buying a holiday chalet to let

[Broughtonblue]

So as the title suggests, Mrs BB and I have decided to buy a chalet on a holiday park to rent out. ok, with holidays banned at the minute it might seem a strange time to do this, but our thinking is with people wary of getting on planes this summer then 'staycations' may become more popular. We looked at both sides of the coin as to whether this is the right time, the price of buying a chalet may decrease in time as owners might need to release some equity as their income from lack of rental has been severely hit, or they might increase as some people might look on it as an investment opportunity for the reasons I have mentioned. but either way our money isnt earning anything stuck in the bank at the minute.
Does anyone on here own and rent out a chalet, caravan etc? looking for any advice as never done this before, whether legal pitfalls to watch out for or general maintenance, advertising the chalet, anything really that is connected to this.
Obviously got to set up a company to keep the taxman happy as well, again this is new to us so any pointers in this direction would also be very welcome.

 

[biggs682]

We have looked at doing similar with a static caravan over the years and each time we have decided no due to the depreciation and then the worry about how much will people care about it when they are staying in it .
It's a great idea but you will have to be prepared to see it almost abused more than cared for by the guests unfortunately.

 

[Bazzer]

......
Obviously got to set up a company to keep the taxman happy as well, again this is new to us so any pointers in this direction would also be very welcome.

Err, why obviously? There is nothing in your original question which suggests this is necessary.
As a generality, HMRC is happy when when people pay the correct tax at the correct time. Whether this be this be individual Self Assessment or Corporation Tax.

 

[PaulSB]

My first thought was why chose a chalet on a holiday park? Frankly it sounds like my idea of hell. As a potential customer these are two words which immediately turn me off. My wife and I are young and in our 60s. We travel a lot, home and abroad, as do many of our friends. None of us would want to be on a holiday park. We are part of a market which is as important, possibly more important, than family school holidays etc.

I am serious with this thought. You need to consider your market carefully in terms of location and type. Location would relate to both the area of the country which needs to offer reasons to visit and the locality, holiday park etc.

Standards need to be high, fully self-contained and maintained at a high level. We're often attracted by small, quirky accommodation cabins, yurts etc. in quiet, pleasant surroundings. Ideally no children, easy out of main season. A good pub, particularly for food, within walking distance is a strong selling point.

It's also worth keeping in mind people in our situation expect good value for money. This doesn't mean cheap but realistic for what's on offer and the time of year. I'm currently looking for a few days away in early May. Many places are writing themselves out of the picture with the ridiculously high price being offered.

 

[Broughtonblue]

Err, why obviously? There is nothing in your original question which suggests this is necessary.
As a generality, HMRC is happy when when people pay the correct tax at the correct time. Whether this be this be individual Self Assessment or Corporation Tax.

Well that shows my naivety as i thought as its a new business i would have to register it somewhere?

 

[Broughtonblue]

My first thought was why chose a chalet on a holiday park? Frankly it sounds like my idea of hell. As a potential customer these are two words which immediately turn me off. My wife and I are young and in our 60s. We travel a lot, home and abroad, as do many of our friends. None of us would want to be on a holiday park. We are part of a market which is as important, possibly more important, than family school holidays etc.

I am serious with this thought. You need to consider your market carefully in terms of location and type. Location would relate to both the area of the country which needs to offer reasons to visit and the locality, holiday park etc.

Standards need to be high, fully self-contained and maintained at a high level. We're often attracted by small, quirky accommodation cabins, yurts etc. in quiet, pleasant surroundings. Ideally no children, easy out of main season. A good pub, particularly for food, within walking distance is a strong selling point.

It's also worth keeping in mind people in our situation expect good value for money. This doesn't mean cheap but realistic for what's on offer and the time of year. I'm currently looking for a few days away in early May. Many places are writing themselves out of the picture with the ridiculously high price being offered.

Its not a holiday park as such, no clubhouse, shop etc, just a number of chalets, some with permanent residents others as holiday lets. Its got its own private entrance to the most beautiful beaches Norfolk have to offer, with a pub and small convenience store within easy walking distance.

 

[Bazzer]

Well that shows my naivety as i thought as its a new business i would have to register it somewhere?

So far as taxation is concerned, provided you tell HMRC at the correct time and pay the correct amount of tax, they will not care less.
Assuming you do not go down the corporate route, your Self Assessment return is quite capable of declaring income and expenditure from holiday lettings. So, if you do not already submit Self Assessment returns, you should make sure you do so.

 

[Broughtonblue]

@PaulSB this is the place

 

[cisamcgu]

Who owns the land ? What happens when you want to sell up ? Do you have to keep it in good order. What happens in winter when no one wants to rent it ? There are literally hundreds of questions you need to ask yourself and others - this is not a buy and forget money making exercise and you might end up with a chalet that no one wants to rent but you are unable to sell ...

 

[Darius_Jedburgh]

What happens in winter when no one wants to rent it

Don't risk short term winter, or heaven forbid DSS, tenants. They will wreck the place. (Speaking as a one time manager of such a venture for an absentee landlord.)
Some tenants are excellent. Others will cause you no end of grief. Unfortunately there is no way to tell in advance what you are going to get.

Letting property is not a licence to print money.

 

[Beebo]

Do you live close by? Who will maintain it and clean it? What happened when you get a call to say the toilet seat has broken at 11pm on Friday night?

 

[Dave7]

Interesting.
We had a static van and could not bring ourselves to let it out. Close family used it foc but the thought of strangers sleeping in OUR bed and possibly mistreating the place.......no, just could not do it.
Plenty of people seem to do it successfully though.
AND as you say, I think staycation will go through the roof for the next few years at least.
If you do it I wish you the best.

 

[cisamcgu]

Have a look at this , it is a sobering read.

 

[Flick of the Elbow]

My wife and I have looked into this too. The conclusion we drew was that it was a lot of hassle for not much return. For us it was far better to have the money invested in managed funds.

 

[sheddy]

As probably previously mentioned, may have to sell back to site owners who control prices.
Site fees, permissions, etc