Holiday Park Lodge Investment

mmistroni

HI All
 i got contacted recently by a company  offering me to buy a logde in a holiday park for e.g 45K
I am guarantteed an 8% net yield , paid semi annually.
After 5 years, the company will buy back the lodge from me at 110% price.
Seems too good to be true.. 
Anyone had experience on this and can give some feedback ?

Thanks in advance and regards
 Marco

Brie

I would be reading through the T&Cs so very very closely.  I don't see how any company whatever their product can guarantee an 8% net yield.  Or a rebuy at 110%.  Even assuming a good market in lodge rentals and a steady increase in lodge value what guarantee is there that the company will even exist in 5 years.  

I do agree with your statement that it seems to good to be true.  And I can't help picturing pyramids.

Martico

You'd have to ask yourself why on earth the company don't just finance the lodge and rake in the profits themselves. 

Novice_investor101

That deal has SCAM written all over it. 

There’s no guarantees that good in any legitimate investment opportunity. 

user1977

Where did they get your details from?

Grumpy_chap

mmistroni said:

HI All
 i got contacted recently by a company  offering me to buy a logde in a holiday park for e.g 45K
I am guarantteed an 8% net yield , paid semi annually.
After 5 years, the company will buy back the lodge from me at 110% price.
Seems too good to be true.. 
Anyone had experience on this and can give some feedback ?

Thanks in advance and regards
 Marco

It does seem too good to be true.

As others have said, why would the current owner not simply take the guaranteed returns?
There are reasons why a company would sell a lodge and pass on the rental yield.  The rate indicated (assuming they mean net of fees and not net of tax) is possibly plausible.

The part that really screams "scam" is the guaranteed future buy-back.  These lodges are depreciating assets so how can it be worth more in the future?

HappyHarry

110% of the original purchase price or 110% of the value they deem it to be worth in 5 years' time?

If the latter, then you are simply financing their lodges whilst getting some of your capital returned semi-annually.

SDLT_Geek

The Financial Conduct Authority have a scam checker here which you can use: https://www.fca.org.uk/scamsmart 

elsien

This lot are offering a similar deal. (I know nothing about them, I just googled out of curiosity). No company details. No address. 
Unless my laptop is malfunctioning, the link to their commercial terms etc isn't working. All you get is the headline shouty bits. If they can't get the t&C on their website, you have to wonder why. 
Investment in holiday lodges in UK holiday parks - Liv Lodges
If the people who contacted you are anything similar, then you probably really don't want to go there. 

Neil49

Take a close look at the annual running costs involved such as site fees, insurance, electricity and gas (probably cylinders) at their rates, how many weeks / months the site is closed in the winter. See how much the lodges rent out for and then find out how much they deduct in charges. 

Stubod

..I have a bargepole you can borrow.....