If you want to make money on property, buy a holiday let. New research from holiday property fund Second Estates says renting out a property on a weekly basis to holidaymakers is one of the best ways to make money in the UK.
According to its data, holiday lets provided returns 1.1 percentage points above those of residential buy-to-let properties in the last 12 months. They also outperformed all other major letting categories such as student accommodation.
The longer-term forecast from the property fund suggests holiday lets will continue to outperform other parts of the letting sector over the next five years.
Rental income is 3 times higher
According to Second Estates, the average holiday let made £563 per week in 2017. That compares to £191 for a buy-to-let residential home. When off-season periods are taken into account, holiday lets still bring in almost three times more income than residential buy-to-lets.
Alistair Malins, chief executive officer of Second Estates, said: “This research demonstrates the strength of the UK holiday property market as an emerging alternative asset class.”
Around a fifth (19 percent) of UK households live in private rented accommodation with around two million landlords owning buy-to-let accommodation. Only around 165,000 of those properties owned by landlords are holidays lets, suggesting there is scope for more buyers to move into the holiday accommodation market.