It’s no secret that the UK is facing a cost-of-living crisis. With the price of basics like food, fuel, and housing increasing, many of us are looking for ways we can earn a bit of extra cash on the side of our day jobs.
In fact, according to recent statistics, around 46% of Brits have at least one side hustle. But as well as having a side hustle, many of us are looking to get into more lucrative businesses – like real estate or hospitality, for example.
One of the side hustles that’s increasing in popularity is owning holiday lets. Driven by the popularity of Airbnb and the rise in staycations, having a holiday home can provide some much-needed income in times of hardship.
If you’re wondering whether investing in a holiday home is right for you, read on.
Reasons to invest in a holiday home
- There’s an increased demand
Driven by Covid-19, there has been a rise in the demand for UK staycation holiday homes. Although many holidaymakers do enjoy the luxury of a hotel, there’s a growing number of people that want self-catering accommodation in a bid to save some pennies on their summer (or winter!) break.
- They can be more lucrative
Short-term holiday lets tend to be more lucrative than long-term rentals. The reason is simple: people are prepared to pay over the odds for a memorable holiday.
Unlike long-term rentals where people want a good deal on their monthly rent, people are more likely to splash out on a luxurious holiday let. Especially if it has a hot tub, allows pets, and has a speedy Wi-Fi connection.
Although, it’s worth bearing in mind that they’re only more lucrative if you have a regular stream of guest bookings.
- You can get access to tax advantages
If you can afford to rent your property out as a furnished holiday let, you can unlock tax advantages. This is because a holiday let is seen as a business rather than an investment.
This means you can often offset various costs, such as council tax bills against your revenue.
Things to consider
Although there are many benefits to owning a holiday rental, it’s not straightforward. For example, holiday rentals are subject to ongoing costs. Whether that’s general property maintenance, damages from guests, or something else, holiday rentals aren’t free to run.
You’ll likely need to factor in things like holiday home insurance, utilities and subscription fees, guest changeover and accounting costs, not to mention the fact that you’re liable for the mortgage whether you have guests staying or not.
Consider offering deals or putting on events during quieter months to help keep a steady flow of guests.
Is it right for me?
If you’re looking to increase your income and are willing to take on a certain degree of risk financially, a holiday let is a very good investment. But whether it’s right for you will depend on your financial situation, amount of spare time, and your willingness to take on some additional hard work.
But if you think you’ve got what it takes, it can be a very lucrative, rewarding endeavour.