CLC Country Homes-Cornwall

Hi all

Has anyone any experience with a company called CLC Country Homes. They've been advertising their new resort lodges in Cornwall and offer 10 year 6% rental guarantees and two weeks use by owners per year. Properties start from Stg. 400K. Seems fairly decent investment and prices in Cornwall increased fairly well (even by British standards) over the past couple of years.

Thanks!

Larrymo

I visited their development in Trenthyon Manor (Cornwall) with a serious intention to invest, but decided against it for the following reasons:
Companies owned by CLC :
1) were selling the Lodges to yhe investors
1) own the hotel on site and the grounds surrounding the Lodges.
2) are the Ground Landlord for the lodges
3) are the only marketing source for tenants for your lodge.
4) are the operators of the resort
5) pay you the rent

Some or all of these companies are registered offshore.

As a lodge owner, you will be responsible for paying an annual service charge. There is no guarantee from CLC on the future level of that charge. If CLC decide to invest in improved facilities on-site in their resort, you may be required to pay a capital contribution to the cost.
The contract obliges you to replace all broken or damaged furniture including TVs etc.
CLC do not absolutely guarantee the rental income for 10 years - they have a get-out at yr 5 & 8 and you will only get the full 6% gross if certain conditions are met.

Finally, I checked out prices of similar stand-alone properties nearby and found them to be between £30,000 and £100,000 cheaper.

as a rough rule of thumb rental guarantees equate to price inflation. you pay above market for the property and the developer pays you back this cash as the rental guarantee.

in addition, 6% gross yield is not good enough when UK base rates are 4.5% and you can get 5% on deposit with any number of internet banks (I have made this point repeatedly on this site by the way).

use www.rightmove.co.uk to price up similar properties in the area

Don't know if it really affects your situation but have heard in relation to German appartments that some rental guarantees are provided by a different company that the one that is selling (who may be a well know Estate Agency). They will endeavour to rent out the appartments but if they can't do it they simply go bust so the rental guarantee is useless. I would check who is actually giving the guarantee but i do feel like Johnboy that you are usually paying for this guarantee in an inflated price.

Hi larrymo - sorry to be always the property bear. for what it is worth buying overseas with an outfit that guarantees rental return etc can seem like a nice easy solution but you often end up paying an inflated price for the property.

if you are serious about buying in the UK (or anywhere for that matter) you need to spend some time in your target area and talk to a lot of agents in order to understand how the local market works and what the prospects for renting out the property actually are.

for what it is worth, i do know one guy active in the UK residential property market and he is looking at secondary towns such as Hull. He favours HMOs (Homes of Multiple Occupants i think) - essentially houses that a clever builder has managed to squeeze extra bedrooms into - appearently the yields are quite good though i would imagine that managing an increased number renters can be a bit of a pain.