Hello everyone
We are a young couple in the countryside in the middle of nowhere with a little house and pool which we get a modest income from. We don't have family on this side of the world and so we continually worry what the hell will happen to the kids & who will run the place if we both die.
You see we have two very young kids & we want the business to be run for them until they're 18. To provide a source of income for the kids upkeep & the capital won't be thrown away on the wind.
The structures to see this implemented will have to be drafted by a lawyer using will and trust.
My question is who can we get to run the marketing & bookings & liaise with the key holder/manager neighbour on our kids behalf? Some professional & reliable company who can deliver results on target based on previous years figures that (in our absence) could report to the trustee company.
I see other LMHers mention Sykes in the UK & Ireland & I'm not sure they offer this type of service if the property is in the Med as ours is.
Anyone know of such a reputable company that handles bookings & marketing based in either UK or Ireland preferably (as the trustee would speak English).
Morbid topic but kind of important for the kids future if God forbid something happens to us.
Have you thought about this?
Have you made similar such arrangements?
Do you want your business "flogged" if it's to the detriment of your children's future?
Many thanks in advance
Seaturtle
Management co. to run place if we die?
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kevsboredagain
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Don't quite follow. If you die and your kids are still much younger than 18 shouldn't you be worrying more about who looks after them rather than keeping a property rental business going? You take out life insurance for such purposes.
Companies like Sykes simply advertise your property and take juicy cut on bookings. They still need the owner to maintain it.
Companies like Sykes simply advertise your property and take juicy cut on bookings. They still need the owner to maintain it.
Many thanks for the tip about Sykes Kevsboredagain.
The guardianship part is simple - the will sets out that my sister will look after them.
Perhaps I could have been clearer.
If I give some figures plucked out of the air.
If my property is worth €200k - in the event of our death the trustee could sell the property & less any fees/dues - €200k ish is what the kids would get. Money on the wind.
Whereas if the income was say €35k net after fees tax etc. If the trustee holds the property in trust for another 15 years - the kids would get 15 years x €35k = €525k net income & still have the property making money for them. Plus hopefully capital gains.
This to me seems the better option but finding a reputable English speaking co. who will place the ads with rental sites, market, answer enquiries & report to the trustee co with respectable returns - this is my search...
The guardianship part is simple - the will sets out that my sister will look after them.
Perhaps I could have been clearer.
If I give some figures plucked out of the air.
If my property is worth €200k - in the event of our death the trustee could sell the property & less any fees/dues - €200k ish is what the kids would get. Money on the wind.
Whereas if the income was say €35k net after fees tax etc. If the trustee holds the property in trust for another 15 years - the kids would get 15 years x €35k = €525k net income & still have the property making money for them. Plus hopefully capital gains.
This to me seems the better option but finding a reputable English speaking co. who will place the ads with rental sites, market, answer enquiries & report to the trustee co with respectable returns - this is my search...
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kevsboredagain
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35K income after taxes and fees on a 200K property??? Is that a prediction or actual figures? If those are real figures then you have a gold mine there.
Over 15 year the property would need a lot of maintenance so a simple 15 x net income calculation is completely unrealistic IMHO.
If I had to pay someone to do everything related to my two rentals, I would make no profit whatsoever. I have therefore told my wife, who is much younger than myself, to simply sell them and invest the money elsewhere if she cannot run them herself by that time.
Over 15 year the property would need a lot of maintenance so a simple 15 x net income calculation is completely unrealistic IMHO.
If I had to pay someone to do everything related to my two rentals, I would make no profit whatsoever. I have therefore told my wife, who is much younger than myself, to simply sell them and invest the money elsewhere if she cannot run them herself by that time.
Sure - we are remote ourselves and I've said something similar to my own wife if I die first.
As I wrote the figures were 'plucked out of the air' and '€35k net after fees tax etc' I meant after everything cost wise was taken out.
Thanks very much for your contribution nonetheless.
The search for such a company goes on & in the event someone knows of one then I'd look forward to hearing from that person.
As I wrote the figures were 'plucked out of the air' and '€35k net after fees tax etc' I meant after everything cost wise was taken out.
Thanks very much for your contribution nonetheless.
The search for such a company goes on & in the event someone knows of one then I'd look forward to hearing from that person.
So your sister has guardianship of the children.
Your sister is also one of the trustees who are holding your estate in trust for the kids?
The trustees employ an agent to manage and let the property on trust's behalf and to pay any income to the trust? The agent could of course also be the keyholder. Simple on the face of it but whether it's worth it financially.....and it's an enormous responsibility for your sister/trustees - especially if they're in the UK and the property is elsewhere.
You'd need a good local lawyer and a local letting agent - don't know where you are but there's English speakers in most parts of the world. Try AngloInfo.com
I think I'd have more peace of mind with a really good life-insurance policy, with the proceeds (in the event of your demise) being held in Trust for the kiddos.
Your sister is also one of the trustees who are holding your estate in trust for the kids?
The trustees employ an agent to manage and let the property on trust's behalf and to pay any income to the trust? The agent could of course also be the keyholder. Simple on the face of it but whether it's worth it financially.....and it's an enormous responsibility for your sister/trustees - especially if they're in the UK and the property is elsewhere.
You'd need a good local lawyer and a local letting agent - don't know where you are but there's English speakers in most parts of the world. Try AngloInfo.com
I think I'd have more peace of mind with a really good life-insurance policy, with the proceeds (in the event of your demise) being held in Trust for the kiddos.
Thanks T. My sister isn't a proposed trustee so she'd face no pressure from a business perspective.tavi wrote:So your sister has guardianship of the children.
Your sister is also one of the trustees who are holding your estate in trust for the kids?
The trustees employ an agent to manage and let the property on trust's behalf and to pay any income to the trust? The agent could of course also be the keyholder. Simple on the face of it but whether it's worth it financially.....and it's an enormous responsibility for your sister/trustees - especially if they're in the UK and the property is elsewhere.
You'd need a good local lawyer and a local letting agent - don't know where you are but there's English speakers in most parts of the world. Try AngloInfo.com
I think I'd have more peace of mind with a really good life-insurance policy, with the proceeds (in the event of your demise) being held in Trust for the kiddos.
The proposed trustee is a professional & independent trustee company & in the event of our deaths the proposed trust would seek a good return on the assets from the agent on behalf of the beneficiaries of the trust (kids).
You're dead right of course (as was K) about a good life policy - and that base is covered naturally.... but there's no harm in trying to set up structures that would best serve the kids interests in other ways if we are gone.
While trustee co's have their own chunky fees - there are also the benefits of passing assets to the next generation without estate duties on death is also advantageous. Plus a classic asset protection strategy.
Will try Anglo.info - cheers T.
Anyone else know a reputable English speaking co. that we could appoint as agent to market & handle enquiries for a rental properties also in the Med (not just UK)?
Which country is the property in ?
I would think you would need a LOCAL manager to be on call for any emergencies (e.g. water leaks etc.). What about other maintenance ? Who organises all that ? Who comes in to clean ?
By the time you have realistically organised and costed all this properly, I'd be exceedingly surprised if the net income after all costs and taxes is 20% of what you are estimating. Oh, and thats probably before the trustee co takes their cut from the gross.
I am an off-site holiday rental owner and I know how exceedingly hard it is to make any money out of this business after everybody who helps me has taken their cut..... and I do all my own rentals !
I would think you would need a LOCAL manager to be on call for any emergencies (e.g. water leaks etc.). What about other maintenance ? Who organises all that ? Who comes in to clean ?
By the time you have realistically organised and costed all this properly, I'd be exceedingly surprised if the net income after all costs and taxes is 20% of what you are estimating. Oh, and thats probably before the trustee co takes their cut from the gross.
I am an off-site holiday rental owner and I know how exceedingly hard it is to make any money out of this business after everybody who helps me has taken their cut..... and I do all my own rentals !
** Richard
PIMS: Holiday Rental Management system
They say we learn from our mistakes. That makes me a genius !
PIMS: Holiday Rental Management system
They say we learn from our mistakes. That makes me a genius !
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Joanna
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Whenever we've looked into it the only companies who provide a full management service including maintenance - emergency plumbers, annual electrical safety checks and so on, were very small and local. Also, there weren't many of them (I think there were about 3 in a touristy area of Devon).
You're more likely to find agents to run it as a standard rental on 6 month lets and, if you look at the figures, after everyone's taken their cut, that could well be more profitable. The only reason I can think of to keep it as a holiday let would be if you want your sister and children to be able to use it themselves.
You're more likely to find agents to run it as a standard rental on 6 month lets and, if you look at the figures, after everyone's taken their cut, that could well be more profitable. The only reason I can think of to keep it as a holiday let would be if you want your sister and children to be able to use it themselves.
Jo
Joint owner of Baker's Cottage in Chester & Chandler's Cottage in Sidmouth
Joint owner of Baker's Cottage in Chester & Chandler's Cottage in Sidmouth
As others have pointed out, it's not a very realistic aim to have. Running a holiday let business is really an owner run business; you invest yourself into that business and that's how the rewards follow. A faceless company would have no vested interest in keeping the standard high enough for holiday let purposes.
Tourists require high standards and leave reviews. With no owner in charge, I believe there is no way the standard would be maintained and the subsequent reviews would destroy the business eventually. Expecting trustees to get the best from a holiday let is just not going to happen.
As Joanna said, running it on an AST basis with residential tenants would be the sensible option.
Tourists require high standards and leave reviews. With no owner in charge, I believe there is no way the standard would be maintained and the subsequent reviews would destroy the business eventually. Expecting trustees to get the best from a holiday let is just not going to happen.
As Joanna said, running it on an AST basis with residential tenants would be the sensible option.
Thanks everyone for your points of view. I think that finding a local manager (a private person perhaps who needs the work) & who can handle many aspects of the property - may be the way forward.
While I'd agree that no one could intimately know or maximise our business better than ourselves, I firmly believe that this business isn't exactly rocket science either (& if we are honest with ourselves) that its entirely possible to find someone else trustworthy who (properly incentivised & overseen by someone else) couldn't return a respectable profit after all costs are cut out.
Survey other ads on HA/OD seems there a lot of rentals in the hands of property managers & they wouldn't be there long if they weren't delivering a reasonable return to the owner.
While I'd agree that no one could intimately know or maximise our business better than ourselves, I firmly believe that this business isn't exactly rocket science either (& if we are honest with ourselves) that its entirely possible to find someone else trustworthy who (properly incentivised & overseen by someone else) couldn't return a respectable profit after all costs are cut out.
Survey other ads on HA/OD seems there a lot of rentals in the hands of property managers & they wouldn't be there long if they weren't delivering a reasonable return to the owner.
seaturtle, it's clear that you want to try and do your best for your children but as soon as you hand control to someone else your bottom line will begin to erode for sure.
I've no idea which country your property is in but one UK scenario to keep money/control within the family might be to setup a limited company with say you, hubby and sister as directors and the children as shareholders (perhaps with different classifications). Shares may be held in a discretionary trust of some kind which could be arranged so that a child wouldn't be able to get full control of the asset until they were 18, 21 or whatever.
Have to say though, that sort of arrangement is usually up in the realm of the very big-money brigade and without wishing to belittle your asset I very much doubt whether it would be justifiable for the typical rental business (whatever that may be!).
One very important pre-req IF the property is mortgaged is to check the terms to ensure whatever you propose to do trust-wise is actually do-able.
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I've no idea which country your property is in but one UK scenario to keep money/control within the family might be to setup a limited company with say you, hubby and sister as directors and the children as shareholders (perhaps with different classifications). Shares may be held in a discretionary trust of some kind which could be arranged so that a child wouldn't be able to get full control of the asset until they were 18, 21 or whatever.
Have to say though, that sort of arrangement is usually up in the realm of the very big-money brigade and without wishing to belittle your asset I very much doubt whether it would be justifiable for the typical rental business (whatever that may be!).
One very important pre-req IF the property is mortgaged is to check the terms to ensure whatever you propose to do trust-wise is actually do-able.
.
Happiness is a journey not a destination,
So work like you don’t need the money,
Love like you’ve never been hurt,
and Dance like no one’s watching…
So work like you don’t need the money,
Love like you’ve never been hurt,
and Dance like no one’s watching…
seaturtle, do not get confused by the title of property manager in the ads. In the vast majority of cases, these are agents securing only the bookings. They are not managing the property itself. Yes there are also lots of managing agents out there, but in the main they will be reporting back to an owner who has the vested interest in keeping the property up to scratch and paying out necessary monies.
Securing bookings is not rocket science but agents are not, in the main, out to secure the best possible price for the inventory on their books. They just want the properties filled, even if that price doesn't provide the necessary profit the owner needs. I have my own experience of that as do many others on here.
You appear to have made your mind up that it's a sensible solution regardless of what are often very wise words here from home owners, who have no vested interest in your business and nothing to gain or lose by the advice given.
After six years in the business and having read hundreds of stories on here from very successful owners, nothing on earth would induce me to go down the road you're suggesting. My children will inherit my properties, but unless they wish to run the business themselves, I would 100% not advise them to have agents control everything with them being completely hands off.
I wish you good luck if you do go down this route but of course you won't be around to report back if it was a success or not!
Securing bookings is not rocket science but agents are not, in the main, out to secure the best possible price for the inventory on their books. They just want the properties filled, even if that price doesn't provide the necessary profit the owner needs. I have my own experience of that as do many others on here.
You appear to have made your mind up that it's a sensible solution regardless of what are often very wise words here from home owners, who have no vested interest in your business and nothing to gain or lose by the advice given.
After six years in the business and having read hundreds of stories on here from very successful owners, nothing on earth would induce me to go down the road you're suggesting. My children will inherit my properties, but unless they wish to run the business themselves, I would 100% not advise them to have agents control everything with them being completely hands off.
I wish you good luck if you do go down this route but of course you won't be around to report back if it was a success or not!
I'm not quite sure why you want to do this.
If your aim is to produce the best investment for your children, then you have absolutely no certainty that your property investment is going to do this. Things can change substantially - there could for example be huge taxes on property and are you then going to want to tie your trustees into a poor investment that loses money?
If you want to ensure your children get the best investment, then ultimately that will depend on your choice of trustees and their investment choices.
If your aim is to produce the best investment for your children, then you have absolutely no certainty that your property investment is going to do this. Things can change substantially - there could for example be huge taxes on property and are you then going to want to tie your trustees into a poor investment that loses money?
If you want to ensure your children get the best investment, then ultimately that will depend on your choice of trustees and their investment choices.