We absolutely love owning our own holiday home and we wouldn’t change it for the world. But we also know that owners come and go very quickly because they didn’t do their homework before committing to buy. We have owned 4 different holiday / vacation homes on 2 different sites and we made some very expensive mistakes along the way so I am going to share some of the things we wish we had known before buying a rental property. Here are 10 things you need to know before buying a holiday home
1. Is there an age limit on site
Fortunately there isn’t an age limit on the site we are on, however they do ask you keep your van in a good condition which we think is a fair thing to ask of owners. Some sites however will only have vans up to 7 years old. Meaning you would need to buy a new van every 7 years, or leave the site with your van. This is especially important if you plan on buying a preloved holiday home as you don’t want to buy a van to find it actually only has months left until it has to be removed from site or upgraded.
This is also a separate condition to your site licence, which is renewed periodically and this again varies by site.
2. Are you allowed to rent privately or do the site do lettings
Are you planning on just using the van yourselves, or do you want to allow friends and family to stay, or even rent it out to help cover costs. The usage will vary by site – you will find sites that only allow owners and their immediate family, sites that only allow subletting via their own service or (like our site) sites that allow you to sublet yourself, a property manager or via their own service.
If you are going to use the sites service you will need to find out what happens in the event of something being damaged or stolen – do they cover this or will you need additional insurance. Also do you give you a fixed amount per let or will it vary and how easy is it to take dates back if you change your mind and decide to go to your holiday home when you’ve previously agreed to let them sublet it.
3. What are all the other costs
The extras soon add up in addition to most sites Site fees there will be gas, electric, water, business rates, annual safety tests, insurance, tv licence, are there extra charges for maintenance? If you are renting out does your insurance cover malicious damage, if not you may want to add this on also.
You should also find out can you use external companies to do safety checks etc so you can do a price comparison to make sure you are getting the best deal.
It’s also sensible to open a separate account to keep your rental income in ready to pay your bills when they are billed to you. We use Starling – If you join Starling Bank and open an account, they’ll plant a tree for us. Just use my link to apply for an account: https://www.starlingbank.com/referral/?code=8jy5Ds
10 things you need to know before buying a holiday home
4. Is the Gas mains or bottles
This is one thing that was a major inconvenience when we bought our first holiday home. If you are going to be renting your holiday home out, do you want renters ringing you late at night because the gas has run out? No matter how many times we told our guests (and even had a sign on the wall to call security) they would still ring us. Moving to a pitch with piped gas not only stopped this but gave our guests (and us!) a better experience not having to worry about this happening.
Something else you want to consider is can you use external suppliers for bottled gas, on our site we are not allowed and gas bottles were around £60 each from the site.
If you are piped gas find out what the standing charge is (The amount you will be charged regardless of whether you are using any gas) + the usage charge per unit.
5. Can you afford it?
We know how easy it is to get swept away with the dream of owning your own holiday home, believe me we have been there. It all sounds like a great idea when you see the adverts of ‘own your own holiday home for as little as £200 a month’ This figure is however generally just the finance payments for your van. You also need to take into account all the above costs (check with your site but generally these are billed annually at the end of the season and become due before the start of the next season)
When financing your holiday home, If you aren’t able to pay cash there are several options for funding it, most sites offer their own finance packages. We have used Evergreen and Black Horse previously. Evergreen have higher interest rates than Black Horse (Santander is another we know is often used) but we didn’t have any problems with either. When checking your finance documents ensure you read them properly. I know its boring, I know it’s alot but make sure you question anything you aren’t sure of. What happens if you default? What happens if you want to sell? What happens if you want to hand the van back do they have a hand back clause?
I also know of people who took unsecured bank loans to pay for their holiday homes and when they’ve come to sell them found themselves stuck paying a loan back when they no longer have a holiday home as the sale price didn’t cover the outstanding balance on the loan and as it wasn’t secured against the van couldn’t take advantage of the 50% hand back rule most finance companies will have in place
6. What happens if you need/want to sell?
It’s a good idea to find out if you decided holiday home ownership is no longer for you what are your options. Does the site do buy backs? Can you sell privately? Can you transfer ownership to a friend or family member? Can you contact a trader/dealer to buy it from you? Are there fee’s for selling? Or for disconnection. I know selling your van when you are just looking at buying won’t be your first though but this is where we see most owners lose out.
7. Is the static you are buying right for you?
When looking at holiday homes you will be overwhelmed with choice! 2, 3 or 4 bedrooms, extra bed in the lounge? Fixed furniture or freestanding? Central Heating or fan heaters? How much Storage? Extras such as Washing machines, dishwashers, even a bath!
This is going to be your second home, so you want to make sure you get exactly what YOU want – Don’t compromise on your must haves – it is likely to cost you more in the long run when you need to upgrade because you didn’t hold out for what you really wanted. Holiday homes depreciate rapidly so I would go for the best you can afford.
I will use our experiences as an example:
We got our first holiday home, they called it a ‘starter’ holiday home and it was BASIC. It was a Willerby Salsa 3 bed, which on our sites lettings is a Deluxe grade van (so it generates the lowest rental income) Firstly it only had fan heaters, we got our van in the spring so didn’t even consider how cold it was going to be come winter, I can tell you now it was cold, so cold we agreed an upgrade before we had even owned the van a year. It also had a tiny fridge with an ice box, we were a family of 7 back then I don’t know what we were thinking that this would be suitable for us if we were going to be staying more than a couple of days. We think we paid around £28,000 for this one.
We upgraded to a Swift Moselle Coastal, again a 3 bed, but this time with central heating and wow what a difference it makes. And yes we do know you can have central heating added to your van but this is a cost and we were told the van we had wasn’t adequately insulated to make it worth while. This moved us up to the Prestige level of lets so a slightly higher income bracket it also came with a full sized fridge freezer, much more suitable for longer breaks and larger families. This van cost us £37,536 and we were given £18,768 as PX for our Willerby just a year after buying it.
We then realised in the summer months our van was too hot, and we wished we had front opening doors. This would also mean we would need decking, which we couldn’t have on the pitch we were on, so we would have to move to a different (and more expensive) part of the park to have room for this. So on our last upgrade we went for a brand new Platinum graded van with Washing Machine, Dishwasher, 3 bedrooms, central heating, double glazing, front opening doors and decking.
We paid £69,255.77 and was only given £17,508 as PX for our Moselle just 2 years later. It scares me the per cent of depreciation they attract.
I am still wishing we had gone for a holiday home with a bath but my husband refuses to upgrade again any time soon! We also had 2 more babies since buying it and realised a travel cot doesn’t fit in the main bedroom so again an important factor to consider if you have / are planning on having babies or renting out.
8. How far is the site from home
How far do you want to travel? If you are likely to only be using it at weekends do you really want a 4 hour drive each way?
Probably not so much of a problem if you are just a couple with no children, but if you have a car full of small impatient people asking if you are there yet every 5 minutes then you probably want something closer to home. If you will also be travelling during rush hour each time this could add hours onto your journey. We loved our holiday home in Devon but it’s one of the most popular areas for tourists it could add 2-3 hours to our journey on a Friday night.
Also think about what is near to the site – is there a supermarket nearby? Are there supermarkets that will deliver to site? One for us is – do Just Eat, Uber Eats or Deliveroo deliver? Eating and shopping on site all the time can be very expensive if you plan on spending a lot of time at your holiday home.
9. What Facilities does your site offer?
Facilities can vary from sites offering Swimming pools, gyms, saunas, owners only events, discounts on site shops and activities to having nothing more than a small shop (I even know of some where they have nothing and the caravans are literally just in a farmers field!) The more facilities you have, the higher the annual cost is likely to be, do you really need all those facilities? Could you find a cheaper site and find somewhere local that offers these things for when you want to use them. I could count on one hand the number of times I have used the swimming pool where we are in the last 6 years!
10. Residential vs Holiday Site
For those planning on living in their home its really important to check your sites licence. Covid really highlighted the number of people using their holiday homes as their primary residence, all of whom found themselves homeless when they were told they had just 48 hours to leave site when everything was closed. Although we would like to think we won’t have another event like this in our lifetime it is worth knowing you can not legally live on a holiday park. You would need to find a park with a residential licence – a good rule is, if the site isn’t open 365 days of the year, it’s probably got a holiday licence and this can’t be your primary home.
Overall remember it is a lifestyle choice. If you are going to need to rent it out more often than you use it you would be better off booking a break every month and save yourself the stress! I hope you found 10 things you need to know before buying a holiday home useful and If you have any questions feel free to ask below
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