Hayle properties

Compare buy to let with holiday let rental income in Hayle.

Hayle, Penzance and St Ives have always been extremely popular holiday destinations. Now add to the mix Covid-19, making it virtually impossible to holiday abroad, at least in the short term. This means that these locations have become more popular than ever. Naturally the media has picked up on this, with some eye watering headlines about what you can earn from a holiday let rental property.

But is a holiday let rental a better option than a traditional buy to let rental?

There are so many variables to consider. However, for simplicity I’ve based all my findings on a typical 2 bedroom terrace house in Hayle, Cornwall, with a garden and walking distance to the beach. I’ve worked on a purchase price of £170,000.

Holiday let Rental Income

Most agencies will initially quote income for full occupancy. When in reality the average is around 28 weeks, with start-ups achieving around 15 weeks initially.  So I’ve based my calculation on the average of 28 weeks, with peak weeks achieving £1,000 and a low season weeks achieving £350 then variable prices in between.

This would provide you with a gross income of around: £16,850

Annual Running Costs for a Holiday Let property

Agency/marketing fees: These can be as much as 50%, with hidden costs but most are around 20%, so this what I’ve worked on = £3,370 p.a.

You can reduce costs here by managing the property yourself but it is a saturated market and it takes a lot of work to secure a decent number of weeks. If you do it yourself, you will need to use on-line booking portals such as bookings.com or Airbnb which have an overly complicated charging structures and cancellation policies.  You will also need your own website and probably your own Facebook page.

Repairs, Safety and Maintenance

Gas safety check: If you have gas to the property you will be required to have an annual gas safety check this would be around £100.00

You may also want to consider annual or bi-annual PAT testing and an electrical condition report every 5 years.  Although these are not currently a legal requirement for holiday lets.


There are running repairs and inventory replacements to keep on top of throughout the year.  Therefore, a rule of thumb guide is to put aside a 10% slush fund to allow for these eventualities.  If you don’t use all the money in one year, it can be put towards larger costs such as new carpets in a future year.

Repairs and Maintenance costs = £1,685

Cleaning and laundry costs

Allow a minimum of £100 per changeover (more if you provide towels and beach towels) = £2,800

Utilities: Gas and electricity for a 2 bedroom property approx. £80.00 pcm = £960

Council tax: Around £1,200

Total annual running costs: £10,115

Net Income for a Holiday Let Property in Hayle

£16,850 – £10,115  =  £6,735

Holiday let Rental income – Return on investment = 3.96%

Residential Let Income

Currently a 2 bedroom Terrace house in Hayle would achieve around £750 monthly rental income.

Therefore, your gross annual income would be: £9,000

Annual Running Costs for a Residential Let Property

Agency Management Fees of 12% = £1,080

Annual Gas safety check. This is a legal requirement if you have gas to the property and must be carried out annually: £100.00

You would also have electrical safety certification cost once every 5 years and an EPC once every 10 years. 

Repairs and Maintenance

You will rarely have the level of ongoing costs that you’d have with a holiday let but there could be some and you may also have times when your property is empty between lets.  Therefore, its also wise to budget around 10% of your monthly income to cover for such eventualities.

Repairs and Maintenance Costs = £780.00

Utilities: None. These are paid for by the tenant

Council tax: None, this is paid for by the tenant

Total annual running costs: £1,960

Net income for a Residential Let Property in Hayle

£9,000 – £1,960 = £7,040

Residential Let Rental income- Return on investment = 4.14%

As you can see, despite the vast difference in the gross income between a holiday let rental of £16,850 and a residential let of £9,000, the net figure is surprisingly similar.  So please do your sums carefully and work out which type of let works best for you.

This is obviously only half the picture, so please also check out our article looking at the initial set up costs of both different types of lets: http://hayle-property-news.co.uk/is-a-holiday-let-a-better-investment-than-a-residential-let/

6 thoughts on “Compare buy to let with holiday let rental income in Hayle.

  1. Thanks for sharing this information.
    I’ve never really done the comparison.
    I have 3 properties that I rent out on long term rentals through an agency.
    I also have 2 cottages in the New Forest which are holiday lets only.
    The amount of work (I am ‘hands on’) for the holiday lets is absolutely mind blowing. People just don’t appreciate what you have to do to keep on top of everything & to keep the bookings coming in.
    Your figures above are based on 28 weeks occupancy for the holiday let. Anything less would make the figures even worse.
    The one aspect that you haven’t taken into account is the tax situation. I’m not a tax expert & pay an accountant to do that for me. However, I believe that holiday lets have better ‘tax breaks’. This is pushing more people into renting their places out for holidays etc. The market is being flooded through places like Airbnb etc. It is an easy option for people who don’t have the savvy (or time) to do it professionally.
    On the other side of this, of course, is that it means there is becoming a shorting of properties for shorthold tenancies. Supply & demand means that the rents are going up so profits will increase.
    The whole picture needs to be considered when trying to do a comparison.

    1. Thanks for you opinion Christine. I totally agree. Owning a residential letting agency, we know how short of stock this market is and rents are going up because of this. There does, in our view need to be a re-balancing of the market a little bit more in favour of residential landlords once more. I also agree with your comments about the work involved with a holiday let. We have those too and its certainly not for the fainthearted!

  2. I notice in the Holiday rental section you have included in the Council Tax section you have included £1200, if it is classed as a small business it is council tax-exempt, so £1200 can be added to the income figure. Thanks for the time you have taken to compile this interesting comparison.

    1. Hi Nigel. Thanks this is a really good point. Although some holiday let properties don’t tick the right boxes to be classed as small businesses. Plus there are limits in both rental income value and number of properties any one investor can have, in order to qualify for this exemption. But yes, this would be a decent saving should this be the case.

        1. Yes, this is exactly it Nigel and there are other exemptions too. But its a great scheme for the small investor with a couple of properties. However, the other thing to remember is that it may not always be the case. The government have got to pay back the huge debts that have been racked up this year and this could be one of those low hanging fruits they might go after.

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