Anyone let out holiday homes?
Discussion
Anyone on here let out any holiday homes? Chalets/park homes etc?
If so, how are they doing?
Say you buy one for £20k, total rental income could be anywhere from f**k all to potentially £30k per annum it would seem.
A friend of my parents have one that they paid £15k for and have spent £2k doing it up (2 bed chalet). They can get anywhere from £400-£1000 a week in peak season and a total of 50 weeks a year allowed.
Once you take off ground rent, service charge etc the yield seems a much, much higher percentage than anything else.
My parents are looking to move somewhere (like Dorset) and would manage these properties as they would all be localish.
Even worst case scenario, it still seems like a no brainer.
What are the downsides to these?
If so, how are they doing?
Say you buy one for £20k, total rental income could be anywhere from f**k all to potentially £30k per annum it would seem.
A friend of my parents have one that they paid £15k for and have spent £2k doing it up (2 bed chalet). They can get anywhere from £400-£1000 a week in peak season and a total of 50 weeks a year allowed.
Once you take off ground rent, service charge etc the yield seems a much, much higher percentage than anything else.
My parents are looking to move somewhere (like Dorset) and would manage these properties as they would all be localish.
Even worst case scenario, it still seems like a no brainer.
What are the downsides to these?
No specific XP myself but I did read the other day that UK holidays are doing well at the moment due to lack of travel to places like Egypt, Turkey and France.
Also with the £ not doing so well its not getting people as far as it used to overseas.
That's a good thing I guess, but for someone trying to get into the market probably best to understand that this could be the peak?
Also with the £ not doing so well its not getting people as far as it used to overseas.
That's a good thing I guess, but for someone trying to get into the market probably best to understand that this could be the peak?
Revenues are incredibly area specific.
If you get something in say the North Cotswolds you'll have customers all year round. You're pegged between the two largest and wealthiest cities in the U.K. and both are flooded with cash rich pensioners, families and young workers etc who rent in the countryside all year round.
Conversely, places on the British coast can have incredibly short seasons. And if you get a bad summer spell over the school holidays as we seem to have had this year then you might have no season.
Both tend to get trashed. The former through just high usage and the latter sadly due to the type of punter than can often be found littering the British coastline.
Finally, with log cabins that have been placed by land owners on their land and then leases sold, you ought to question very deeply just why they've sold off what you'd think to be their primary assets after the land? I suspect that most operators know the true cost of running, maintaining and renting a holiday cabin and on top of that set lease clauses that further exacerbate the costs. I may be completely wrong but I suspect the real money lies in selling the cabin leases and not buying them.
Especially when you consider that they are fundamentally depreciating assets and work like short dates lease flats as opposed to being appreciating assets like a long dated lease property. On a short dated lease property you'd aim for a yield of at least 25% so as to get your capital back in under 5 years and then have 5-10 years of rent before dumping it for a £1 before the lease expires. I would expect log cabins to need a similar sort of yield for them to work properly?
If you get something in say the North Cotswolds you'll have customers all year round. You're pegged between the two largest and wealthiest cities in the U.K. and both are flooded with cash rich pensioners, families and young workers etc who rent in the countryside all year round.
Conversely, places on the British coast can have incredibly short seasons. And if you get a bad summer spell over the school holidays as we seem to have had this year then you might have no season.
Both tend to get trashed. The former through just high usage and the latter sadly due to the type of punter than can often be found littering the British coastline.
Finally, with log cabins that have been placed by land owners on their land and then leases sold, you ought to question very deeply just why they've sold off what you'd think to be their primary assets after the land? I suspect that most operators know the true cost of running, maintaining and renting a holiday cabin and on top of that set lease clauses that further exacerbate the costs. I may be completely wrong but I suspect the real money lies in selling the cabin leases and not buying them.
Especially when you consider that they are fundamentally depreciating assets and work like short dates lease flats as opposed to being appreciating assets like a long dated lease property. On a short dated lease property you'd aim for a yield of at least 25% so as to get your capital back in under 5 years and then have 5-10 years of rent before dumping it for a £1 before the lease expires. I would expect log cabins to need a similar sort of yield for them to work properly?
Edited by DonkeyApple on Wednesday 16th August 22:38
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