Home from Home - Six reasons why you should consider investing in a Holiday Lodge

With the increasing trend of ‘staycationing’ (choosing to holiday in the UK, rather than choosing to go abroad) showing no signs of abating, the idea of owning your own holiday lodge has become increasingly appealing. These ‘lodges’ can range from a luxury log cabin, complete with accompanying hot tub, to a mini-cottage on a country estate. The list below is not exhaustive; half the fun of owning a holiday lodge is discovering the upsides as you go. That said, there are specific financial advantages that can benefit any investor under the right circumstances. Take a look at six reasons you should consider investing in a holiday lodge , with a few tips to help you make the right choice.

 

  • Familiarity

If there’s one area in particular that you and your partner or family enjoy, like a National Park such as Snowdonia or the Peak District, then why not take the plunge? It makes perfect sense to invest in an area that you know and love. Owning your own holiday lodge also takes away the stress of having to research book hotels, bed-and-breakfasts, caravans and the like. It also means you can explore more and really get to know and appreciate an area.

 

  • Convenience

If you’re a holiday lodge owner, you can make the surroundings fit your own particular tastes and needs, something that you can’t do with a hotel or bed and breakfast. Tired of the decor? Change it. Fancy a snack at midnight or when you return from a long day out? No worries. Parking difficult? Not with your own driveway or spot. Fancy a spontaneous weekend somewhere nice? Only a drive away…

 

  • Community

Investing in a particular area means that you can be part of the local community and contribute to the local economy. If you decide to rent out your holiday lodge, holidaymakers will spend their money locally, directly benefitting local businesses, like leisure providers, pubs, cafes and restaurants. Plus, if you decide to retire there, you not only have accommodation ready to go, but a whole network of friends and support.

 

  • Maintenance

Generally speaking, holiday lodges can work out to be a lot cheaper to maintain and fix any problems that should arise. If you do need to invest in repairs, and we would recommend that you always look after your investments, then any work can be sourced locally, again contributing to the local good.

 

  • Memories

If you invest in a holiday lodge, you’re also investing in yourself. Holiday memories are a valuable source of joy for many people; a particular location or cottage can be part of you and your family’s past that you can look back on. You can also leave the lodge to your children to ensure that the good times keep rolling.

 

  • Eco Friendly Cabins

They are a number of options that include Bio cabins and other renewable energy grants and solutions that can make purchaseing a lodge or cabin an attractive investment. See example cabins.

 

  • Financial

Finally, there are a number of financial advantages to owning a holiday home. Aside from the obvious rental income that you can gain during the holiday season (check out the local holiday rate lets in your area for a realistic comparison) you may (depending on your circumstances) benefit from tax breaks. Since April 2015 , HMRC have designated a holiday let as the following:

 

  • Furnished
  • Available to let for at least 210 days a year
  • It must be let for at least 105 days
  • It must not be occupied by the same tenant for more than 30 consecutive days or for more than 155 days in total

 

If your property fulfils these rules, then furnished holiday lettings will be treated as a trade, rather than an investment, for tax purposes. This means that you can offset any maintenance costs, repairs, renewals, agency fees, finance costs, etc, against income. You are also allowed Capital Allowances on the furniture, furnishings, white goods, plant and machinery. As with any financial decision, it is wise to research thoroughly and be aware of the law and tax rules pertaining to any investments.

All in all, time and care should be taken when making the holiday lodge ownership plunge, but with the right research and consideration you could soon own your own little holiday getaway. All you have to do then is start filling it with those memories… Long weekend at the lodge anyone?

 

Read on: Estimation of Ex-post Income

In the foregoing example, the income for the year 19X0 has been calculated on the basis that the expected future net receipts at the end of the year 19X0 remained the same as those at the beginning of the year. Under such conditions, ex-ante and ex-post income would be the same.

If, however, the present value of expected future net receipts at the end of the year 19X0 are different from the present value of those expected receipts at the beginning of the year, we may say that the ex-post income is different from the ex-ante income. The ex-ante income refers, therefore, to the estimated... see: Estimation of Ex-post Income