buy to let - portfolio lodges

Shared Escapes
buy to let - portfolio lodges
Buy To Let
For many years now Buy To Let has been a profitable way to make your money work
harder for you than sitting in the Bank or invested in an ISA.
Mortgage lending to buy-to-let landlords reached £4.2bn across 33,500 loans in the first quarter of 2013,
according to the Council of Mortgage Lenders and by the end of March it accounted
for 13.4 per cent of total mortgage - CML 2013
“The Daily Telegraph-29/4/14” published some interesting facts on traditional Buy To Let, shown below
Housing
privately
rented (%)
Location
Average
house
price
Average
monthly
rent
Gross
rental
yield (%)
Portsmouth
22.28
£146,709
£795
6.50
Liverpool
21.75
£91,175
£494
6.50
Cambridge
23.91
£185,414
£1,001
6.48
London
33.97
£1,236,605
£2,968
2.88
With purchase prices ever increasing and yields of less than 3%, maybe there’s a better way..
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Holiday Homes As A Buy To Let
“One in four holidaymakers are taking more “staycations” this year than last, and a third will be spending
this year’s main holiday on home soil, the motoring and leisure association’s research found.
The average family will spend just over £980 on a summer holiday in the UK, with Scotland, the Lake District, Devon
Cornwall, Rural England and Snowdonia likely to be the biggest beneficiaries” - The Guardian 14/8/14
The UK holiday market is growing year on year at a rapid pace with Self Catering and Short Breaks
proving to the most popular “staycations”.
Demand for high quality accommodation to fulfil this demand has never been so high, the Lodge
manufacturing industry are stepping up to this challenge, with high end luxury lodges
non more so than Pathfinder Homes, our preferred Lodge Supplier.
“Over the past 60 years Pathfinder has become a leading, luxury lodge and residential park home manufacturer in the UK.
Established in 1958, Pathfinder has led a transformation of homes from simple caravan styles
which were popular in the 1960’s to the contemporary luxury lodges that Pathfinder builds today” Pathfinder 2014
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Holiday Homes As A Buy To Let
Buying A Holiday To Let - How It Makes Sense
Purchasing a home to let to holiday guests make lots of financial and practical sense, here is a quick bullet list
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Lower Purchase Price
Higher Returns
Stress Free Management
Low Maintenance Costs
Choice Of Location
No Tenants To Find
No Deposits To Handle
No Annual Certificates To Organise
Tax Deductible Expenses**
24/7 On Site Care
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All Health & Safety Dealt With
Rentals Secured Via Hoseasons®
No Midnight Call Outs
Minimum 8 Weeks Free Holidays A Year
Flexible Owner Usage
Location Change
Use As Company Incentive
Gift To Family & Friends
Tax Efficient**
Free Membership To Dial An Exchange®
GUARANTEED RENTAL INCOME FOR A MINIMUM OF 3 YEARS
** See Section Tax & Holiday Lets
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Holiday Homes As A Buy To Let
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For 2015 Shared Escapes are offering 9 Portfolio Lodges at various Parks across the UK.
So how does it work ?
Step 1
Choose A Portfolio
Choose A Lodge Type
Choose A Location
Pay 10% Deposit
Step 2
Pick Your Plot
Personalise Your Lodge
Account Setup
Pay Balance As Agreed
Step 3
Reserve Your Use
Place In Rental System
Bookings Start
Receive Rental Income
Because of build limitations we offer a very exclusive amount of Portfolio opportunities every year.
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Portfolio Options 2015
page ten
Portfolio Cost
Portfolio Cost
Portfolio Cost
£99,000
£135,000
£180,000
Annual Return
Annual Return
Annual Return
£9,000
£12,000
£15,000
Return Frequency
Return Frequency
Return Frequency
Monthly
Monthly
Monthly
Lodge
Lodge
Lodge
Meadow View 32x12
Tuscany 40x20
Keepers 45x22
Location
Location
Location
Scotland &
Northumberland
Northumberland,
Devon & Scotland
Scotland, Yorkshire or
Northumberland
Guaranteed Amount
Guaranteed Amount
Guaranteed Amount
£27,000
£36,000
£45,000
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Tax Benefits
As your Rental guests are entitled to use all of the furniture it is deemed to be ‘Furnished’.
To qualify the letting of the lodge to be considered a commercial venture it must be let with a view to making a profit,
the use of the lodge or rental by friends or relatives at a zero or even nominal rent is not recognised as being of commercial use
There are further qualifying criteria:
The lodge must be made available for commercial use by renting to the public for at least 210 days
The lodge must be commercially let to the members of the public for at least 50% of that time i.e. 105 days
To also qualify it is not permitted to rent to the same person for longer than 31 continuous days as this is
termed a ‘period of longer term occupation and is not letting.
You can access tax advantages which are only available to trading businesses where a property rental business meets specific qualifying conditions
These qualifying businesses are referred to as ‘Furnished Holiday Lettings and as such you will if you rent your lodge this way qualify for these tax advantages.
You will be entitled to capital allowances on furniture and white goods in your lodge.
This potentially gives 100% tax relief in the year of expenditure or a writing down allowance each year.
The purchase of your lodge could be looked on favourably for (CGT ) Capital Gains Tax and could give business CGT relief.
There is also what is known as Entrepreneurs’ Relief which could also result in a reduced rate of CGT, this could be as little as
10% payable on any capital gains arising from the disposal of the lodge.
If you choose to gift your lodge then the Capital Gain arising can be frozen. It will however become liable on any subsequent disposal of the lodge.
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Capital Allowances
HMRC criteria show that under Capital Allowances tax relief legislation lodge homes that meet the correct rental conditions are
Furnished Holiday Lets and are therefore commercial property. Therefore UK tax payers could find there are tax relief opportunities.
It is important to identify plant and equipment within the lodge as this could qualify for Capital allow-ance tax relief.
This could then be offset against your tax bill.
Commercial property contains plant and equipment that qualifies for capital allowance tax relief. Therefore it is important to know about any unidentified
qualifying plant within your property. Why? Because it will help save money on your tax bill.
Also normal wear and tear on this qualifying plant could be a Capital allowance for a deduction against tax
For definition of tax on plant and machinery in commercial property is quite often overlooked but it can include such things as the heating system, electrical
installation, alarm system and sanitary pieces, however it is advisable to check with HMRC for a clearer picture of what can be claimed for.
Shared Escapes use Savills of Birmingham to conduct valuations to establish the full value of eligible plant and equipment if required by any purchaser, as accountants or non-specialist surveyors or your tax advisor may be unable too. In some cases Savills can attain 90% relief.
Purchase price £100,000
Level of Qualifying allowances £ 90,000 ■ Benefits for 40% tax payers £36,000 ■ Benefits to 20% tax payers £18,000
ALWAYS TAKE ADVICE FROM YOUR ACCOUNTANT AND DONT RELY SOLELY ON OUR INFORMATION
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Rentals
Unlike owning a Buy To Let traditional property, you don’t have to find the rental, making life a lot easier.
We only use the UK’s leading Lodge Rental Company
Why?
Because they are part of the biggest network of Holiday Rental companies in the world and dominate the Lodge Rental sector, owned by
The Wyndham Group® who together make up the following
New Yorker Hotel ■ Dolce ■ Baymont Inn & Suites ■ Days Inn ■ Hawthorn Suites ■ Howard Johnson’s ■ Knights Inn ■ Microtel Inn & Suites ■ Ramada ■ Super 8
Travelodge ■ Wingate By Wyndham ■ Wyndham Hotels & Resorts ■ Wyndham Grand Collection ■ Wyndham Garden Hotels ■ Planet Hollywood
Apartments4you ■ Bowhills ■ Blakes Boating & Parks ■ Chez Nous ■ CondoRental Network ■ Cottages4you
Cumbrian Cottages ■ Country Cottages ■ Country Holidays ■ Country Manors ■ Hoseasons®
Individual Travelers Group ■ Italian Life ■ James Villa Holidays ■ RCI ■ Scottish Cottages
Ski Life ■ Stillwells ■ Villas4You ■ Wales Cottages ■ Yorkshire Cottages
We are not affiliated or endorsed by Hoseasons® your relationship with them will be contracted directly with yourself or your park operator, Hoseasons® will
however pay any rental monies direct to your designated bank account.
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Rental Guarantee
The word Guarantee can’t be used lightly as it is an offer which must be backed up and planned for, this is how
and why we can make this bold offer to our Portfolio purchasers.
The Guarantee Period
Rental Income is based on actual incomes being received by our partner Parks on their own Rental Units.
The Guarantee is made by Shared Escapes part of Exchange Time Ltd and only them.
The Guarantee is for a period of 3 years from the start date detailed in your Rental Guarantee Agreement.
The Guarantee is a top up IF you fail to reach the guaranteed return figure agreed and is paid on the final month of the agreement annually.
Shared Escapes deposits your annual Guarantee amount in an Escrow Account to ensure funds are available annually.
After The Guarantee Period Ends
At the end of year 3 you will be allowed to continue renting your lodge through Hoseasons® for as long as you choose.
You can sell or transfer your Portfolio Lodge at anytime.
Your annual rental income should remain constant based on your previous 3 years rental experience.
CALL FOR MORE INFORMATION
01626 374044
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The Pastures
Cartmel, Lake District
Croft Park
Little Weighton, N.Yorkshire
Parmontley Hall
Whitfield, Northumberland
Laceby Manor
Laceby, Lincolnshire
Carvers Retreat
Hawick, Scotland
Rowanwater
Garstang, Lancashire
Parks Also In
Devon, Cornwall,
Warwickshire, Worcestershire
& Cambridgeshire
Shared Escapes
01626 374044
sharedescapes.co.uk
[email protected]