Finance for Furnished Holiday Lets
Property investors looking for Furnished Holiday Let (FHL) opportunities in Bristol can benefit from offsetting mortgage interest costs against revenue as well as reconciling council tax and other bills against income.
To qualify as a FHL for tax purposes, the property must be available for at least 210 days per year and be let commercially to the public for at least 105 days in the year.
Furnished Holiday Let investment advantages
One of the significant advantages of Furnished Holiday Lets (FHL) compared to a buy-to-let properties is that they are not subject to many of the taxes imposed on BTL property investors.
Fished Holiday Lets (FHL) owners are classed as a business rather than a property investment, so they have many tax breaks that buy-to-let landlords cannot enjoy.
Most Furnished Holiday Let (FHL) marketplaces only charge a commission on a pay-per-booking basis. An FHL can be marketed on multiple platforms without incurring subscription fees as an ongoing cost.
FHLs are subject to full mortgage interest tax relief. There is no limit on the mortgage interest amount incurred that you can offset against profits.
For FHL investors on a higher tax rate, their income tax bill may be reduced significantly.
Furnished Holiday Let owners can offset some equipment and furnishing costs against rental income. Expenses such as council tax, utilities, maintenance, cleaning, property management costs and advertising can also be offset.
Furnished Holiday Lets are subject to business rates rather than council tax.
You may benefit from Capital Gains Tax relief when you sell a holiday let. There is also the chance to roll over capital gains if you buy another holiday let. Any gain from the first can be deferred until you sell the second.
What ROI is possible from Furnished holiday Lets?
The pandemic and the forever-evolving quarantine/testing rules have sharply increased demand for UK holiday properties. 2021 bookings surged post-lockdown, and many holiday lets in tourist hot-spots are already booked up for 2022.
Research suggests that the appetite for domestic holidays is stronger than ever and will continue post-pandemic.
The average occupancy level for Furnished Holiday Lets is between 20 and 24 weeks per year. However, high-performing properties in popular locations can achieve over 40 weeks booked.
Many investors are eyeing Furnished Holiday Lets as a potentially lucrative safe haven for their money.
Holiday lets located in beautiful, rural areas or near popular tourist destinations in the UK tend to deliver high rental yields over a year.
At peak season, a Furnished Holiday Let can earn as much in a week as it would in a month from buy-to-let.
Furnished Holiday Let landlords can earn up to 30% more yield than their buy-to-let counterparts. FHLs deliver an 8% return annually (approximately £13,000), while buy-to-let investors aim for a yield of around 6%.
A good guide for profit/revenue with no agency fees and no mortgage is around 50%. With mortgage payments and letting fees deducted, it’s at 30%.
If your short-term holiday let is successful in terms of bookings, this will result in potentially a much higher return than if you let your property long term.
The pandemic has led to an increase in remote working and an emerging trend for ‘workcations’ where guests stay longer. This growing market can mean less changeover and admin expenses for owners.
Potential for capital appreciation in the long term if you buy a run-down property to develop or in an area that becomes popular.
What are the best platforms to advertise Furnished Holiday Lets?
HomeAway is owned by Expedia and is one of the world’s leading holiday rental websites, with over two million properties listed.
HomeAway gives Furnished Holiday Let (FHL) owners in Bristol and the surrounding region access to straightforward technology, easy-to-use tools, tips, toolkits and resources.
Booking.com is the world’s number one accommodation site, with 1.5 million nights booked daily.
There are over 5,6 million holiday homes, apartments and other unique, Furnished Holiday Lets (FHL) to stay across 228 countries.
Apartments, B&B, boats, cabins, campsites, country houses, guest houses, holiday homes, villas and furnished holiday lets (FHL) are all listed
Listing a Furnished Holiday Let (FHL) is 100% free with no long-term contract required.
Booking.com actively promotes property all year round on Google, Bing and Yahoo.
Airbnb is the fastest-growing global guest community website for Furnished Holiday Lets (FHL) in Bristol and the surrounding regions.
There were more than 500 million guest arrivals as of 2019, with one billion guests expected to use the platform by 2028.
Advertising a Furnished Holiday Let (FHL) on Airbnb is free, with no long-term contract required.
Rooms, shared spaces, and entire properties are listed under property types. Rental spaces include RVs, yurts, boats, and tree-houses may also be used as FHLs short-stay accommodation.
The booking commission is only 3%, and funds are transferred directly.
The core values of Airbnb are being independent, local, unique offerings, quality and great hospitality.
Tripadvisor Is The Worlds Largest Holiday Rental Platform
TripAdvisor has over 800,000 holiday rentals in more than 190 countries.
340 million monthly visitors use TripAdvisor to plan and book their trips.
Your FHL listing will appear in TripAdvisor’s “Holiday Rentals/Vacation Rentals” search tab.
Depending on other local accommodations, some listings will also appear
in the ‘Hotels and Places to Stay’ search.
It’s free to publish a listing, and there is no contract.
The commission is circa 3%, deducted from a guest’s payment.