Thinking of buying and letting out a park home

geek84

Hi Folks

I am thinking of buying and letting out a park home.

Do you think this would be a profitable investment?

Can someone please advice what things I need to look out for when deciding to buy one?

Thank You.

iamana1ias

:doh:

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Loughton_Monkey

What is a 'Park Home'?

Do you mean one of those gruesome depreciating 'assets' that looks a bit like an overgrown caravan?

I've heard it's extremely profitable for the site owners - at the expense of everyone else.

ladymarmalade1970

No it is not a good investment. I have one and i love it but it's VERY expensive. I suppose if i rented it out i could cover my costs but for me that defeats the object of having a holiday "home". TBH i don't think the people that do rent them out make any money out of it. They have problem holiday tenants as well and it can work out more expensive if they steal stuff or trash your van.
I recommend it as an expensive lifestyle choice. I brought last year one for 8500, owner needed a quick sale as was ill. Was up for 11995 but all sales HAVE to be done through the park and they charge 20% if i remember rightly. Our lease runs until 2016 so we had 6 years left on it and after factoring in ALL costs it comes in at around £550 per month (i put the cost of the caravan in there too). I think that is expensive when you think it's like a mortgage however for us (we have dogs) it's perfect. I do struggle to justify the cost sometimes though.
We have one here http://www.hoburne.com/park-details/hoburne-naish?utm_source=google&utm_medium=cpc&utm_term=hoburne%20naish&utm_campaign=HS_Brand

It's lovely and as i work from home i tend to take go down there with the kids most holidays and just work whilst they play in the pool, sea, clubs etc. I also go down there quite a few weekends. It's an hour 10 mins from my home (not peak season) and within 10 mins of us arriving there i can be cooking with glass of wine in hand. I love it but do NOT look on it as an investment. It's not good for that.

greenface

geek84 wrote: »

Hi Folks

I am thinking of buying and letting out a park home.

Do you think this would be a profitable investment?

Can someone please advice what things I need to look out for when deciding to buy one?

Thank You.

Not enough information to comment. Too many more questions . I will try to ask a few but lots more is needed. How much ? How are you financing it? what are the site fees?is gas elec included? Is there a lease ?10/20 years ? Where is it ? is it nice ? would you stay there ? can you sub let? Do others ? are they making or breaking a living ? a profit? how will you advertise it ?

I own a Welsh Holiday Home on a decent site I bought it for cash and did all/most of the work myself to bring it up to a good standard. The park has been well established and i make a decent profit compared to what the money would be making in the bank at the moment.Others who had to borrow the money and need x amount to repay their loans would struggle IMO. We have so far sold nearly enough weeks this year to pay our ground fees (nearly£2k)but still have just under £1k council tax £250 insurance and about £400 in other fees per year. But when we fill all our seven weeks summer holidays thats over £3k in the pot and we fully expect to take in over £5k this year which is over 30% of the purchase price and clear £1.5k in profit after all deductions. You can make a profit but do your sums expect things to break and fees to rise. Mrs Greenface sells ours very well and uses ebay & others. We have repeat customers and are well known on the site by the site owners and other holiday caravan owners which is a massive plus.

saverjustice

Please don't do that, it will become your prison.

greenface

saverjustice wrote: »

Please don't do that, it will become your prison.

Please explain your comments further

saverjustice

I live in Snowdonia, there are plenty of caravans holiday cottages along the coast, the holiday home owners used to come down every weekend during the season, a couple of years ago they started coming down less often, down to once a month in many cases, now quite a few have vanished and the 'vans are being repossessed. The site owners are struggling to justify their entertainment and shopping facilities which sprang up about 10 years ago. I have spoken to shop owners who haven't seen a tourist for seven months, they fear they may have to close down the business before the year end. It might be better elsewhere in the UK but here in Wales it is a mess.

Why put money into something you don't actually own? There is little security of tenure, I have seen dozens of 'owners' given a few months notice to quit because the site has been sold to a new owner who has a new plan to make more money. Some of them had to sell their park homes and caravans on eBay taking whatever they could for them, the less fortunate had to pay the local dealer to take them away!

If you feel comfortable with your cash in such a situation then that is your decision but IMHO it is a recipe for disaster one day in the future.

Some people claim you can buy freehold dwellings in some parts of the country and get a 9% yield, I prefer to buy land, they don't make it any more.

lisyloo

I don't know much about this subject but they have had poor press recently with some unscrupulous site owners charging whatever they like for electricity etc.

Also what many people forget and greenface mentioned is that owning property requires work e.g. maintenance.
You can either do this yourself with your own time if you skilled at DIY/plumbing/painting or whatever is required or pay someone else which of course eats into your profit.
But it is certainly not like putting money in the bank which required no work at all.

Buying one property like buying one share is risky.

There are other ways (like funds) to get access to returns on property.

It can certainly work out well especially if you are prepared to do a lot of the work for free, but the risks and work involved have to be recognised.

greenface

some great comments plus and negative.Agree with the comment on Welsh weekenders are getting less and less . Money is tight for everyone and IMO many people in the North Wales Snowdonia area are from Merseyside and Mankchester. With petrol prices and the state of the A55 for the last two years its a hard decision to make the journey as often. Also visitors are turning up on a friday night with a bag full of Tescos food wine etc. and leave on a sunday without putting a penny or foot into the local traders.
"Putting money into something you dont own" is like renting a house it suits some . My thoughts and its just IMHO last years ash cloud, strikes, delays,deep into recission and troubles in north africa & current earthquake tsunami . People will be staying at home and hopefully having a british holiday if they can afford it . Once again do your sums dont expect a double digit% profit return . If you can break even and have a few off weeks yourself your doing well.

datostar

I understand a 'Park Home' to be the rather more permanent type large moveable structure intended for permanent residence. The OP hasn't really made this clear and the responses he has received seem to relate to holiday park lettings. I think the economics of the two are different, particularly with things like mains services and Council Tax, tenancy agreements etc. I could be wrong, of course, and perhaps the OP did mean a holiday let. Might he care to expand?