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  • FIRST POST
    • Imlost69
    • By Imlost69 16th Jul 17, 5:36 PM
    • 5Posts
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    Imlost69
    Investing in a log cabin
    • #1
    • 16th Jul 17, 5:36 PM
    Investing in a log cabin 16th Jul 17 at 5:36 PM
    Hi peeps

    I've just been for a long weekend away.to a log cabin with a hot tub. We paid approx 500 for 3 nights in a 4 berth cabin.

    Having looking at price of a cabin to buy there must be huge profits. I understand you pay a site monthly fee and have to advertise yourself etc. On the site we were the privately owned cabins paid the site cleaners and extra 30 pound to clean there cabin after use.

    Am I missing something or is this a solid investment? They seem popular all year round especially with hot tub. I understand maintenance costs etc but surely....

    Thanks for your response in advance
Page 1
    • dunstonh
    • By dunstonh 16th Jul 17, 5:50 PM
    • 88,754 Posts
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    dunstonh
    • #2
    • 16th Jul 17, 5:50 PM
    • #2
    • 16th Jul 17, 5:50 PM
    Having looking at price of a cabin to buy there must be huge profits
    Not really. Why do you think parks are so keen to sell them?

    I understand you pay a site monthly fee and have to advertise yourself etc.
    Which typically means using a holiday firm that advertises that sort of holiday (hoseasons etc). They take a cut.

    Am I missing something or is this a solid investment?
    Park cost. Holiday company cost. Depreciating asset with a limited life. Heavier maintenance costs during and after the summer season with a need to have someone on call as you may have a busted door that needs fixing after the checkout time of 10am and before the next check-in time of 3pm. Refurbishment costs. Tax. Very illiquid and a lot of money tied up in a park which could close if the owners got into trouble.

    It is possible to extend the life of a cabin to over 100 years but that will increase your costs and maintenance. Many owners are only interested in a relatively short period and dont do the maintenance required. So, buying second hand can be problematic.

    You should not underestimate the damage that occurs to these over the holiday season.
    I am an Independent Financial Adviser (IFA). Comments are for discussion purposes only. They are not financial advice. Different people have different needs and what is right for one person may not be for another. If you feel an area discussed may be relevant to you, then please seek advice from a Financial Adviser local to you.
    • Imlost69
    • By Imlost69 16th Jul 17, 6:07 PM
    • 5 Posts
    • 1 Thanks
    Imlost69
    • #3
    • 16th Jul 17, 6:07 PM
    • #3
    • 16th Jul 17, 6:07 PM
    Thanks for highlighting my oversights. I understand everything has risk and some of the above I didn't consider so thanks. However there must be some reason why people but these cabins and must be making some money
    • tacpot12
    • By tacpot12 16th Jul 17, 6:57 PM
    • 601 Posts
    • 529 Thanks
    tacpot12
    • #4
    • 16th Jul 17, 6:57 PM
    • #4
    • 16th Jul 17, 6:57 PM
    There will be some money to be made but only at enormous risk. Why take a risk when you don't need to?
    • IanManc
    • By IanManc 16th Jul 17, 7:05 PM
    • 298 Posts
    • 417 Thanks
    IanManc
    • #5
    • 16th Jul 17, 7:05 PM
    • #5
    • 16th Jul 17, 7:05 PM
    Thanks for highlighting my oversights. I understand everything has risk and some of the above I didn't consider so thanks. However there must be some reason why people buy these cabins and must be making some money
    Originally posted by Imlost69
    No. There's no "there must be" about it. People do stupid things with their money all the time. Just because people do it doesn't mean that there is a good reason for it or that they make money.
    • Imlost69
    • By Imlost69 16th Jul 17, 7:43 PM
    • 5 Posts
    • 1 Thanks
    Imlost69
    • #6
    • 16th Jul 17, 7:43 PM
    • #6
    • 16th Jul 17, 7:43 PM
    Ok guys. Not as simple as I first imagined. Thanks

    I have a good pension at work but have quite a bit spare cash atm. Considered overpaying mortgage etc.

    Is there any good ways to invest my money. I like idea of renting out etc but it seems high risk and little profit
    • p00hsticks
    • By p00hsticks 16th Jul 17, 7:44 PM
    • 5,528 Posts
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    p00hsticks
    • #7
    • 16th Jul 17, 7:44 PM
    • #7
    • 16th Jul 17, 7:44 PM
    However there must be some reason why people but these cabins and must be making some money
    Originally posted by Imlost69
    People don't necessarily buy second/holiday homes to make a profit and a log cabin fits into the same category. People often buy them in locations they visit regularly to allow them more flexibility to visit, and may let them out to recoup some of the costs involved - but it won't be a money spinner.
    • teddysmum
    • By teddysmum 17th Jul 17, 12:18 PM
    • 8,009 Posts
    • 4,771 Thanks
    teddysmum
    • #8
    • 17th Jul 17, 12:18 PM
    • #8
    • 17th Jul 17, 12:18 PM
    On most static caravan sites, gas, electricity and water/waste disposal come at premium rates, with no choice of provider.

    Peak times will earn good amounts, but for the rest of the year there is a lot of competition, with site owners offering special low rates on their own accommodation .
    • dunstonh
    • By dunstonh 17th Jul 17, 12:47 PM
    • 88,754 Posts
    • 54,086 Thanks
    dunstonh
    • #9
    • 17th Jul 17, 12:47 PM
    • #9
    • 17th Jul 17, 12:47 PM
    Is there any good ways to invest my money. I like idea of renting out etc but it seems high risk and little profit
    Most people do perfectly fine with conventional investment options. When you start venturing into niche or speculative areas you run greater risks as those things are usually unregulated and there are more scammers about. The investments tend to be illiquid too.

    In the case of log cabins, many of those that own them use them pretty heavily themselves throughout the year. I know someone that has one that makes it available for around half the year and they use it themselves or for the family the rest of the time. It was a cheaper option that buying a holiday home (bricks and mortar). I know someone else that has one and they do not rent it out at all and go there most weekends. Neither are viable as investments. They are lifestyle choices. The one that part rents just uses it as a way to recoup some of the costs of having a holiday home.

    Many sites are losing money and the sale of assets is a way to stem that.

    The biggest fear for anyone that owns a unit on a site run by someone else is if the site owner fails. There was one in our area that went into administration last year. Luckily, the administrator kept it on as a going concern and found a buyer.
    I am an Independent Financial Adviser (IFA). Comments are for discussion purposes only. They are not financial advice. Different people have different needs and what is right for one person may not be for another. If you feel an area discussed may be relevant to you, then please seek advice from a Financial Adviser local to you.
    • Ken68
    • By Ken68 17th Jul 17, 12:54 PM
    • 6,251 Posts
    • 3,949 Thanks
    Ken68
    My late brother bought a 2 bed cabin alongside the river at Potter Heigham for £40,000, this was 20 years ago.....recently valued at £140,000.(quick sale, say, £120,000)
    The occasional lettings and family holidays just about paid for the ongoing expenses over the years.
    The downside was that he lived 2 hours away and the changeover between lets was a pain.
    • kidmugsy
    • By kidmugsy 17th Jul 17, 1:04 PM
    • 9,446 Posts
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    kidmugsy
    Can one buy a narrow boat with a hot tub installed? That might make for pleasant holidays. Or a river cruiser to use on the Great Ouse and around the Fens?
    • antrobus
    • By antrobus 17th Jul 17, 1:07 PM
    • 15,032 Posts
    • 21,353 Thanks
    antrobus
    My late brother bought a 2 bed cabin alongside the river at Potter Heigham for £40,000, this was 20 years ago.....recently valued at £140,000.(quick sale, say, £120,000)
    The occasional lettings and family holidays just about paid for the ongoing expenses over the years.
    The downside was that he lived 2 hours away and the changeover between lets was a pain.
    Originally posted by Ken68
    The average Equity Income UT would have turned that £40k into about £170k over 20 years with dividends reinvested. With the upside that there would have been no pain from changeovers.
    • AnotherJoe
    • By AnotherJoe 17th Jul 17, 1:11 PM
    • 7,049 Posts
    • 7,516 Thanks
    AnotherJoe
    Thanks for highlighting my oversights. I understand everything has risk and some of the above I didn't consider so thanks. However there must be some reason why people buy these cabins and must be making some money
    Originally posted by Imlost69

    First point, yes there's a reason people buy, I'm sure for many its because they only look superficially and dont examine or properly understand the finances (especially long term).

    Second point, just because someone buys, it does not imply (as you assumed) that they make money (either ongoing or over the term when its all added up). Plenty of people invest in storage pods, christmas trees, rows of vines, brazilian specialist nut trees ... etc etc ... and then complain in here that their dead-cert lost money.

    Is there any good ways to invest my money
    Originally posted by Imlost69
    Yes, in your pension (its common here to think overpaying mortgage is a better bet, often it isnt) in funds investing in global stock markets. And if you think "ooh thats scary" then you really dont understand the risks investing in holiday homes on a park.
    Last edited by AnotherJoe; 17-07-2017 at 1:15 PM.
    • jimjames
    • By jimjames 17th Jul 17, 1:12 PM
    • 11,927 Posts
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    jimjames
    Is there any good ways to invest my money. I like idea of renting out etc but it seems high risk and little profit
    Originally posted by Imlost69
    What other investments do you have? From the wording I'm assuming you have none other than pension. Although stock market based investments generally don't use the word "guaranteed" it's used by many unprotected risky investments to con investors who believe it means they will get their money back when the reality is that they could lose it all.

    You are far better to have a balanced S&S investment portfolio ideally using ISAs which will go up and down short term but over the long term should comfortably beat cash.
    Remember the saying: if it looks too good to be true it almost certainly is.
    • Imlost69
    • By Imlost69 17th Jul 17, 1:31 PM
    • 5 Posts
    • 1 Thanks
    Imlost69
    I just have spare cash each month. Around 300 quid. Along with a lot of savings. I just want to secure long term financial stability by investing in something such as property. Maybe BIT coin or something similar
    • jimjames
    • By jimjames 17th Jul 17, 1:33 PM
    • 11,927 Posts
    • 10,325 Thanks
    jimjames
    I just have spare cash each month. Around 300 quid. Along with a lot of savings. I just want to secure long term financial stability by investing in something such as property. Maybe BIT coin or something similar
    Originally posted by Imlost69
    Why not mainstream investments in funds (shares)? It seems a bit odd to want long term financial stability but then say you're considering bitcoin and log cabins
    Remember the saying: if it looks too good to be true it almost certainly is.
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