Time and time again, when I tell people what I do, it’s not long before I hear the words “oooh, I’d love a beach hut. But I just can’t afford it”. Beach Huts are renowned as being expensive after all. However, if you can’t get that beach hut dream out of your head, you will inevitably need to work out how to finance your beach hut purchase.
It’s very likely that you’ll be buying a beach hut from a current owner and need to pay them directly to purchase outright. You are going to need the funds in place to buy the beach hut plus any immediate transfer of ownership fees and maintenance along with the yearly licence fees and upkeep costs. Whilst the price will be driven by the beach huts location, regardless of where you are buying, this is unlikely to be a small amount of money.
So what are your options when financing a beach hut purchase? Whilst everyone’s financial commitments and preferences can be different, here are a few ideas to get you one step closer to buying a beach hut.
Raid your savings/bonds/ISAs
I suspect this is the most common method of financing a beach hut purchase and one that I’ve used so far for all of my own beach hut purchases.
I’m afraid it won’t make the decision any easier and you’ll still find yourself weighing up the pros and cons – I personally found myself questioning why I wasn’t paying off more of my mortgage versus buying a beach hut! But well, I do love the beach and wanted a place to de-stress – this was one of my biggest factors in buying one and I justified by thinking about holiday costs I’d save!
Do trust your gut and ensure you have emergency savings left over for that rainy day!
Secure a Loan
A personal loan may be a good source of finance to enable you to buy your dream beach hut. You can typically borrow between £1,000 and £25,000 without securing
You can typically borrow between £1,000 and £25,000 without securing against your home or any other asset. You can choose differing terms from 12 months to 5 years and with APRs on personal loans steadily falling, it is worth hunting around and making sure you get the best deal.
I’d never recommend assuming that your beach hut will increase in value. When some huts are fetching high prices, they can fluctuate and there are several factors that impact the price of a beach hut.
Maybe your mum has always dreamt of a place by the sea, or your daughter or a good friend? Whilst I recognise the feeling and need to call a beach hut your own – how often will you both want to be camped out in the beach hut with lots of other people?
Do think about whether you would be happy to use your beach hut on the same day and enjoy each others company. I’d recommend thinking about who you would naturally invite to your own beach hut for the day for ideas.
If you do pursue this route, have an honest talk upfront about how long both parties are looking to own the beach hut, including how you will share and make decisions about maintenance costs to avoid any issues post purchase.
You may need to negotiate on decor, colours and contents but well half of a beach hut and several days of your own use, isn’t that better than no beach hut at all?
Ask Friends and Family
A controversial source of funding for some and one which you do really need to think carefully about. Can you afford to repay the money and what would happen if you can’t afford to pay it back ?
You may avoid paying interest rates and when it works out – this is a great source of finance. However, you do need to be certain that if you are unable to repay, it will not harm your relationship. Work out your budget and be sure that you have clear agreements on repayment terms.
Do remember that whatever option you choose, you will need ongoing finance for licence fees, insurance and general maintenance and repair. You may want to read more about those costs on my previous blog and some do’s and don’ts when buying your first beach hut.
How are you planning to finance your beach hut purchase?
Only you and your financial advisor, family, accountant, etc. can answer the “should I buy a beach hut?” question because there are many lots of factors to take into account. I do hope this has given you some ideas re how to finance your beach hut purchase – I really wouldn’t be without one!
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