With a real surge in the numbers of people renting out their properties (be they homes, holiday lets or BTL properties), you can see the temptation for some to jump on the wagon to make extra money from this particular strategy. Especially in light of the huge growth in interest from sites such as Airbnb and other online portals, which make doing business this way rather easy.
The words 'easy' and 'property' rarely go together in my book, so I am always rather wary of those touting the latest get rich quick scheme.
For a start, many people who hear about this type of idea, but do not research it fully, may find themselves falling foul of a lengthy list of regulation and legislation which they are not even aware of, let alone adhering to.
Worryingly, and after having done further research on the matter, I discovered that there are also a number of properties available for more than 90 days on these types of sites, which to me sounds like they are heading more towards proper tenancies than holiday lets, and this could cause a massive headache for all parties concerned.
Of course, and often unfortunately, this type of realisation may not come to light until something goes wrong, by which time it can be so far down the line that it would be like trying to reverse the Titanic!
Of course, and often unfortunately, this type of realisation may not come to light until something goes wrong, by which time it can be so far down the line that it would be like trying to reverse the Titanic!
The main implications for anyone considering this way of generating revenue are as follows:
- Check the terms and conditions of any mortgage you have on a property you intend to let this way - it is very rare to be able to obtain finance for this type of scenario (even on holiday lets)
- Insurance on the property - you would have to obtain specialist insurance for this type of let
- If your property is in London, you may need to gain planning permission to let your property for less than 90 days
- If your property is leasehold, you would have to gain the freeholder's consent
The points above are likely to stop most people in their tracks. Not to mention the fact that the...
- Management of the property will be much more time-intensive then traditional BTL property
- Supply/demand ratio - researching this can be tricky, mainly only works in places which are not seasonal
- Whole process could prove to be much more hassle than it's worth!
Essentially, if you do not cover off the above-mentioned elements (and perhaps even more that I am not aware of...), then you could find yourself in a tricky position legally.
For me, I will be sticking with my usual, more traditional methods of generating revenue from my portfolio in the form of BTL and HMO rentals. Being able to sleep at night is one of the most important aspects of being in business as a landlord. Why complicate matters; this business has more than its fair share of that already!
Hazel
Hazel de Kloe
Property Investor | Property Mentor | Speaker | Author
The contents of this article are for educational purposes only and we make no recommendation of any particular property purchase. The price of property can decrease as well as increase and you make any investments in property at your own risk.
© Why Property Works 2016 | www.whypropertyworks.co.uk
