Motorholmes Motorhome Invest Scheme was discussed with Andrew Hughes at the Property Investor Show 2011:
Vanessa: Something a little bit different from the Property Investor Show 2011 now and I am joined by Andrew Hughes the founder of Motorholme, so welcome Andrew.
Andrew: Thank you.
Vanessa: Well something very interesting going on here, you are offering something a little bit different to investors with motorholmes. Could you tell us about your product?
Andrew: Yes absolutely. What we are looking for is people to lend us money and for us to acquire more motorhomes for our own fleet. What we are offering in return for that is a 10.2% annual return guaranteed over the next three years.
Vanessa: Fantastic. So what sort of sums of money are we talking about to get involved in this?
Andrew: Well in order to protect the security we need a minimum investment of £35,000 and that is basically what we need in order to go and buy a motorhome to put out for hire.
Vanessa: What sort of risk is there to investor that gets involved in this scheme because you basically take care of everything do not you? The insurance, looking after the van, keeping it maintained, so it sounds relatively low risk?
Andrew: Yeah absolutely. We worked very hard to structure the loan agreement so there was a security involved and basically what we came up with was the motorhome itself is the security. In the event that were not able to honour any of the payments that we agreed to make or do not repay the entire capital investment at the end of the three years then the investor has first charge over the motorhome we bought with the money in the first place.
Vanessa: So that sounds very safe.
Andrew: Yeah absolutely and do not forget that this sort of vehicle would retail for more like £49,000 if you were to buy it, but because obviously we are in the trade we are effectively buying them at the same price that a dealer is and therefore the investor is in at that level.
Vanessa: Okay so we are just going to send the camera now just to go have a little look inside, but we will carry on talking because myself and Nick are actually into holiday lets and this is a burgeoning area of investment in UK property because of the recession people are choosing to holiday at home. Is that what you are seeing with the motorhome industry as well?
Andrew: Oh absolutely. I mean we are looking at probably a year on year increase in enquiries of well over 20%, 30% every year since we have started and we have been going for ten years so there is no problem with demand. On any typical day in the summer we can be looking at 650 – 700 enquiries per day to rent a motorhome so that is why we are here basically because we need more motorhomes to meet the demand. Bearing in mind the next three years are even without the generic growth, the events that are coming up such as the Olympics, the UEFA Finals and the Commonwealth Games are all huge drivers for more utilisation of motorhomes at what is traditionally a busy time anyway, August and June are out busiest time. So we are very confident that we will be able to get the utilisation for the rentals.
Vanessa: And there is only a hundred places on the invest scheme is that right?
Andrew: There was and we launched this in June and so far we have recruited 25 investors or lenders, however you want to call them and we are looking for a few more now for a new depot, which is opening at Heathrow.
Vanessa: Okay so what sort of response have you had from people at the show here? I know it is only the second day, but have property investors been interested?
Andrew: Oh absolutely. I think that anyone who is looking for quite a low cost high return with a relatively low risk would do well to come visit us on our stand and it has been borne out by the number of people asking to see the actual legal agreements not just our brochures, but the legal agreements, which I think is an indication that they are very interested.
Vanessa: I do think it is an attractive proposition because with deposits for properties being so much higher now and the mortgage market being so restricted, a lot of people do have £35K odd sitting around in a bank account getting no interest whatsoever and being eroded by tax and inflation and yet what you are offering is a much better return than what you can get in a bank and also a tangible asset.
Andrew: That is right. As you say you are at the end of the day having a debenture over a motorhome that you could very easily sell through an auction or privately if we were to go out of business. It does make sense, the way we structured it does make sense for everybody and as we say we’re very surprised with the take up already and we expect to fill those slots probably between now and April, which is our cut off anyway.
Vanessa: Brilliant. Okay so if I was to invest in the scheme, would I actually have any use of the motorhome myself?
Andrew: Well that is our sweetener at the end of the day, we do offer a three weeks worth of cost free holidays in any of the motorhomes in our fleet so it is not the van that necessary is your security, but one of over vehicles you can choose from. The only caveat with that is that you have to pay the insurance, which is typically about £25 a day and you can only take the holiday period outside of the peak season, which is June through to August you could not have the van, but any other time. There is also a sweetener if you like of three weeks worth of holidays, and you know it is a very popular holiday option these days is to go motorhoming in the UK.
Vanessa: Well obviously I think people watching this know that Nick and I are very very keen motorhomers and we love the flexibility of it and the lifestyle aspect of it as well, just being able to take off. It gives you so much freedom does not it?
Andrew: Absolutely. I am a motorhomer myself obviously and have been for the past ten years. Less so now than when I first started out to be honest, but it is a very good holiday and if you have never tried it before it is definitely something I would recommend.
Vanessa: Well thank you very much for talking to us Andrew.
Find out more about Motorholmes Motorhome Invest Scheme by calling 0800 612 8719, anytime.
Topics: Motorhome Depot Locations, Motorhome Investment Plan, Motorhome Owner Rental, Motorhome Tour Ideas 2012, Motorhome Business 2012, Golden Age of Motorhomes, The Motorhome Business, Motorhome Invest Scheme, Motorhome Hire
