NEW: Cornish Resort & Spa
New Lodges In A Fully Built & Operational Resort in Cornwall
Retallack is a delightful resort in Cornwall that has recently been acquired by our newest partner. They are well funded by a top American firm of wealth managers and this is their 8th UK acquisition in the last 12 months.
They are now investing heavily in extending the resort to include additional lodges and new facilities for visitors. Everything has planning permission and work is underway on site to have the new lodges in place before the end of 2019.
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Staycations have become big business since the Brexit referendum, with Deloittes forecasting that the UK tourism sector will rise from £137 billion in 2017 to £257 billion by 2022. In comparison, the entire private residential rental sector is expected to rise from £50 billion to £87 billion in the same timeframe.
The group behind this project has $27 billion under management and £13 billion of UK property investments. They have already acquired 8 sites including Cornwall, Devon, the Isle of Wight and Yorkshire. In addition, there is a pipeline of £250 million of further acquisitions.
There are 150 existing lodges at Retallack, while the first phase of the extension will add a further 143 lodges. 74 of these will be retained by the site operator and 69 are available to investors at prices starting as low as £199,950 with a 999 year lease. The lodges come with a full 10 year NHBC guarantee, just like a new-build brick and mortar house. Each lodge comes with its own parking space.
Acquire A Long Term Asset Where You Can Create Amazing Family Memories
The rental income is guaranteed at 7% of the purchase price for the first 3 years, after which you retain all the rental income after covering the rental and site fees. This means that, if you buy the lodge with a mortgage, your return on capital employed should increase each year as your rental yields increase and your mortgage interest declines. Rental income is paid quarterly in arrears.
You and your family can have two weeks usage in the first 3 year guarantee period, then as much or as little as you like from year 4 onwards. There’s no forced buy back from the developer so you can invest safe in the knowledge that you are acquiring a long term asset from which to create amazing family memories.
And you know what’s really cool about these lodges from a tax perspective? They qualify as Furnished Holiday Lets, which means Section 24 does not apply. Even if the lodge is owned in your own name, you can offset ALL your interest charges against your rental profits. And the lodge qualifies for Capital Allowances, which means a further circa 27% of the purchase price can be offset against rental profits in the early years. If you buy with a mortgage, this could mean that your proceeds are effectively tax free for the first 5 or 6 years.
Better still, if you decide to sell the lodge in the future, because HMRC treats it as a business, any capital gain will be subject to 10% Entrepreneur’s Relief rather than the 28% you’d pay on residential rental property.
Benefits of this investment:
- An operational resort with planning permission in place for the new lodges
- Receive 7% rental yield guaranteed for the first 3 years
- Enjoy 14 days of personal use in the first 3 years and unlimited use thereafter
- 999 year lease with full legal title.
- Mortgages of up to 65% available
- Qualifies as Furnished Holiday Let so no Section 24
- Capital allowances of around 27% further reduce your tax bill
- Great amenities including flow rider, wake park, sup boarding and double zorbs will be further enhanced with new shops and larger indoor pool
Facts And Figures
- 150 existing lodges, 143 to be added in Phase 1 of the extension
- Of the 69 lodges available for sale, 28 are already sold
- 2 bed lodges range from £199,950 to £275,000 depending on location
- 3 bed lodges range from £325,000 to £395,000 depending on location
- According to Deloittes, UK tourism is set to almost double from 2017 to 2022
- The company that owns the resort has a senior director of the US wealth management company as a director
- Full planning permission is in place for the new lodges, enhanced permission is being sought for further improvement of the facilities
- The company has rationalised staff numbers on site to reduce overheads and has brought in a new General Manager for the resort
- Inspection visits are possible before making an investment decision
- A solicitor handles the transaction for you with some of the fees covered by the developer
Risk Factors And Mitigation
- That the developer goes bust – the company is not reliant on lodge sales to fund the resort. Their American owners have deep pockets and are building up a portfolio of UK resorts with a view to an exit in around 10 years. Any change of operational ownership would not impact lodge owners who have a 999 year lease on their lodge.
- That tourists do not come to the park. This seems highly unlikely given the existing visitor numbers even with the minimal marketing of the former owners. Until last year only the website and word of mouth was used to attract visitors. Now the resort features on all the major portals such as Booking.com and both occupancy rates and average daily rental rates are starting to increase.
Get The Full Details on This Extraordinarily Rewarding Investment
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