Thoughts on buying a holiday home.

osian

In a similar thread to the static caravan thread, I was wondering if anyone has bought their own holiday home.

We've always liked the thought of buying our own holiday home (in the form of a small flat or long term chalet perhaps), somewhere where we can keep some clothes and essentials and just pop down for the weekend or the odd week in the warmer months.

I'd like to buy one about an hours drive from our main home in a fairly mainstream touristy area, so we'd aim to get a lot of personal use from it as well as trying to rent it out to holiday makers to try and recoup some costs.

As far as the initial purchase is concerned, it would be affordable for us, but I wonder how affordable it would be to run a small place for use on weekends/ holidays only.

If anyone has the time to answer some of my questions, I'd be grateful:
Does anyone have their own holiday home?
Do you get a lot of use from it on a personal level or does the novelty wear off after a while?
Do you rent it out - is this worth your while?
What kind of costs would I have to consider?

We also like caravans too, but the depreciation cost, costs of updating to new caravans and yearly site fees etc put us off. I'd also like something I can sell on in 20-30 years time, so thinking about the long term investment side of things too.

Just wondering if it's a worthwhile thing to do or is it just cheaper to to just book holidays the normal way (though soon will have a school age child and our holidays are going to go up in price I think).

I am also concerned about the general price of houses and whether they are going to drop or not (but that's another thread I think!!).

greenface

"I'd like to buy one about an hours drive from our main home in a fairly mainstream touristy area,"

Be a nice one and give us a clue where you're a hour away from. Roughly???
Yes i own a holiday chalet in North Wales
Never stayed in it we own another static on the same site
Friends have stayed in it though and loved it
Site fees, council tax,rates, TV licence, Often garden maintenence fees,Insurance
Prices where i am vary between 17k & 55k(20 years to 999year lease) ATM .yearly fees just over 3k ATM

osian

Thanks, would be looking at either Pembrokeshire or Ceredigion. Tenby would be the main area of preference but would consider anywhere on that coastline.

greenface

And a beautiful part of the world too. Good luck have a play with rightmove etc and put the postcode in see what pops up.

sarahjones4397

We bought a Holiday home on the South coast when we lived in London. Luckily it was in an area that already catered to tourists so the 'infrastructure' such as cleaning and holiday letting agents were already in place to deal with things like weekly change overs and putting the bins out. While the latter seemed like a simple thing to do if the guests failed to do it on bin day then the next guests would be met with a wheelie bin full of wine bottles. Expect to pay about 10% for the change around cleans. In terms of advertising gumtree was pretty good but so was the local newsagents in west London as it was quite easy for families to pop down for a weekend.

Primarily it was our second home so we looked at covering the mortgage rather than making a profit. It usually takes a few years to build up bookings so be aware of this and put some money aside to cover the mortgage if you're taking one out.

If you've got a family and escaping 3/4 weeks of the year to it then the price you'd probably pay for those holidays would probably cover most of the mortgage. But again, ask yourself do you want to be going back to the same place every year and will your kids? From my perspective we chose Camber because my Husband and I like walks on the beach, daughter enjoys sailing which she does at the local centre and my son is an avid kite surfer so something for everyone.

sunshinetours

You are either going to have something on a holiday site which will have management/service charges and electriciity or gas or a normal residential flat etc which will haev regular utilities like council tax, insurance, light and heat, water etc. Combined with maintenece costs (boiler service, redecoration outside inside etc) you would have to weigh up whether that would work out less than paying for holidays.

You also of course have the finance costs of actually buying the place which is either loan or mortgage interest and if buying cash, opportunity cost of not having that money invested at say 2.5/3.5%

Obviously some of those costs can be offset by renting out, but then it won't be "your second home" as such

I always almost without exception, say that second homes/holiday home are nice things to have if you can afford them and not be worried about the costs. As a money saving excercise they very rarely make sense

Cash-Cow_3

Thought about it a few times but decided against it. Here's why.

Every where I would want to stay is just too far for regular weekends away. Petrol costs and travelling time would just become a burden.

I wouldn't want strangers in 'my house' yet that would be the only way to even partly make the figures stack up. A property laying idle if just a wasted, expensive pile of bricks. I could rent to family and friends I guess but not enough of them to cover costs and I wouldn't in fairness be able to charge market rents. So if I were to rent out my house this essentially would almost be a 'time share' and with the best rents and occupation being in peak times when the weather is better this is just when I would want to use it!

Although there are areas that I love visiting year in year out, the enjoyment of picking new properties in different villages/towns to stay in is all part of the fun. I'm not sure I would like every holiday to be in the same house.

It kind of makes more sense in retirement when an extended stay is possible.

p00hsticks

We've also considered it but found it just didn't stack up - I think the only reason for doing it would be if there is a particular location that you absolutely love and would always want to go to, but wher it is difficult to find accommodation.


The way we ended up looking at it was this;

Try working out how much it would cost you - not just to buy in the first place, but also in maintenance, council tax, service charges etc (less any money you would get from renting it out) .... Then imagine you were putting that money into a savings account instead and work out how many holidays / weekend breaks / hotel stays you could pay for.

osian

Thank you for all your replies, they've been really helpful.
My laptop is playing up at present but I'll return soon with a better reply. Thanks.

NeverAgain_2

Don't under-estimate the aggro involved in maintenance, particularly if you intend to rent it out.

I have a couple of friends who got fed-up with holiday homes and sold them after a few years.

Residential property is likely to be a good investment in the medium and longer term, so it's unlikely you would lose much if you decided to sell.

I have a static caravan, which requires some maintenance, but is simpler to look after than a bricks and mortar property.

The downside is the value of the caravan will depreciate to next-to-nothing in 15 or 20 years, so it's money spent, not invested.

jhobson

We have a pine lodge in the Lakes and we loved it so much we ended up buying one to let, and now have 4 rental units, so it can work. We make a good return but as has been pointed out it can be a lot of hassle too. I wrote an article about what you need to be aware of when buying a pine lodge type home that might be of interest for you. It's written about a specific location but a lot of what is there applies to any log cabin / chalet type investment. It's at www. limefitt.com/smf/buying-a-lodge/what-you-really-need-to-know-when-buying-a-lodge-at-limefitt-park/. (You'll have to copy & paste the link and remove the space after www. as the forum reasonably enough doesn't like newish users posting links). I hope his helps. The final paragraph of what ended up as a bit of a marathon essay takes up p00hsticks point about the opportunity cost :-)

Key things to think about are the list of running costs, the amount of site fees, whether the park you choose allows you to sublet, exit charges that can be as high as 15% of sale proceeds, and marketing costs.