Spread sheet for planning our first holiday let

If you are planning to buy a rental home, or you're thinking about what to do with one you have just acquired, this is the place for any questions about starting out in the rentals business.
WhitbyWanderer
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Joined: Sun Sep 17, 2017 5:31 pm

Spread sheet for planning our first holiday let

Post by WhitbyWanderer »

Hello Everyone!

This is our first post, so please be kind to us!

We are in the process of trying to find our first Holiday let and was wondering if anyone had a spreadsheet that would help us with the planning of purchase cost and ongoing costs as well as predicted rent etc.

Whenever we sit down to go through things we always seem to come up with something else, so I guessed that someone with a bit more experience than us would probably already have gone through this process.

At the moment we are looking at few different properties and trying to establish which would represent the best commercial value, however we are finding it a bit of a mine field, so we are trying to do the sums.

Any help would be greatly appreciated.
I must have forgotten so much...When I was a teenager I knew everything!
ianh100
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Location: Sherborne Dorset

Post by ianh100 »

I am happy to sanitize some of my spreadsheets and hand them over for this purpose. My initial comment would be that this is very hard as all of these factors change significantly by regions and property.

I would add at least 50% to any costs you think you will see and reduce the number of dates sold by 25%

The key thing is to do local research on similar properties.

From your name here I could assume you are looking at Whitby. If that is true what does that market look like? Will you get lots of short breaks? What are your turnaround costs?

It is possible to make a reasonable income, but I think all here will agree that it is hard work. We really enjoy what we do and the feedback from guests.
zebedee
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Location: yorkshire dales

Post by zebedee »

I would agree with ianh100 with the additional comment that it doesn't take much of a small variable to make the figures add up (or not) very differently.

Every year, at some point, there is always the worry that the market will not come to you or your area.
It takes quite a bit of nerve at times.

When I started out I had a big mortgage to pay and the risks appear higher, because they are higher.
If you own the property outright, there is some cushioning if bookings are not forthcoming when you think (Hope) they should be.

For example, I have long given up on any idea of a January rush for bookings, yet by the end of the year all is ok.

It is harder work than people will think. Don't let that put you off though, as the rewards are worthwhile.
Wishing you every success.
WhitbyWanderer
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Joined: Sun Sep 17, 2017 5:31 pm

Post by WhitbyWanderer »

Thanks Ian and Zebedee,

Really appreciate your comments, its certainly a learning curve and as I said previous every time we sit down to go through costs something else springs to mind!

The area we are looking does have a good occupancy rate and talking to local letting agencies, we shouldn't have too much problems achieving a good return. We just need to make sure that we get the right property at the right price to make it all work. As suggested small variables can add up and make big differences - for better or worse!

We still have quite a lot to calculate, so any help with the spreadsheets would be massively appreciated!

Once again thanks for taking the time to reply - it really does help.

WW
I must have forgotten so much...When I was a teenager I knew everything!
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greenbarn
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Location: The Westmorland Dales, Cumbria

Post by greenbarn »

This is a topic that has cropped up a number of times, and it might be better to approach it from the opposite direction - why not put up a list of the things you’ve already thought of, and people can comment and add based on their own experiences?
WhitbyWanderer
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Post by WhitbyWanderer »

Thanks GreenBarn,

We havent got as far as individual items yet, we have just put a some of money against that at present.

Its more the initial, monthly and annual outgoings, cleanings costs ect and expected incomes that we looking for at the moment.

Plus im hopeless at making my own spreadsheet!! :D
I must have forgotten so much...When I was a teenager I knew everything!
Giraffe
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Location: Cornwall, England

Post by Giraffe »

WW - there is a previous topic on this starting up thread which you might find useful. Look up "new here, want to buy the barn next door", last entry on it is Sept 16 2016. I listed a number of expenses for startup and running costs which you might find useful. However, can't guarantee that they are comprehensive, but you might find them helpful.

Go along with ianh100 - costs are always higher than you estimate, especially maintenance and replacements.

Good luck with your venture. Giraffe
The best things in life are free
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Jo222
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Joined: Thu Dec 28, 2017 2:11 pm
Location: New to this and looking in UK

New here, can't see way to make UK let profit from abroad

Post by Jo222 »

I love this forum and all the helpful people.

I have been analysing the investment potential for buying and managing a UK holiday let from overseas, but cannot see any way to make it profitable. It looks like a labour of love more than anything!

Feel free to use my expense lists if they are helpful to you!
And of course, feel more than free to correct my newbie work!!
[Edit - some of the sums are a bit off now because I've been adding in people's suggestions, but don't want to deal with the formatting!]

Assumptions
  • £350,000 property with a £122,500 35% cash deposit on the mortgage
  • 80%/40% high/low season occupancy (50% overall).
I get a negative net yield anytime I add outsourced marketing and property management fees.
(Oh and I haven't even added in UK revenue taxes!)

I have a Google Sheets link I can add if that's allowed in this forum.

Cash Needed at Purchase
(Not figured into Operations Costs or Net Yield)
3% stamp tax £ 10,500
Mortgage deposit £ 122,500
Mortgage fee £ 2,844
Bank valuation/surveyor £ 450
Solicitor £1000
Land registry fee £ 200
Accountant £ 500
Fire risk assessment £ 200
Private survey £ 500
----PLUS additional costs, if bought unfurnished:
- Furnishings costs £ 5,000
- Carpets and fitting £ 2,000
- Curtains/blinds install £ 1,400
- Setup costs in first 3 months while vacant:
-- Mortgage while vacant £ 3,794
-- Utils, taxes while vacant £ 1,931
TOTAL Cash Outlay £ 152,018

Annual Expenses
Mortgage £ 15,174
Contracted service providers:
- Marketing company @20% of revenue £ 3,536
- Property management* @15% of revenue £ 2,652
- 26 changeover cleanings + laundry at £ 100 £ 2,600
- Wifi maintenance service £ 240
- Gardener £ 240
Repairs & maintenance (2% of value less "*" items; 4% if listed property) £ 6,534
Council taxes £ 2,303
Insurance:
- Holiday let insurance with public liability coverage £ 540
- Life insurance for mortgage £ 500
Annual PAT electrical safety inspections £ 150
Parking fee £ 180
Refuse collection £ 180
Annual chimney sweep,logs* £ 96
Internet/cable TV/phone £ 1,200
Electric / gas/ sewerage £ 1,820
TOTAL Annual Expenses £ 38,396


Income Estimate
13 weeks of high season: £ 1,100 per week
39 weeks of low season: £ 400 per week

Occupancy Estimate
High season occupancy: 80%
Low season occupancy: 40%
Annualized Occupancy Rate: 50%

Monthly Income
High season £ 3,813
Low season £ 693
TOTAL Monthly Income £ 1,473

TOTAL ANNUAL INCOME £ 17,680
TOTAL ANNUAL EXPENSES (£ 38,396)
TOTAL ANNUAL CASH / NET YIELD (£ 20,716)

before UK income taxes
Last edited by Jo222 on Tue Jan 02, 2018 9:51 am, edited 15 times in total.
zebedee
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Location: yorkshire dales

Post by zebedee »

Hello Jo,
The ability to fill properties in low season can be very dependent upon which area you are in. Eg London, yes, a good walking area, yes, but no so for everywhere.
Where is your purchase planned?
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Jo222
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Location: New to this and looking in UK

Trying for London-accessible getaway areas

Post by Jo222 »

Hi zebedee,
To start, I am looking across the southwest and Hampshire, adding southern market towns that offer a reasonable distance from London for weekend romantic getaways. The New Forest and some Dorset areas with views are on today's research list. :) So I set off-season occupancy to low, but not nil. Is 40% too optimistic, do you think?
zebedee
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Joined: Fri Sep 12, 2014 2:57 pm
Location: yorkshire dales

Post by zebedee »

I may be a bit out of touch these days, but in my mind, a romantic getaway involves just two people.

A weekend will be a percentage of your full week rate around 70-80% (most people charge 70-75%). You list £725 as your low season rate and later expect to gain £1257 per month (not sure if this is with all your expenses eg changeover, fuel deducted, I suspect it is).

Either way, it seems rather a lot for a weekend for two, provided I have understood your figures.
Is there a good enough market for you to charge these prices and gain the occupancy you hope for? I am not in your area, so others closer to you need to comment.

Edited to add
(Ps your total annual expenses as stated does not add up to the figure you use.)

You may be offering something of a wow factor, so I don’t mean to put you off.
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Jo222
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Location: New to this and looking in UK

Post by Jo222 »

zebedee wrote:I may be a bit out of touch these days, but in my mind, a romantic getaway involves just two people.
:lol:

Good points, Zebedee. I got some of those numbers from a high-end luxury rental marketing site, where the business model also requires a major upfront investment in furnishings and decoration, not to mention amenities; and where the marketing percentage fee is higher. Changeover and fuel are included for the guest in the prices listed. Their off-season rates are mainly 3- and 4-day weekends, but they really do command those prices(!). I was looking at Oxfordshire and Cotswolds at that point (before I found out they're in high-risk flood zones), where the rates are pretty high.

So yes, it sounds as though I need to adjust revenue downwards. Which sends my little dream of a holiday let even further away ... :cry:
Drax
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Joined: Thu Jul 21, 2016 4:36 pm
Location: Yorkshire Dales

Post by Drax »

Hi Jo,
I have been looking at your expense list and there is one item that I do not quite understand. Fire Officer Fees. What is this?
With regard to parking fees if the house that you buy has a drive-way there would be no parking fee to pay.
Also I would have thought that the Holiday Let Insurance on the house would cover public liabilities, thus do you require Public Use Insurance, which seems very expensive?
I presume you do not live in the UK, if this is so how often would you visit and inspect your property? Personally I would like to make regular inspections to make sure the property was being correctly managed, because you would be relying 'heavily' on your property management company to ensure that everything was running smoothly i.e. maintenance, cleaning etc.
Keep your powder dry.
CarolineJ
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Location: North coast of Scotland
Contact:

Post by CarolineJ »

Not sure what the £5,250 for realtor is? In the UK, the estate agent's fee is paid solely by the person selling the house, the buyer pays them nothing.
Faint heart never won fair holiday let...
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Jo222
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Location: New to this and looking in UK

Thanks for the advice and corrections!

Post by Jo222 »

Drax, zebedee and CarolineJ,

Fire Officer Fees - It's a fire inspection. I must have gotten that advice from an estate agent in a town that requires them! Good to know they're not universal.

Yes I'm afraid I live overseas, so personal inspections are not going to be possible more than once a year.

I'll have to check on whether the Holiday Let Insurance overlaps with Public Use Insurance. Got them from an advice page. I think Public Use is liability and Holiday Let is contents. Does anyone know?

CarolineJ - excellent news! I'll delete the estate agent's fee. I'm now £5,250 closer to better luck.

zebedee - Wow, I missed the mortgage line - sharp eyes!
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