South Lakeland Parks (SLP) Forum

You are absolutely right to check with existing Owners before buying. I have read the responses and my advice is to firstly, confirm your own motives for buying and then secondly, ask the forum who is in a similar position. In my view there are three types of owners

1. Those who bought for enjoyment and never rent
2. Those who bought for enjoyment and rent to cover costs
3. Those who bought purely to obtain rental income and run a business ( be careful as a few responses came from this type of owner)

I am in the second type and I would recomemnd you are very clear about the costs of ownership and the fact the lodge will depreciate ( SLP don't hide this fact)

Please see below a recent message I posted to my neighbours on Applethwaite ( we all bought in 2004 are probably the post experienced group when its come to how to cope with SLP management and there annual changes in charges, service etc )

Hi,

I have had a few emails from owners recently asking what is the right rate to charge for renting and specifically ‘am I getting a good return on my investment’ !

I appreciate anyone’s circumstances are different but let’s try and go with the following model to establish some benchmarks;

Assumptions

• Rates = peak (full week) = £750 and off peak ( mostly weekends) £325

• Utilisation = peak=10 and off peak = 20 ..about 70%

Revenue ( from above) = £14,000

Costs ( from below) = £10,000

• Annual site fees = £4000
• Service charges = £500
• Gas= £500
• Cleaning ( on 30 stays) = £1200
• Agent fees ( 20%) = £2800
• Repairs & other fees= £1000 ..after years 3 your costs of repairs will kick in! .......annual gas, electric, visitBritain , TV licence

Profit (before tax ) = £4000

Depending upon your purchase price the rates are

£100k = 4%
£150k = 2.6%
£200k = 2%

If you have your own website and increasingly owners do then you can probably save £2000,assuming you have advertising and website costs. Even then your return on £150k invest is only 5% .

Given the lodges depreciate in value over time then still aren’t a good investment. For those owners who off set capital allowances then you can reclaim from the tax man a sizeable amount of your outlay

What rates to charge ?

The most expensive I could find on Limefitt for w/c 11/8

2 bed – Shalom = £730
3 bed – Badgers Rest = £ 870

The owners with Cumbrian Cottages are charging for w/c 11/4

2 bed = £650
3 bed = £720

Bookings this year appear to be holding up well despite the credit crunch and I calculate around 20% increased lodge capacity at Limefitt available for rent.

I appreciate many owners ( me included) rent to cover costs and don’t have a dedicated rental lodge. The question is whether you are charging the correct rental and ensuring you cover all your costs . I have excluded mortgage interest charges as that is a variable cost which again most of try and cover in our rentals

I assume for the those who rent lodges for a business and I know some have several lodges on Limefitt and other parks you are looking for the maximum possible rent . If I charge £720 for my lodge I know SLP would have charged around £900 ..so I guess I am holding down the rental cost!

I welcome your thoughts ....I am sure my numbers aren’t accurate or realistic !

.

I almost gave up the will to live! Here's a few one liners

- Owners at Limefitt appear to be acheiving 70% utilisation and this also allows for some owner time!

- Talking to the right tiype of owner is key to making an assessment. In my experience most owners are professionals with very limited time available and don't want to build websites, run side line businesses and merely want to cover costs. This is why Cumbrian Cottages can be a good choice given they are so flexible on renting

- Next year I think the market can stand £700 to £800 per week in peak season for a 3 bed lodge ( 2 bed may get slightly less some weeks)

- Impressed by the Owners Choice magazine this month . Best of luck to Andrew and his new management ...they have a lot of old issues to address