Holiday Park Lodge Investment

Murphybear

£45 k seems very cheap.  In our part of the world you can add a 2 onto the 45.  Reselling these places is notoriously difficult.  You know what they say, if it sounds too good to be true …

eddddy

mmistroni said:

After 5 years, the company will buy back the lodge from me at 110% price.

A few years ago, I read through a contract for a similar type of 'investment', where the company offered "Guaranteed buy back after 5 years at the price you paid".

When I read the 120 page contract, I found a clause on around page 95 that said something like this...

Guaranteed buy back after 5 years

• We guarantee to buy the property back for the price you paid, if we have sufficient funds available.

• We will decide whether we have sufficient funds available.

• We will not tell you what constitutes 'sufficient funds' and/or how we calculate 'sufficient funds'.

• We will not tell you how much funds we have available.

• Our decision on whether we have sufficient funds will be final. We will not enter into any discussion with you on this matter.

That was one of the worst clauses in the contract, but there were some other pretty bad ones.

(I suspect that some people signed that contract without reading every clause in the 120 page contract - and may have got a nasty surprise.)


Based on your description of that holiday lodge scheme, I'd be pretty sure that it's essentially a scam.

Schwarzwald

Devil will be in the details.
in effect you are entering a long term lease with them and grant them a purchase option in 3/5/7 years.

the obvious one is: you take a lot of counter party risk on the company. One major guarantee they will not give is that they will be still around when you like to sell.

other risks are the exact definitions of “guaranteed” yield and the sale option. There will be lots of outs for them why the yield they now say they will pay ends up lower and how they can escape their obligation to purchase the lodge.

the liv lodges link is quite a telling example: no transparency.

if these companies cant even be transparent on their websites, dont expect transparency in their T&Cs leave alone general business dealings.

[Deleted User]

SDLT_Geek said:

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

Good post 👍

km1500

also check who is responsible for insurance, maintenance, repairs, cleaning, local authority taxes payment to the landowner  if any, advertising, admin involved in taking payments and running a booking system, gas and electrical safety testing, utilities standing charges when empty etc  the list goes on

Mstty

I have a real world life example for you.

My Aunt owns a caravan and the four years ago her neighbour just wasn't using their two year old.caravan so they offered a sum and bought it to rent out.

Forgetting the purchase price (although a bargain) with 75% occupancy in the summer months it will pay the ground rent for both caravans and that's with my Aunt doing to turnovers.

With the ever increases ground rent (RPI linked) they will look to break even next year and decide whether to sell the second caravan off. (If very lucky over the five years they may only just break even and that was with a very cheap almost brand new caravan.to start with.

Reality versus fiction

mmistroni

Thanks all for useful comments

Grumpy_chap

The OP may wish to read this recent thread where the argument is made that half of an inherited lodge / caravan has zero / nominal value only:
https://forums.moneysavingexpert.com/discussion/6467004/universal-credit-and-owning-half-a-property-need-advice#latest

Sea_Shell

£45k sounds more like static caravan territory.  Proper lodges (double width) are more like £200k+.

They can be an ideal holiday home, if you can get the benefit of it,  but sites can be picky about age/condition and there are lots of "hidden" costs.

Only buy one (on a reputable site) if you are happy to "write off" your capital and pay the other annual costs involved.  They are a depreciating asset and it just won't be worth much (if anything) in X years time.


Personally, we just rent them (lodges) as and when we want a break away.   ~£100 a night out of high season.

lincroft1710

Sea_Shell said:

£45k sounds more like static caravan territory.  Proper lodges (double width) are more like £200k+.

There is a park group on the South Coast where there are lodges from £350.000 going right up to £600,000!!