How do you get your kicks in lockdown? My rebellious younger self wouldn't recognise me.
There has been a lot of talk about short stay accommodation as a property strategy. Stop right there. The reason that we are landlords varies but at its core is the desire to work less hard and use capital to make money. Most of the PDPLA members that I know have a second string to their bow, they may have a background in building, have retired from corporate or public sector employment or have simply fallen into property as market conditions became favourable. I gave up my career as a teacher to make my way in property but rapidly found my time consumed with a new passion, hospitality.
I really do enjoy creating a good experience for my guests, whether that be well presented places, the little touches that make it memorable, or simply a cup of tea after a long journey. I would hazard a guess that if you don't like these things you should strike 'short stays' from your portfolio ambitions. It is a game where attention to detail matters.
As a landlord, I would frequently spend months (and, on a particularly busy year, a whole year) without visiting my properties. I still have tenants who have been with me for 10 years and it goes without a hitch. A laid back approach has come back to haunt me as, over the last 3 years, I have undertaken a series of renovations, correcting my lack of maintenance over the years and creating some lovely spaces. The type of deep dive renovations that include sound proofing, rewiring, plumbing, artex removal or covering, kitchens, bathrooms and then posh blinds, full furnishing and, at last, places to be truly proud of, ready for guests to enjoy. My new found love of attention to detail has come into play at every stage and, at 51 years old, I hope to never go to these depths again on each property. I got away with 'letting it ride' for many years but I don't want to be stuck at 70 with no energy and a bunch of rubbish property. As a landlord, I never felt that there was 'enough' money in the pot to let rip on quality renovations so I made do with what was in budget. I built my own kitchens, patched things up and made do.
The holiday lets should cover the renovation cost in 3-5 years, with almost all deductible as a 'cost of business'. For me, it provides a good solution that also keeps me out of trouble.
Having trading income, as well as rental, creates other advantages. Another neglected area of my life is pension provision (Nah, hope I die before I get old and all that…) Branching into holiday let trading income enables pension contributions to be made before both corporation and personal tax, if anything brings a smile to my face, it's saving tax. One of the lockdown tasks for me has been exploring this area and putting the necessary steps in place to make it all happen. We are now rockin' and rollin' with Ltd. Companies, payroll, a SIPP and quickbooks to help keep it organised. My 25-year-old self wouldn't know me!
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