The telegraph reports on the financial wossname of getting a beachhut
Forget the villa in Tuscany or the mansion in Marbella. Now the credit crisis is biting, it may make sense to keep your holiday property day dreams closer to home.
After years of soaring prices, the cost of beach huts is falling back to earth. This is a most discretionary form of property ownership â€“ nobody needs a beach hut â€“ and is proving an early victim of recessionary fears. Strike a deal with someone who needs a quick sale and you could snap up a once-in-a-generation bargain.
They also give some good tips
TEN WAYS TO MAKE A HOLIDAY HOME PAY
1. Rent it out.
Overnight-stay beach huts can rent for between Â£250 and Â£500 a week, and holiday homes for significantly more.
2. Cut the cost of expenses.
Rental income is taxable, but you can offset the cost of any expenses against tax. This includes the cost of a mortgage, plus council tax, management fees and maintenance costs.
3. Let the taxman pay your mortgage.
It is possible to defray your expenses, including any mortgage, not just against rental income, but your other earnings, taking a big slice out of your tax bill.
4. Cut borrowing costs
Extend your own mortgage rather than taking on new debt.
5. Follow the 75 per cent rule.
If taking out a new mortgage for a second home, spread debt between two properties so that each has a deposit of 25 per cent. This will keep rates low.
6. Special holiday let loans.
You won’t get a mortgage for a beach hut but it should be possible to qualify for a normal mortgage for most other holiday homes.
7. Plan cashflow carefully.
Remember income only comes in a few months of the year.
8. Cut council tax bills
Get any discount for part-year occupancy.
9. Get your insurance right
You need a special holiday or second home policy, because it is empty for a large part of the year.
10. Cut your capital gains tax bill.
It is possible to cut CGT bills by switching your primary residence, on which no tax is due, between properties, provided you write to HMRC instructing which is your primary residence shortly after acquiring a new property.