Should we buy this holiday let business?

Rockporkchop

dopester wrote: »

I personally think it is way too soon to draw your bearings about the extent of the recession, the consequences still playing out, and the economic shocks ahead.

(removes head from sand) I know, I know but I would rather be poor and struggling in a big house in Norfolk than in a shoe box in London. It's so depressing living and working in London at the moment, although I should be grateful that I still have a job I guess.

emmylou69

Just wondering, is the house definitely worth that much? Property in Norfolk is usually much cheaper than in the areas surrounding London - you can get an awful lot for £500k round here :-)

It would have to be really really big and impressive for that much!

Might be worth a look at Rightmove to compare similar properties around Norfolk.

Rockporkchop

Hi emmylou69 - the main house is easily worth £500k on its own without the holiday cottages, small children's playground, detached swimming pool, detached games room and storage outbuildings as well. Plus all the furniture and inventory would be included too.

Chickmug - thanks very much for that link and the further info.

dopester

Rockporkchop wrote: »

(removes head from sand) I know, I know but I would rather be poor and struggling in a big house in Norfolk than in a shoe box in London. It's so depressing living and working in London at the moment, although I should be grateful that I still have a job I guess.

OK but for me this isn't a time to be taking on more debt. Spoke to my well-placed contacts in two well-known companies which have been established for decades earlier this week.

The talk is no longer of pay-freezes, redundancy and pay-cuts. They are questioning how the hell they are going to survive - seriously questioning the continued existence of their companies in the medium term. Like so many others, they borrowed in the boom to expand.. with the expectation that where there is prosperity, prosperity would always continue, and now finding business dropping significantly. The employees, very well paid, might have some shocks coming their way.

I'd rather be in the shoe-box with little debt and savings to be honest, than take on a lot of debt to buy a holiday business, with lots of competitors, where more people will be forced to look at cheap alternatives for any holidays they take. Certainly I wouldn't want to take on a lot of debt, only to find not long after I'm repossessed, property sold for a song at new market levels, and I have nowhere to live and have put family's core-wellbeing at significant risk for my gamble.

Thrugelmir

dopester wrote: »

OK but for me this isn't a time to be taking on more debt. Spoke to my well-placed contacts in two well-known companies which have been established for decades earlier this week.

The talk is no longer of pay-freezes, redundancy and pay-cuts. They are questioning how the hell they are going to survive - seriously questioning the continued existence of their companies in the medium term. Like so many others, they borrowed in the boom to expand.. with the expectation that where there is prosperity, prosperity would always continue, and now finding business dropping significantly. The employees, very well paid, might have some shocks coming their way.

I'd rather be in the shoe-box with little debt and savings to be honest, than take on a lot of debt to buy a holiday business, with lots of competitors, where more people will be forced to look at cheap alternatives for any holidays they take. Certainly I wouldn't want to take on a lot of debt, only to find not long after I'm repossessed, property sold for a song at new market levels, and I have nowhere to live and have put family's core-wellbeing at significant risk for my gamble.

The business is potentially a good idea. But the main house at £500k does appear an extravagence. In reality buying a cheaper property to live in would make the likelihood of the business being a success more likely.

What's the possiblity of just buying the holiday cottages?

Rockporkchop

No possibility of just the cottages unfortunately, it is all or nothing as it is classed as one property with one address as they are all adjoining.

dopester - does that mean you don't want to go halves with me then?!

You are right of course dopester - these are shocking times. My own circumstances have changed beyond recognition in the space of a year. I can't believe we have gone from being a couple with plenty of disposable income, nice holidays and overpaying the mortgage every month to a family of five with me as the sole earner and our house and investments plunging in value as we speak. It's just typical that DH has lost a job he valued, wanted and very much enjoyed but I still have my job which I hate and was planning to give up.

But hey, happy Friday everyone!

chickmug

Thrugelmir wrote: »

The business is potentially a good idea. But the main house at £500k does appear an extravagence. In reality buying a cheaper property to live in would make the likelihood of the business being a success more likely.

What's the possiblity of just buying the holiday cottages?

You raise a very good point.

We used to find many more concerned about the house side and less about the business side. OK if you have cash and other income which many did on this sort of business. I came across a number, after a few years, who had closed the business side down but kept on living in the house as they loved it and the area.

Perhaps do the same in a different area with a different business? Smaller house and more units?

http://www.daltonsbusiness.com/

http://uk.businessesforsale.com/uk/Business-Region/business-for-sale-in-UK.aspx

One I remember was a big house and I mean BIG with several detached holiday units and the couple got very very bored with not a lot to do so they moved into one of the holiday units and converted the house into a trendy B&B.

Rockporkchop

That's what we would do - offer the big house as a let to large groups and live in the 3 bed cottage, at least for a few years anyway. The owners don't do this and it's wasted money as far as I'm concerned.

Very interesting link thanks Chickmug - very surprised to see so many businesses fairly local to me up for sale, some quite cheap too. My local pie and mash shop for £250k though - wow.

Dopester - I meant to say that my current mortgage is the best part of £200k so not exactly little debt, although there is plenty of equity in the house.

chickmug

Rockporkchop wrote: »

That's what we would do - offer the big house as a let to large groups and live in the 3 bed cottage, at least for a few years anyway. The owners don't do this and it's wasted money as far as I'm concerned.

Very interesting link thanks Chickmug - very surprised to see so many businesses fairly local to me up for sale, some quite cheap too. My local pie and mash shop for £250k though - wow.

Dopester - I meant to say that my current mortgage is the best part of £200k so not exactly little debt, although there is plenty of equity in the house.

So no longer a MSE weekend in Norfolk but a 'Pie & Mash' evening now:eek:

Madmel

Chickmug, I am a bit surprised by some of your postings. In my area, which is not Norfolk, places which have planning permission for holiday lets have a 14 week restriction placed on them for any single let. That means that we cannot let our cottage out to the same people for more than 14 weeks consecutively. This dovetails with the holiday parks whose conditions means that they have to shut for 13 weeks in the winter, usually 1st December to 1st March.

We bought this place from an upmarket residential EA. It was marketed as either an ongoing B&B plus lettings business or a family home with separate living accommodation for relatives. We were straight from the first viewing that we didn't want any B&B and would use one cottage as family accommodation too. So we paid the residential price and got the cottage business "for free".

We were very fair to the previous owners, allowing their guests to stay in the cottages for a further 5 weeks after we moved in so they could finish the season. We cleaned up after them, BUT we learned the tricks of the trade at their expense and made our mistakes on THEIR clients (not that there were many!) In return, they left us all their bedding & spares (lightbulbs, washing up stuff etc etc) plus transferred the website and all advertising to our ownership. I thought it was a fair swap, others may disagree but it worked for us.