I know some of you might think this is soley a decision I should make but a little advice or opinion would help and be very welcome.

Here is a link to a flat I am viewing next week gives you an idea of what the one beds are like. This just about ticks all the boxes for size, layout, location. & it does have a garden although shared it is private and south faceing. Lots ive looked at for same money have no garden at all. Reality is setting in I am not going to get anything bigger or better at least not until I make my first one a sucsess Think this one would be nice redecorated with a new fireplace as a focal point etc.

Please comment opinions are what I need and gut feelings.

http://www.cullenkilshaw.com/site/prope ... pRef=10869

Rob

[dizza2560]

Hello,

My gut instinct is that a sleeps 4 is a better bet than a sleeps 2. Just browsing on lay my hat shows that there is strong demand for sleeps 4, but sleeps 2 needs to be very high luxury specification.
Just looking at the property I think you would be ill advised to promote it on the external photo, although the inside looks fine.
We are also newbies, our first guests come in a fortnight, so I am sure more experienced hatters could give a better view, but I would think it unlikely you would get no bookings.

We are with Sykes and have been live with them since January, first available date at the start of May, and have 11 weeks booked, and only an external photo on their website so far, so have faith.

[Redfox]

Come on everyone dont be shy im looking for some advice a little feedback.

Cheers
Rob

[wallypott]

It looks like a nice property, but completely out of my comfort zone. How long has it been on the market? Would it be easy to sell if it didn't work as planned?

[Redfox]

It looks like a nice property, but completely out of my comfort zone. How long has it been on the market? Would it be easy to sell if it didn't work as planned?

Thanks for the input its only just came on 2 weeks ago. What do you mean by outside your comfort zone? A one bed? the area? As for re-sale I am sure it would appeal to retired or ft buyers but who knows.

[wallypott]

No outside my knowledge zone - I have two beds and 6 beds in rural normandy so Peebles not something I know anything about.

[booboo]

We sleep two, we have had enquires for more beds.
Maybe if we sleep four we would we get someone looking for six. I dont have enough experince to advise. What we are going to do is open up another room so we can sleep four. Would it be possible to add on or open up the attic if you need to accommodate more?

Sleeping two is very limiting in my experince.

[tavi]

Hi Red,

I have a one-bed sleeps 2. So I would have no hesitation in telling you there is a niche market there. (The fact that mine is in a completely different location and market to yours is, I think, irrelevant). We started last July so not yet done a full year, but we have exceeded our target and so far we're quite pleased.

We originally thought we'd sleep 4 (using a sofa-bed) but discovered we could let it so easily to couples that we now stick to sleeps 2 - less wear and tear on the apartment, less laundry, less cleaning! Majority of our guests have been couples in 50's and 60's, with a few young couples and one pair of friends.

Sounds to me like your instinct is to play it safe in terms of your investment - I think you should follow your instinct.

Location is everything, then furnish/decorate to a high standard (get advice on this if necessary).

This place looks interesting, very near the centre of the old Peebles Village...excellent for couples wanting rest, relaxation, a bit of sightseeing, a nice meal out....
What does the front look like?
That river in the photo...where is it? Is it close to the property? The shared garden...is it possible to make the patio a little private so that guests have the option to have breakfast out there without seeing the neighbours if that's what they prefer?

[Harborfields]

What kind of accommodation would YOU be looking for when you go on holiday? Presumably you are planning to make use of this property yourself, at least in part, you're not buying it solely as a business proposition -- or are you? Are you likely to invite friends or family to stay with you when you are there?

What types of holiday-makers are attracted to Peebles? Couples? Families with young children? Two couples traveling together? Consider the nature of the attractions in the area and the demographics of the visitors.

In our experience, two (or more) bedrooms are more versatile and can satisfy a wider range of guests than a single bedroom unit, but one can also get a lot of mileage out of a single bedroom unit if you can offer additional sleeping arrangements in the living room.

[roxytoo]

I would choose the smaller mortgage and market it as sleeps 4 with sofa bed in lounge. You can change later to couples only if you need

[Wendy@NorthIdaho]

Looks like you can take advantage of the fact it has a water view, I'd play that up quite a bit... I too would see if you could make your section of the garden a little more private, some lattice, plants, etc..
Does it come furnished? I looks very nice so wouldn't take much to get it ready for renting as is. I too would probably add a sofa bed for more flexibility and then if it's wildly sucessful you can always only advertise for 2 instead of 4 but you will have more options with the sofa bed.

I have rented apts in Rome and Paris that were only 1 bedroom, we had 3 people 2 of the 3 times and loved the space we were in and the fact that it was less expensive than the 2 bedrooms. Although if it's in a good location that does diminish as most are willing to pay more for a central spot.

I too would go with my instincts on the $$ or pound! With the economy you don't need an ulcer too if it takes a while to rent out!

My 2 cents,
Wendy

[tavi]

yes, good idea...put in a really good sofa bed with a sprung mattress and market it for 4.

That's how we started then once we realised our best market was couples we no longer mention the sofa-bed.

However, it's still in the apartment (of course) and I recently offered it to two ladies who were booking. They were rather pleased as it meant that each had their own bedroom space.

Your apartment has some very strong points in its favour. Lovely high ceiling in lounge, nice wooden French doors, smart neutral kitchen.... the patio needs some work but not much.....

[marsh frog]

It is in a good location - will appeal to couples wanting to explore Edinburgh and surrounding area without the associated noise/price of a central Edinburgh property.

We have a small 2 bed cottage but a good third of our guests are couples. Approx 45% of our guests have dogs so consider whether you are able to accept dogs too.

When we started last summer we had put a large deposit down & the rest is a mortgage. We planned for a worse case scenario by deliberately keeping a pot of money to pay the smallish mortgage for the first year in case we had absolutely no guests! As it happens we have been delighted at how our first 9 months have gone, but a contingency plan is a good idea if you can manage it.

I think a good sofa bed in the lounge is an excellent idea too

[Giddy Goat]

Is the sitting room actually large enough for a sofa bed when extended? It looks as if there might have to be a bit of a reshuffle of furniture which is not ideal when you're on hols ...

Going on what has already been said, it sounds as if a 1-bed property would be a viable investment, but perhaps you do need to be sure you can comfortably accommodate a second couple on a sofa bed if you can swing it. At least by having that level of flexibility you've extended your potential market a bit.

[Redfox]

Thanks for all your comments so far

I am going to view the property Friday morning and according to the floor plan the living room is 15ft,4 x 12ft,3 so I think it will be able to get a sofa bed in easily.

The picture of the property is taken from the back so I would hazzard a guess that the front is nothing special, I do know the litte road and its pretty nice. The stream runs along the back garden and I would plan to revamp the patio area, corden it off somehow like mentioned and even have a little storage shed for bikes.

I am not from the area but from what I have learned it appeals to Golfers,walkers and people just wanting to explore the area. Id say a good percentage will be couples late 40s right through to retirment age and beyond. There are good mountain bike trails at innerleithen, 7 staines & one at glentress both being within 6 miles. Innerleithen is cheaper to buy but peebles is a little more upmarket and will attract more couples (I think).

I am wanting to get in to holiday let for 2 reasons, Its something I feel can be a good investment and fun to do. Always wanted my own little business and If I can get a return of more than my deposit sitting in a bank well id be happy enough.

2nd reason is the most important, my daughter who is 3 years of age lives with her mother in that area in fact within 10 miles. I have had her every other weekend since she was 3 months old.

Her mother moved back to Scotland 2 years ago so I travel every other weekend 80 miles each way and bring her to mine, I guess a property up there will help matters espcially for her as she gets older.

Her friends, school and life will be there but if I have a place I can be part of it.

I want to be able to use the place at weekends (not all ) for me and her. I would sleep in the living room and she can have the bedroom (I would rent it out when I could and block off one or two weeks and weekends)

So although im set on what I want to do finance is key guess a one bed is the way to go for me it would leave me a few quid to revamp the patio, fire etc.

Any more input would be much appreciated.

Rob