Turn the family holiday into a family fortune
PUBLISHED: 11:51 05 May 2015 | UPDATED: 11:51 05 May 2015
Should you invest in a holiday home? George Bradley, of Suffolk Secrets says the time is right
New pension changes, a boom in holiday bookings and record yields are creating ‘the best conditions for investing in the holiday property market for years’, according to George Bradley, of Suffolk Secrets
“In the 19 years that Suffolk Secrets has been in operation, there’s never been a better time to invest in the county’s holiday lettings market,” says George Bradley, general manager of holiday lettings company Suffolk Secrets.
According to George, the average annual yields of holiday homes are just over 10% – and more than 20% for owners of the most appealing and best located properties.
And there’s no doubting the demand. Forty thousand people will holiday with Suffolk Secrets in 2015, he says, and his firm is in the job of providing investors with the market support and peace of mind that their property will be well managed and looked after.
When it comes to a ‘typical investor’, George identifies two main types – families who want a second home for holidays and additional income when they’re not using it, and mature retired or nearing retirement couples, who want to supplement their pension pot.
Suffolk has some of the warmest and driest weather in the country, an unspoilt coastline with Blue Flag beaches, and a rural interior rich in history, but it’s the county’s proximity to the capital that can be of greatest appeal.
“Suffolk is just an hour and a half’s drive from the centre of London making it a short break hotspot for those looking to escape the capital at weekends,” comments George.
Where to buy in Suffolk?
The coastal towns of Southwold and Aldeburgh never go out of fashion, says George. Elsewhere, Woodbridge, the wool towns of Long Melford and Lavenham and Bury St Edmunds are popular, and those investing in the Suffolk countryside can also reap great returns and capital growth in the longer term.
“The golden rule is,” says George, “if you want to keep coming back to a property because of its proximity to country walks, bike rides, entertainment, restaurants and pubs, then potential customers will too.”
Who are your tenants?
If you want to attract the older market, or families with young children, forget wonky floors or steep stairs. Look for easy access, secure outside areas and eliminate potential hazards. Don’t discount properties that aren’t ‘quintessentially Suffolk’. As long as the interior is up to standard bookings will come.
What should you look for?
The same rules that apply for first homes – structurally sound, and well-maintained brick, wood or stonework. You don’t want to eat into your lettings income with maintenance issues in peak season.
“Holidaymakers choose a self-catering holiday on the property’s attributes, facilities and location. Kerb appeal isn’t as an important a factor as it would be when buying your own home, but creating stylish interiors that aren’t divisive – a neutral decorating palette for example – is,” advises George.
Keep it simple – traditional layout, two bathrooms for properties sleeping more than four people, a well-fitted kitchen and furnishings that maximise space. Floors should be hard wearing and easy to clean – think tiles and wooden floors rather than carpets in rooms that get most traffic.
Parking is also key, particularly in popular tourist spots. Woodburning stoves and open fires are appealing in the winter season. Wi-fi is important too.
Access and location
A tucked away location might appeal to those wanting a romantic retreat, but good road and rail connections will broaden its appeal.
Other things to consider
It’s tempting to get carried away with the romance of owning a holiday property, but consider your ‘worst case scenario’ and do the sums. Empty weeks, council tax, maintenance and home improvements can all eat into your profits. Seek advice from a reputable lettings agency, perhaps a local estate agent with comprehensive market knowledge, before taking the plunge. Holiday home investors can benefit from certain tax efficiencies, so discuss a potential investment with your tax adviser.
Finding the right agency
Unless you are a whizz at marketing, with lots of contacts, hiring a holiday lettings agency is a must. “A good agency gives you access to trade prices on property improvements, decorative advice, linen and more,” says George, “as well as continuing professional advice.”
Look for an agency with an expansive customer database, a proven track record in achieving good occupancy, ideally one with a track record in dealing with the ups and downs of the holiday market.