Are you considering turning your residential let into a holiday apartment? It might be easy than you think. We spoke with our CEO, Karen Blair, about the potential benefits of converting your apartment and how to get started.
Keep reading to learn more:
The main difference between a residential and holiday apartment is letting agreements and cash flow. With a residential let, you typically rent it for long periods of time, say a year, to one tenant and collect rent at the end of each month. A holiday apartment is almost the exact opposite as you rent your apartment to multiple people throughout the year, often for only short periods like a weekend or week.
As the revenue stream is different, you’ll need to file your taxes differently. So, the first step towards turning your residential apartment into a holiday flat is to register as a business with HMRC. You’ll also have to change how you pay council tax on the property as you’ll need to pay business rates.
There are many fantastic reasons to turn your residential let into a holiday apartment. Some reasons you might consider making the transition include:
You’ll generally earn a higher yearly income
You can write off the cost of setting up, furniture, etc. against your end-of-year tax bill
Mortgage payments count as expenses are deductible from your end-of-year tax bill
Less hassle from tenants
One of the biggest appeals of owning a holiday apartment is the fact that holiday apartments generally make a higher net profit than residential lets; especially in tourist hotspots like Edinburgh.
Since travellers are renting your apartment on a nightly, rather than long-term, basis, you can charge more. For example, a one bedroom holiday apartment in Edinburgh Old Town can typically expect to earn £90-95 per night, which in areas with high occupancy rates results in a yearly income of £20,000-£30,000!
Schedule a free consultation with Edinburgh Flats. We’ll come to your property to assess it’s potential earning power. We need to think about the area your based (i.e. whether it’s easy to walk or actually in the city centre) and any home improvements or decor. We’ll then suggest a nightly price and help you set a minimum.
To have a holiday apartment and host travellers, you need to have safety certificates, gas, portable appliance, Legionnaires risk assessment, and electrical certificates. We can help you arrange these checks, or you can do this step independently.
You’ll also need to make sure guests are safe, so must carry out some fire safety work. Depending on what you already have in place, you might also need to get hardwired interlinked smoke detectors, heat sensors in the kitchen, and CO2 alarm if you have gas in the apartment.
We’ll also arrange for a professional photographer to come and take some photos of your apartment. Professional photos really help sell an apartment and will increase your chances of getting bookings.
Once you’re set-up, we’ll get you listed on our website as well as on popular booking platforms like Airbnb and Booking.com. We’ll manage any guest enquiries, take care of payments and greet guests when they arrive. You won’t need to interact or arrange anything as we’ll take care of your holiday apartment like it was our own.
Contact us today to find out more about our property management services. We look forward to working with you.
Written by Edinburgh Flats
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