Holiday Let

[D14]

We've got an old brick barn in the yard but its not central so offset to the edge and I am wondering about converting it to a holiday let. Only problem is its got good frontage with nothing obscuring views and theres scope for a nice garden and ample parking but the rear of the shed backs onto the yard with zero scope for any rear garden. I am not even sure I would want any windows in the rear to be honest as it would be looking at industrial units.
The shed is two floors and a total of 3000 sqft. Its long and narrow (one room wide basically) so would you convert into one unit or go for two smaller ones?
I have done no investigation regarding planning or anything like that yet so this is all just an idea at this stage. Theres elec and water already in the shed and we have biomass heating through a wall that can be tapped into as well as an existing site sewage system that can be piped into easily.
I know the rental per week is dependant on facilities, location and size etc but what's a rough idea please for say a 4 bedroom property or 2 x 2 bedrooms? This would be fully funded by a bank loan so I would need a plan to put forward to them. I don't think we would be wanting to advertise it to big groups and would prefer families I think.

 

[Zippy768]

We had accommodation that would bed up to 8 people. Would command good money in the height of summer and be quite popular over Christmas.
But difficult size, obviously not that popular as was too big for most groups, but, not much competition if there was a group that big.
Do Not underestimate the weekly work that goes with it. Saturday change overs were a tie, garden up keep, people late leaving, having to greet people. People would happily ramp up the heating and leave windows open. Some people left it tidy, others, a fudging mess.
Pets and countryside might be messy.

We now rent it out. However if we could had foreseen the current situation, it would be VERY popular now.
Now would be a great time to do it

 

[D14]

We had accommodation that would bed up to 8 people. Would command good money in the height of summer and be quite popular over Christmas.
But difficult size, obviously not that popular as was too big for most groups, but, not much competition if there was a group that big.
Do Not underestimate the weekly work that goes with it. Saturday change overs were a tie, garden up keep, people late leaving, having to greet people. People would happily ramp up the heating and leave windows open. Some people left it tidy, others, a fudging mess.
Pets and countryside might be messy.

We now rent it out. However if we could had foreseen the current situation, it would be VERY now.
Now would be a great time to do it

I don't want to rent it out on a longer term agreement because I want the ability to turn it on and off to suit us more than anything. For example I wouldn't do christmas or new year because I don't want the hassle basically so don't want any full time neighbours in at those times either.
It's a redundant building and sad to just leave it doing nothing. I thought about office space but I think that market has gone judging by the amount advertised to let.

I'm not to fussed about the work involved such as cleaning and change over etc as I've somebody looking to do this for me and as said I would be picky about when it let and who to. I should say I am not looking for a quick return on the investment and its more about doing something with the shed so it doesn't fall into further disrepair. Long term it'll add value if its done up and it will secure its future. I was thinking its going to cost about £150,000-£200,000 to do up and if I can earn that back over 25 years I would be happy as it would easily be worth £500,000 to sell should we split the yard up and sell or its another accommodation for one of my children long term. How easy is it to earn say £8,000-£10,000/year from a holiday home?

 

[SilliamWhale]

Rough figures:

It will cost you at least £150k to do up. Farmers can find a way of saving here and there but costs are going up a lot now

Plan on it bringing in 20-25k per annum net.

Its not a money spinner but it would be a good pension and a top up income. You should be able to get £8-10k in your pocket after loan and costs etc.

Will you definitely be able to get a loan for it in advance as a lot of banks would not want to lend for 25 years for a building not built yet.

 

[D14]

Rough figures:

It will cost you at least £150k to do up. Farmers can find a way of saving here and there but costs are going up a lot now

Plan on it bringing in 20-25k per annum net.

Its not a money spinner but it would be a good pension and a top up income. You should be able to get £8-10k in your pocket after loan and costs etc.

Will you definitely be able to get a loan for it in advance as a lot of banks would not want to lend for 25 years for a building not built yet.

The loan will go against the main business so it wouldn't be an actual loan for 25 years. It'll be much shorter but I'd just like to know we could cover in that timescale in terms of getting the money back.

For £20-£25k per annum income what kind of occupancy are you running at? The more I think about it the more I am coming to the conclusion I wouldn't want the rush of a Saturday change over so might just let it Wednesday am to Monday pm leaving all day Tuesdays for the clean down etc. Its less of a rush that way. As said I wouldn't want to be cramming people in as its not a standalone business and is more about adding value long term. I think we would let on on 'our terms' rather than thinking about what the customers want. More of a take it or leave it scenario but obviously not being funny about it.

 

[Poncherello1976]

If you do it as a holiday let they will only, probably, want a small garden/patio that is dog safe. So I would not be too worried about the size of the garden space for a holiday let.
Probably better to have 2x2 bedroom, but put in an interconnecting door if you do need a bigger space.
Income will obviously depend on your location. In a normal year we are running at about 40+ weeks booked for a 2 bed place and nets about £20000 probably a bit more, which makes it worthwhile having it as a holiday let and not a residential let. That is also let through a company that take (more than!) their fair share as well. Hopefully 1 day we will do it ourselves, as we are looking at doing another 1.

 

[StaycationConsultants.com]

From experience and the direction the staycation market is going, I feel there are better ways to spend £150-£200k. With this level of investment and depending on your location you could do something much more profitable, bringing in >£90k on average and you wouldn't need to organise a thing.

The long term plan of saving the structure is definitely worthwhile, and yes it would make a lovely annex for family, but it will be limited in terms of return and clients able to fit the space.

 

[Gourlaw]

The loan will go against the main business so it wouldn't be an actual loan for 25 years. It'll be much shorter but I'd just like to know we could cover in that timescale in terms of getting the money back.

For £20-£25k per annum income what kind of occupancy are you running at? The more I think about it the more I am coming to the conclusion I wouldn't want the rush of a Saturday change over so might just let it Wednesday am to Monday pm leaving all day Tuesdays for the clean down etc. Its less of a rush that way. As said I wouldn't want to be cramming people in as its not a standalone business and is more about adding value long term. I think we would let on on 'our terms' rather than thinking about what the customers want. More of a take it or leave it scenario but obviously not being funny about it.

Remember you will have to charge VAT if it is part of the main farming business (assuming your business is VAT registered.

 

[bobajob]

The loan will go against the main business so it wouldn't be an actual loan for 25 years. It'll be much shorter but I'd just like to know we could cover in that timescale in terms of getting the money back.

For £20-£25k per annum income what kind of occupancy are you running at? The more I think about it the more I am coming to the conclusion I wouldn't want the rush of a Saturday change over so might just let it Wednesday am to Monday pm leaving all day Tuesdays for the clean down etc. Its less of a rush that way. As said I wouldn't want to be cramming people in as its not a standalone business and is more about adding value long term. I think we would let on on 'our terms' rather than thinking about what the customers want. More of a take it or leave it scenario but obviously not being funny about it.

Take it or leave it/ on 'our terms'/ Monday and Wednesday change over dates,
You've not really grasped what it is your trying to do!!! - ie- provide a nice welcoming place that people will want to come to and give you their hard earned cash.
You can't really do holiday let's half hearted and still expect £10000 a year. Its not that easy!
(in our experience)

 

[Still Farming]

I don't want to rent it out on a longer term agreement because I want the ability to turn it on and off to suit us more than anything. For example I wouldn't do christmas or new year because I don't want the hassle basically so don't want any full time neighbours in at those times either.
It's a redundant building and sad to just leave it doing nothing. I thought about office space but I think that market has gone judging by the amount advertised to let.

I'm not to fussed about the work involved such as cleaning and change over etc as I've somebody looking to do this for me and as said I would be picky about when it let and who to. I should say I am not looking for a quick return on the investment and its more about doing something with the shed so it doesn't fall into further disrepair. Long term it'll add value if its done up and it will secure its future. I was thinking its going to cost about £150,000-£200,000 to do up and if I can earn that back over 25 years I would be happy as it would easily be worth £500,000 to sell should we split the yard up and sell or its another accommodation for one of my children long term. How easy is it to earn say £8,000-£10,000/year from a holiday home?

Usually sec.106 aggreements with your planning approval (if you get it) will restrict to client and time there.
If your in England ,I think for can change shed to houses under permitted development so just go for that.
As stated VAT , Agents fees ,Valuation Office and Rates ,water ,electric (they will leave all on as they have paid for it attitude and windows open with heating flat out!)
All hard going with the Public.
Genuine holiday people not to bad but you'll get all the crap after accommodation, working in area , sold their home and inbetween lot , shady walks of life and professions try it on , lot that move in and won't leave or pay (hopefully not).
But just to say it is a funny old crowd out there !
Do you want people around you and your yards and mix with your family also?

 

[SilliamWhale]

From experience and the direction the staycation market is going, I feel there are better ways to spend £150-£200k. With this level of investment and depending on your location you could do something much more profitable, bringing in >£90k on average and you wouldn't need to organise a thing.

The long term plan of saving the structure is definitely worthwhile, and yes it would make a lovely annex for family, but it will be limited in terms of return and clients able to fit the space.

Which is the more profitable idea?

 

[Muddyroads]

We gross around 15k after commission for a 2 bed cottage with Airbnb, around 85% occupancy. 20% then goes in VAT.
We make a cleaning charge so it doesn’t matter if visitors stay a day or a month providing someone can do the cleaning. As said, a small garden which is child and dog proof is generally all that’s needed outside. We have a key box for self check in after 3PM and expect folk to leave by 10. It’s not uncommon for us not to meet our guests at all.
We have a lot of public involvement across the farm but it’s not for everyone. It works for us, but I’d only advise it if it’s something you specifically want to do.

 

[StaycationConsultants.com]

Which is the more profitable idea?

We specialise in supporting landowner to diversify with the best option for their land, often if the location is isolated and under 2 hours from major cities there's a solution to draw in a more affluent crowd. We are launching a brand for landowners to sit under which is going to drive direct business resulting in much lower commissions and higher rates, so we manage the brand, marketing, sales and customer service, the landowner just manages the changeover. Happy to chat, drop me me message

 

[SilliamWhale]

We specialise in supporting landowner to diversify with the best option for their land, often if the location is isolated and under 2 hours from major cities there's a solution to draw in a more affluent crowd. We are launching a brand for landowners to sit under which is going to drive direct business resulting in much lower commissions and higher rates, so we manage the brand, marketing, sales and customer service, the landowner just manages the changeover. Happy to chat, drop me me message

An agent you mean?

 

[Still Farming]

We gross around 15k after commission for a 2 bed cottage with Airbnb, around 85% occupancy. 20% then goes in VAT.
We make a cleaning charge so it doesn’t matter if visitors stay a day or a month providing someone can do the cleaning. As said, a small garden which is child and dog proof is generally all that’s needed outside. We have a key box for self check in after 3PM and expect folk to leave by 10. It’s not uncommon for us not to meet our guests at all.
We have a lot of public involvement across the farm but it’s not for everyone. It works for us, but I’d only advise it if it’s something you specifically want to do.

If your wife's business and not vat registered 20% better off for a start?

 

[StaycationConsultants.com]

An agent you mean?

Dropped you a DM

 

[Puff]

At 3000 sq ft that's definitely 2 properties, with 2 beds +ensuites. I'm doing a barn conversion for myself and its roughly 1200sq ft and its generously big inside over 2 floors with openplan downstairs.
You haven't said where you are as location does matter for what you can charge too.
My self-catering cottage is roughly about 1100sq ft and sleeps 4 in 2 beds with en-suite. Its Wales 5* graded and I think its worthwhile getting something like that recognition as it shows a decency standard. It allows me to charge a good inclusive rate and not to worry about a couple of quid if they whack the heating up or break stuff. I'm with HolidayCottages and have found that occupancy soared taking my t/o from about 10-12k pa to 20k last year (after their fees). I know it was a strange year last year but I lost 10k of bookings during the 1st lockdown that had already been booked and still managed another 10k the times we were allowed to open. Needless to say I'm fully booked until late November this year...
I appeal to walkers and dog owners, so ensure they're well catered for. In that way the type of guests I get are generally very respectful of the property and I rarely have any issues. I get more dogs staying than humans and if I get 3 kids in the year, that's a lot. Again, families with kids have different expectations and imho tend not to be quite so clean. The cottage has it's own small garden and the guests have access to a secure paddock for dog exercising etc.
As previously said, you're offering a service so unless you want to do AirBnB, which I think is much harder work, people expect a Friday or Saturday changeover day. 6 hours in between should be ample to get a home ready for new visitors and grounds work can be completed on other days if necessary (esp if its wet on the day). I have an electronic code lock (saves people going off with keys) that can be controlled remotely and I also sometimes never ever see some guests if I'm away, like I am now.
If you're doing a barn conversion, you should be able to claim the VAT back on materials etc once its signed off. I haven't totted up recently but I expect I will spend about £75k to move in. That includes quite a lot of blockwork, a new (insulated) floor and a new roof that extends the length of the barn (I'm not converting all). I have done a lot of the labour myself too as I was furloughed last year, so probably saved £25k in that at least.

 

[D14]

So had a word with the local planning authority and they said it wouldn't be an issue as long as I was realistic with the conversion. Then spoke to an independent planning agent who said the same so thats all ok. Then had a shock when I spoke to a local architect as she said building materials supply is getting worse so budget on 50% extra presently to do the conversion from what I thought. So I had a basic list drawn up and called a couple of building merchants and as the architect said everything has shot up a lot. For example wooden rafters were £13 but now £25 each. Bag of cement if you can get hold of any is now £10. Local plaster told me the same but he's booked out for 12 months. So I think I am going to leave it at least 12 months and just get the roof sorted which we have materials to do as it'll be one less job to do down the line. We'll get planning submitted and secured in the meantime as its relatively small cost to do this.

 

[Puff]

Prices have gone up for raw materials but most of the cost is in labour. Not gone up 50% though!

 

[robs1]

Sorry not read it all but unless you can do most of the work yourself I would be tempted to convert it into small industrial unit/s , less expensive and less hassle