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Holiday Park Investment Or Not. What To Do With £70,000
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promises a 10% return for the first 5 years and 12% net return for the 2nd 5 years of a 10 year lease
If it is that good then why are they marketing it to the great unwashed? Surely they'd just borrow a load of money at current market rates (say 3% per annum) and plough it in themselves. Then they'd be making ~7% per annum for the first five years.
Why bother going to all that hassle of marketing it, dealing with John Q. Public, and so on just to get you to put your money into the scheme?
Maybe, just maybe, they have no confidence in their predictions of returns. Maybe, just maybe, they make their money from suckers incautious investors ploughing their life savings into the scheme?
:doh:0 -
Funnily enough my partner and I were thinking of diversifying our investments and we have spotted several holiday chalets/statics on parks around where we live for sale. Some of them look really nice, with great interiors for a few 10s of 1000s.
However, this thread has provided very useful insight into that world, and we are re-thinking our strategy.
Thank you once again Money Saving Experts!If you want to be rich, live like you're poor; if you want to be poor, live like you're rich.0 -
Bravepants wrote: »Funnily enough my partner and I were thinking of diversifying our investments and we have spotted several holiday chalets/statics on parks around where we live for sale. Some of them look really nice, with great interiors for a few 10s of 1000s.
However, this thread has provided very useful insight into that world, and we are re-thinking our strategy.
Thank you once again Money Saving Experts!
Like a lot of these things, it can be down to timing. However, the problem is the lack of control. Yes, you dont have any real control on management of companies held within your portfolio. However, you do have control on how you invest your portfolio. If you want out, you sell the fund today and the money is available within a day or two.
If you put £70k into a multi asset portfolio then you probably have less than 1% in any one company. One of those was probably Carillion. However, if only 0.2% of your portfolio was in that and it fails with total loss, then you have lost 0.2%. No big deal.
If you put £70k into a park home and the park owner fails or gets tired and wants to retire and doesnt care any more, then your loss potential is much greater.
That holiday complex I mentioned earlier that is not far from the OP starting selling chalets about 35 years ago. Probably for around 25 years, it would have done alright. Probably around the same as an investment portfolio. So, if you asked someone who owned one of the chalets in that period, they would say it was good for them. However, if you asked someone who owned one in the last 10 years, they would say it is a disaster. Timing and luck has a lot to do with these things.
Also, interesting to note is the tripadviser reviews on the chalets and lodges for that site note that the buildings smell mouldy and need modernising. The owner of the site often replies saying that the particular lodge or chalet in question is not owned by the site but a third party. However, the typical holiday maker doesnt make that differential as they booked a holiday in that park. Others reading the review wont know if that bad lodge is the one they are potentially booking or not. So, it is being measured by the worst.
There is so much out of your control and so much of your money in a single asset.I am an Independent Financial Adviser (IFA). The comments I make are just my opinion and are for discussion purposes only. They are not financial advice and you should not treat them as such. If you feel an area discussed may be relevant to you, then please seek advice from an Independent Financial Adviser local to you.0 -
The bottom line for me with all these storage pod / car park space / student bedroom / hotel bedroom / holiday chalet offers is this:
If it is so good, why are they offering it to the public instead of keeping all the goodies for themselves?
And the answer to that question always is that it isn't as good as they say or you think it is.
However there have always been, and always will be, people who believe that this time it is different.
It never is.0
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