Glamping & Camping Pods: Should you invest?
Camping pods and glamping have caught on quickly, but should you invest in them?
Originating right here in the UK, camping pods are relatively new but have increased in popularity over the past decade.
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They provide a far more comfortable experience than the traditional route of ‘roughing it’ in the wild. You may have even seen one before – those curved, wooden structures similar to a tiny cabin, usually dome-shaped, that provide the comfort of a hotel room whilst still surrounded by nature. Campers and holiday-goers alike can enjoy the freedom of the great outdoors without the risk of wild animals, creepy-crawlies or leaking tents.
With the rising cost of living, the Bank of England rate increasing, along with an expected rise in EPC band ratings required by 2025 – both landlords and tenants are no doubt thinking of ways to cut down their costs. But could investing in short term lets be a smart financial step?
What is glamping?
As well as camping pods, there’s a glamorous form of camping known as ‘glamping’. Glamping quickly caught on, as yurts, teepees, treehouses, and even shepherd huts sprung up across the country.
Holiday lets have enjoyed a boom in recent years, as holidaymakers continue to look for unique and convenient ways to holiday at home. The effects of the pandemic are still being felt and while foreign travel is easier now, people are looking to holiday closer to home, so short-term lets are continuing to enjoy their popularity.
What are the pros and cons of investing in camping pods?
Many property owners who have some land are increasingly realising the benefits of installing glamping pods on their property. So why should you invest?
- Additional income. Whether it’s rolling hills or close to sea, owning land in a scenic area of the country can be a great plus. Installing a camping pod could be a great way to maximise income throughout the year
- Low costs. Apart from being lower maintenance than a traditional buy-to-let, camping pods have a much lower start-up cost. According to The Camping Pods UK, the cheapest pod in the UK starts at £3,000 with average pricing falling anywhere between £4,500-£7,000.
There are some pitfalls of course, so keep in mind there are always cons you will have to consider if investing in a short term let.
Don’t get carried away. If you are investing in your community, that’s great, but be aware that earlier this year (January 2022) the government announced a consultation for plans that will introduce a national register in the UK for holiday lets. This will examine their effect on the local housing supply and determine whether greater compliance is needed with health and safety regulations.
Additional income by maximising the income of land you already own
Potential danger to the livelihood of the local community
Low maintenance as they are smaller and there is less to maintain
Higher tenant turnover, so more risk of damage
Low costs, much cheaper investment than a buy-to-let
Short term renters can be hard to find, especially in the off-season
Lower risk of long-term issues with tenants
Licence required, as well as knowledge of short-term specific regulationsLicence required, as well as knowledge of short-term specific regulations
So, should I start investing in camping pods?
For starters, make sure you’re budgeting your expenses with our free Expense Tracker, which can help you save towards an glamping investment.
On the whole, camping pods are never going to be the strong long-term investment that traditional rentals are. They won’t increase in value and you won’t see a year round return on investment from them, as people tend to camp less in the colder months. So it depends on what you plan to achieve.
- Adding to your retirement fund. A buy-to-let is a wiser investment here, as you can either choose to sell the property when you retire for a lump sum bonus in your pension pot, or use the additional income from your rental to supplement your pension each month
- Using land. If you have land in a prime holiday location, that is currently going unused, then investing in creating a glamping site is a good idea as that space will start making a profit for you, which will boost your income
- Passive additional income. There isn’t anything passive about the landlord life, as you have to keep on top of everything from Gas Safety Certificates to EICRs, as well as responding when your tenant has a problem. However, long-term rentals are less work than short-term rentals, as you won’t be constantly looking for new tenants and tidying up after the outgoing ones
It’s also worth bearing in mind that you won’t be able to use insurances like Rent Guarantee Insurance or Home Emergency Insurance to cover your glamping investments. You would have to do some research to find appropriate insurances.
Ideally, camping pods and glamping setups would be an addition to your portfolio, maximising the income of land you already own.