Character Cottages

Considering Buying a Holiday Home?

A well-managed holiday home can provide a low risk return on investment and provide you with a beautiful country retreat

We believe that buying a holiday cottage can be a financially rewarding and interesting investment. If you are considering making such an investment, brief answers to some of the most important questions you will probably be asking are provided below. For a more detailed understanding of how Character Cottages can help you every step of the way, please do not hesitate to contact us.

Is a holiday home a good investment?

Speaking from our personal experience, the answer to this question is "YES". As with any investment decision, there are a number of pros and cons to consider:

Pros

  • Income generation: A well-managed holiday home should generate good levels of annual income for the owner. We can advise you on the levels of income that you could expect to achieve using Character Cottages as your agent;
  • Capital gains: UK residential property has consistently been an excellent long term investment opportunity. We also believe that holiday cottages with an abundance of character are more resilient to market downturns, as they have a scarcity value that does not exist with modern "lookalike" houses (eg. it is impossible to build a 250 year old, grade II listed property, so the supply of these properties will always be limited);
  • Tax considerations: Whilst we do not believe that tax should be a key driver in an investment decision, UK holiday home letting currently has a number of tax benefits, including being able to offset the costs of financing the property against your rental income;
  • An asset you can use and enjoy: Owning a holiday home gives, you, your friends and your family the opportunity to use the property at times that you choose, as well as generating income from your guests;
  • An interesting investment: Owning a holiday home in a beautiful location is likely to be a more interesting investment than other options available for making a return on your money.

Cons

  • Hard work: Managing a holiday home is much harder work than, for example, investing in a "buy-to-let" or buying stocks and shares;
  • Taking feedback personally: Not every house is perfect for every guest and no-one likes negative feedback, even if it is well intentioned. At Character Cottages, we take Customer Service very seriously and always try to interact with guests prior to them booking, to match them to the right property and to answer any questions they may have. We also actively seek guest feedback after their holiday and act on suggestions that can improve the overall guest experience.

What are the risks of buying a holiday home?

The risks associated with buying a holiday home are generally similar to those associated with buying any other home:

  • Meeting finance payments: as with any property, you should be comfortable that you are able to meet the costs of any finance payments on the property. We can advise you on the profit before financing costs that you can expect to generate from your holiday home, however, you should ensure that a reduction in profit or an increase in interest rates will not cause you to miss any payments;
  • Falling property prices: UK residential property has consistently been an excellent long term investment opportunity. We also believe that holiday cottages with an abundance of character are more resilient to market downturns, as they have a scarcity value that does not exist with modern "lookalike" houses (eg. it is impossible to build a 250 year old, grade II listed property, so the supply of these properties will always be limited);
  • Not being able to let out the property: Whilst unlikely, there are a number of unforeseen circumstances that may suddenly prevent you from letting out your holiday home, including damage to the property (eg. flooding from a burst pipe), restricted access to an area (eg. due to a foot and mouth outbreak), or illness (eg. preventing your housekeeper looking after the house). We can provide advice on suitable processes and insurance policies to mitigate these risks.

What do I need to think about when buying a holiday home?

There are obviously many things to consider when buying a holiday home, however, from the perspective of making a good investment, there are a few key things to think about:

  • Price: This is the single most important factor to consider from the perspective of whether your property will make a good return on your investment. The price of the property will almost certainly be dictated by the general residential property market, however, some properties will be able to generate a higher return than others, as a holiday let, for the same purchase price;
  • Size: How many bedrooms are there, how many bathrooms, is there enough living space for the number of bedrooms, can the kitchen cater for the number of bedrooms, is there a garden?
  • Location: What facilities is the property near (eg. pubs, restaurants, shops, children's playground, tourist attractions, etc.), is the property away from busy roads and noisy or industrial premises?
  • Character: Does the property have character features, such as exposed beams, inglenook fireplaces, Agas, etc?
  • Finance: How are you funding the purchase of the property? If you are taking out a mortgage, would you be better off raising funds against your main house, rather than against the holiday home?

There is no absolute right or a wrong answer as to what makes a perfect holiday home, as different properties in different locations will appeal to different people, however, there are a lot of things to think about in order to maximise your investment returns. We have lots of experience of the holiday home market and can help ensure that the decisions you make are the right ones for you.

How do I go about letting my holiday home?

At Character Cottages, we specialise in letting luxury holiday homes, with the objective of maximising each owner's profit. Further details on how we can help you are provided in the Letting your cottage section, or please contact us using the form below, calling us on +44 (0) 20 8935 5375 or emailing us at lThis email address is being protected from spambots. You need JavaScript enabled to view it. now for an immediate assessment of your holiday home's potential.

Want to tell us about your holiday home?

Please note that due to high demand, we are currently only accepting high quality, contemporary and characterful properties that sleep 5 or more guests.

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    Character Cottages: Your Cotswold Holiday Let Experts