Buying a holiday home [lake district]

FreshFruit

Hi, myself and a couple other people are considering a holiday home in the lake district. We have about £100-140k. We plan to share the use of the property and are also considering renting it out ourselves to cover some of the expenses and maybe a small return. 

We understand that it may be cheaper to rent a holiday home but we have money we want to store somewhere. 

I've been searching in the lake district/Cumbria and I see a lot of 'lodges' that are essentially higher end static caravans on camping sites. However they are quite cheap (40-120k), with a yearly pitch fee. 

The lodges brand new are £30-50k, if I were to go this route, maybe it'd be easier to buy a brand new lodge and find a pitch that suits me. 

A big part of me thinks it could be a big mistake to pay £50k+ for a static lodge/caravan.. however houses seem to be rather expensive. Maybe I'm not looking hard enough. I have found some pretty decent cottages for £130k-£150k and I'd feel more comfortable owning an actual property Vs a lodge in a campsite. However I'm unsure if our side rentals would justify the extra cost.  

I guess my question is, are either of these options bad ideas? Has anybody here bought a holiday home with the intent to rent it out as a holiday let? How'd that go? 

I'm drawn to the lodges because of the price and they are often in fantastic grounds. I guess I'd be competing with the campsite when renting it out. 

davilown

don’t forget don’t forget the 3% stamp duty, tax on the income and, of course, all the legal responsibilities that come with being a landlord.

Owleyes00

Pretty sure holiday lodges depreciate in value so worth considering if you are looking on this as an investment 

moneysavinghero

Don't forget that once your lodgey caravan is sited on a park they have you by the balls. Expect to see the site fees go up well in excess of inflation each year and don't forget to read all the small print in the contract.

moneysavinghero

I guess I'd be competing with the campsite when renting it out. 

More likely you would be competing with other people such as yourselves. Much more profitable for the sites to buy a unit then add on 25% and sell it to you and then collect site fees every year than it is to just buy a unit and rent it out and miss out on the 25% markup and the yearly income from site fees. Plus when the unit gets old it's your problem and not theirs (and they will probably have a clause in the contract that your unit cannot be more than x years old to stop the site looking run down)

Flugelhorn

Intrigued where you have found cottages for 130-150k. Last time I sold anything there it was 200k ish for a 2 bed flat. If you want somewhere in the more popular holiday areas it can get pretty expensive

Norman_Castle

FreshFruit said:

I'm drawn to the lodges because of the price and they are often in fantastic grounds.

I'd suspect the fantastic grounds have fantastic annual costs. Your £50k lodge will depreciate to nothing. 

rik111

Lodges depreciate faster than a new car....
If you must buy one, pick up one cheap second hand from someone desperate to get rid of the noose around their neck.
And the cottages you are looking at must be run down in poor locations, anything decent goes for way more than that.

ouraggie

We have a small holiday cottage at the seaside. We do rent it out but our profit is less than £500 a year after expenses. It's a time-consuming way of earning a few bob: constant upkeep, repairs, travel time, lettings admin etc.
Personally, I'd not buy a lodge. My sister has one, which they paid £26,000 for. Site fees are about £2.5 k a year, so that's another £25k over the 10 years they've owned it. Now, as someone else said, it needs to go as its 10 yrs old. They will get £4-5k for it. So that's £45k in all put down the drain. Meanwhile, if they had bought the £60k 2 bedroom terraced house (3 streets away from the beachfront park they are on), which they had considered doing, those houses now sell for double that. 

AnotherJoe

I know the Lake District is a large area but your prices seem somewhat dubious to me. I have friends whose children have bought there (in the Penrith area) and got property at those sort of prices but those were both on a scheme where it's for local workers only with restrictions on how they are sold , basically at significantly under open market value with the same conditions. From what they told me the same house would have been at least 50% more if sold to all comers, maybe up to double. 

And my friends paid,I'm thinking maybe £200k for their house  5 years ago and that's not exactly overlooking a lake or anything scenic. A quick look shows anything in your price range as very non scenic and most definitely not in sweeping parklands, not to be unkind. 

So something where you walk out the front door and see the majestic scenery below you isn't going to be £140k. 

Lodges, maybe, but if you are looking for somewhere to "store" money, a lodge (aka mobile home) isn't it unless you were thinking of a grain store with rats eating away the contents every year, because you can write that down to zero over ten years. I have a friend who owns such a lodge in the new forest and that's basically the deal, you pay the money and it's for ten years and then you are done. Essentially regard the lodge price as part of the site fees but paid up front. 

So for a start I suggest you split your desire to store money from the desire to own a holiday property, if a holiday home is it, spend it on a lodge. 

And if you can't do that, then don't even consider a lodge because there's no way any income will make up for the loss of value of the lodge, or certainly so if you and friends will also be taking the best periods for yourselves. But you'll be buying with a mortgage because £140k won't cut it for a house.