Investing in managed holiday accommodation

chrisgeller

Hi, 
I met someone who was doing this a few years back - now I'm looking for a solid example or anyone who has experience of it.
I'm interested in buying a flat somewhere in the UK that is part of a managed holiday accommodation block. I'd own it, but for the majority of the year it would be rented out to holidaymakers and managed on my behalf. At my option, I could book out when I wanted to use it, and in theory could just use it for the whole year if I wanted to.
Anyone come across anything like this?

eddddy

You need to be careful, there are a lot of 'Holiday Home Investment Opportunities' which are little more than scams.

Here's a glowing news story from 2015 explaining that a holiday homes investment company was guaranteeing 8% returns per year: https://www.express.co.uk/life-style/property/560841/The-Dream-Lodge-Group-offer-holiday-accommodation-to-investors

And here's another news story explaining that the same scheme went bust in 2019:

A total of 1,154 investors were owed £25.6m after buying into the luxury lodge scheme, which promised a return of 8pc on investments - plus four weeks holiday a year at any one of the parks.

https://www.eadt.co.uk/business/dream-lodge-group-investors-targeted-by-scammers-1-6534274

I know a few people who have enquired about unregulated investment schemes (like holiday home investments). I think the first rule is to ignore every word the salesperson says. Only rely on what the written contract says. But even that won't help, if the company goes bust.

AnotherJoe

This is a terrible idea if it's done for investment purposes. I know someone who owns a static caravan on a well run site which she could let out in the way you describe (though she just lets out to friends and family privately) but she acknowledges it's not a profitable operation, it just a convenient place to stay at weekends or weeks when she fancies without having to book anything.
if it was as profitable as the operators of these schemes say when they advertise,  why would they give away much of that to others?
As the post above, nearly every mention of investing in holiday schemes that is here is in regard to scam, bankrupt, loss, can't sell except at huge loss,  and so on. 

Steer well clear. 

Comms69

Why would someone go to the time to build purpose built holiday accomodation, find a management company and then asset strip?

davidmcn

chrisgeller said:

I'm interested in buying a flat somewhere in the UK that is part of a managed holiday accommodation block. I'd own it, but for the majority of the year it would be rented out to holidaymakers and managed on my behalf. At my option, I could book out when I wanted to use it, and in theory could just use it for the whole year if I wanted to.

What's the attraction in it being part of a block (where I guess you're locked into using the "resident" management, as well as possibly other things), rather than just getting a stand-alone property and sorting out management yourself?

Murphybear

Don’t know if this will help as it’s not quite the same.

i knew someone who had a cottage near her own home in Devon, a few miles from Exeter. She let this unfurnished and although she didn’t have many voids she suddenly decided to turn it into a holiday home as she could make more money.  

Unfortunately she underestimated the costs.  Furnishing a property from head to toe including all the minor things in the kitchen cost a lot of money.  If you fill it with old tat then the feedback may not be so good.  She also understimated the time and cost of cleaning it each week.  The costs of using a holiday company are very high.  She also assumed it would be full most of the year but even in a desirable area of Devon it wasn’t.

The last I heard she went back to ordinary letting.

Speaking as someone who has spent many happy hours in holiday cottages in the U.K. and Ireland a flat in a block would be the bottom of my list

Sorry to sound a bit negative but it isn’t as simple as buying a property then sitting back and watch the money roll in

kangoora

I would take with a huge pinch of salt anyone saying they are making money doing this, most people hate to admit they've been an idiot and are losing money hand over fist.

80% of what you find will be scams, 19% will be terrible investments, 1% may be OK. Good luck finding the 1%

What you could do is look to buy a flat/house and run it as a BTL (maybe use a management company) but then you need a BTL mortgage (min 25% deposit), all the necessary legals and checks etc.  I wouldn't even approach this without a detailed business plan, costings, projected returns - done by you or your accountant (not by some random salesman showing how great the 'investment'  is).