We all dream about what we will do when we get to retire, and if you’re lucky enough to have the option of putting a little extra away to fulfil your dreams, deciding where to invest can be a difficult choice. With interest rates remaining low, investing in property can be an attractive option. If you purchase in the right area a holiday let property can be even more lucrative! Furthermore if you choose the right lender, you‘ll even be able to use the property yourself. Read on to see how we helped Miss Finch go down the holiday let route to bring her dream to life.
Miss Finch is a Finance Director for a medium sized company and her partner Mr Lawrence is a Warehouse Manager. They live in South East England, close to the Eurostar station at Ashford International and know several people who have recently bought properties in the area with a view to letting them out on the holiday market. Both are paying in to pension pots but are searching for an additional future revenue stream so that they can fund the retirement they dream of.
Their plan is to buy a camper van and using their nearby transport links, regularly tour the continent. An income provided by a rental property would be a massive step towards achieving this. They also have family dotted around the country who they are keen to spend some time with. Being able to offer them a place to stay nearby for free will make this much easier and hopefully mean that they see more of their nephews and nieces who are growing up fast.
After keeping an eye on the market for a while, the couple have found a 3 bedroom cottage which they feel has real potential. Property in the area is expensive but the Eurostar guarantees a holiday let market and they’re able to raise a healthy deposit from their own home. Many of the local companies trade in Europe as well as the UK and regularly welcome buyers and clients from the continent to their Kent offices. There is a constant struggle to find decent accommodation for them and Miss Finch is confident that local businesses will be pleased to use her property for their guests. To supplement this, she plans to use Airbnb to fill weekends particularly as it gives her the flexibility to offer as much or as little availability as she chooses with no penalty.
The problem they’ve encountered has been finding a lender who can consider the mix of rental sources which they plan to use to ensure a steady flow of bookings for the property. There is also reticence from some lenders around basing a mortgage application on a property let through Airbnb – despite the fact that the company is well established and has unrivalled exposure online. These factors, along with the desire to be able to use the property for a decent period of time each year have meant that the case has become too complicated for some lenders to consider properly.
Miss Finch has done her homework and has engaged with a broker who specialises in Buy to Let and Holiday Let applications. She’s placed business with the Furness before and after a couple of quick phone calls to her BDM and a speedy first look from an underwriter, a Decision in Principle is on the table within a couple of days. An application is accepted shortly afterwards and Miss Finch is working hard getting her name known with the local corporate accommodation bookers. Mr Lawrence is spending his spare time working his way around the numerous Motor Home dealers which serve the south coast…