Investing in a log cabin

Imlost69 · 16 July 2017 at 5:36PM

Hi peeps

I've just been for a long weekend away.to a log cabin with a hot tub. We paid approx 500 for 3 nights in a 4 berth cabin.

Having looking at price of a cabin to buy there must be huge profits. I understand you pay a site monthly fee and have to advertise yourself etc. On the site we were the privately owned cabins paid the site cleaners and extra 30 pound to clean there cabin after use.

Am I missing something or is this a solid investment? They seem popular all year round especially with hot tub. I understand maintenance costs etc but surely....

Thanks for your response in advance

dunstonh · 16 July 2017 at 5:50PM

Having looking at price of a cabin to buy there must be huge profits

Not really. Why do you think parks are so keen to sell them?

I understand you pay a site monthly fee and have to advertise yourself etc.

Which typically means using a holiday firm that advertises that sort of holiday (hoseasons etc). They take a cut.

Am I missing something or is this a solid investment?

Park cost. Holiday company cost. Depreciating asset with a limited life. Heavier maintenance costs during and after the summer season with a need to have someone on call as you may have a busted door that needs fixing after the checkout time of 10am and before the next check-in time of 3pm. Refurbishment costs. Tax. Very illiquid and a lot of money tied up in a park which could close if the owners got into trouble.

It is possible to extend the life of a cabin to over 100 years but that will increase your costs and maintenance. Many owners are only interested in a relatively short period and dont do the maintenance required. So, buying second hand can be problematic.

You should not underestimate the damage that occurs to these over the holiday season.

Imlost69 · 16 July 2017 at 6:07PM

Thanks for highlighting my oversights. I understand everything has risk and some of the above I didn't consider so thanks. However there must be some reason why people but these cabins and must be making some money

tacpot12 · 16 July 2017 at 6:57PM

There will be some money to be made but only at enormous risk. Why take a risk when you don't need to?

IanManc · 16 July 2017 at 7:05PM

Imlost69 wrote: »

Thanks for highlighting my oversights. I understand everything has risk and some of the above I didn't consider so thanks. However there must be some reason why people buy these cabins and must be making some money

No. There's no "there must be" about it. People do stupid things with their money all the time. Just because people do it doesn't mean that there is a good reason for it or that they make money.

Imlost69 · 16 July 2017 at 7:43PM

Ok guys. Not as simple as I first imagined. Thanks

I have a good pension at work but have quite a bit spare cash atm. Considered overpaying mortgage etc.

Is there any good ways to invest my money. I like idea of renting out etc but it seems high risk and little profit

p00hsticks · 16 July 2017 at 7:44PM

Imlost69 wrote: »

However there must be some reason why people but these cabins and must be making some money

People don't necessarily buy second/holiday homes to make a profit and a log cabin fits into the same category. People often buy them in locations they visit regularly to allow them more flexibility to visit, and may let them out to recoup some of the costs involved - but it won't be a money spinner.

teddysmum · 17 July 2017 at 12:18PM

On most static caravan sites, gas, electricity and water/waste disposal come at premium rates, with no choice of provider.

Peak times will earn good amounts, but for the rest of the year there is a lot of competition, with site owners offering special low rates on their own accommodation .

dunstonh · 17 July 2017 at 12:47PM

Is there any good ways to invest my money. I like idea of renting out etc but it seems high risk and little profit

Most people do perfectly fine with conventional investment options. When you start venturing into niche or speculative areas you run greater risks as those things are usually unregulated and there are more scammers about. The investments tend to be illiquid too.

In the case of log cabins, many of those that own them use them pretty heavily themselves throughout the year. I know someone that has one that makes it available for around half the year and they use it themselves or for the family the rest of the time. It was a cheaper option that buying a holiday home (bricks and mortar). I know someone else that has one and they do not rent it out at all and go there most weekends. Neither are viable as investments. They are lifestyle choices. The one that part rents just uses it as a way to recoup some of the costs of having a holiday home.

Many sites are losing money and the sale of assets is a way to stem that.

The biggest fear for anyone that owns a unit on a site run by someone else is if the site owner fails. There was one in our area that went into administration last year. Luckily, the administrator kept it on as a going concern and found a buyer.

Ken68 · 17 July 2017 at 12:54PM

My late brother bought a 2 bed cabin alongside the river at Potter Heigham for £40,000, this was 20 years ago.....recently valued at £140,000.(quick sale, say, £120,000)
The occasional lettings and family holidays just about paid for the ongoing expenses over the years.
The downside was that he lived 2 hours away and the changeover between lets was a pain.

kidmugsy · 17 July 2017 at 1:04PM

Can one buy a narrow boat with a hot tub installed? That might make for pleasant holidays. Or a river cruiser to use on the Great Ouse and around the Fens?

Investing in a log cabin

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