Win a house competitions - Omaze etc..

[dowie]

I remember an early one of these, some bloke had a decent size house and fishing facilities/small holiday chalets in the back garden, worth approx £1 million so he raffled it, someone won.

Since then there have been loads of the things and in plenty of cases they're not necessarily run very well and no one wins the grand prize anyway, instead, a cash alternative is offered because the target isn't hit and the organiser pockets a 25% admin fee or something along those lines...

Omaze seem to be offering something different in that they both guarantee a prize and they promote their house draws along with a charity, the charity (usually a major one) promotes it on their social media pages and apparently gets 80% of the "net" proceeds... They've also solved the issue of having to allow for free entries, purchasing options involve multiple tickets whereas "free" entries involve a single entry and the cost of a stamp and post card make the free entry (on a per-entry basis) more expensive than simply buying your entries.

On one hand this seems like a much better prospect for people who might want to enter these house draw things, there actually is a guaranteed prize. Does make me wonder though, are they really just taking 20%?

Obvs they probably deduct the costs of administering the competition, and of course the cost of acquiring the house and the intermediary prizes (they give away flashy cars intermittently in draws for earlier ticket purchases) but do they get another source of revenue here?

The houses seem to be slightly ambitious in their valuation for example - the Fulham house they held a draw for a few months ago had a claimed valuation for £3 million but is currently on the market for £2.85 and might well get sold for less than that. The Devon house reportedly had a flooding issue...

I wonder if they get some sort of fee from the owner of the house? Are these houses that didn't sell initially on the open market? Do they actually buy the house themselves or do they do a deal with the owner.

I mean ostensibly you could go to some owner/developer of a £2-£3 million pound home that hasn't sold and do a deal where you'll either guarantee a price for them or give them a bracketed price (based on ticket sales) and take a commission out of their end too... then set that as part of your "costs" from which you then give the charity 80%?

I'm not knocking it per see, it seems like a neat competition, but I'd be interested if anyone knows how it works from that end?

 

[dowie]

Has anyone actually won any of the houses.

Yeah, they announce the winners on the site and film some video where they "surprise" them. not sure they've announced that latest one yet though.

That cotswold house was rinsed and rinsed about the flooding. I remember reading all the comments on Facebook omaze threads about the hope that they win but in reality most people couldn't afford the upkeep, council tax etc and so would sell up.

If you spent £100 winning it, the sold it even for £500k you're well up.

I dunno, they're not all that big, I don't think people realise that council tax doesn't go up very much. Certainly, the previous London one wasn't much different in size to a normal family home outside London. The bigger issue is perhaps that someone from say Manchester isn't necessarily going to want to move to London or Devon etc.. and so just wants the money.

If a prize was only worth 500k though then people would have a legit complaint as you're entering on the basis that it was worth (2 million or so IIRC?).

I wonder how the capital gains tax would be worked out on that? (and, come to think of it, how would the stamp duty be worked out when you win the house?)

They pay for the stamp duty, that will be one of the (variable) costs they have depending on whether the prize winner is already a homeowner.

Not sure about GCT, if you don't already have a home then it's a bit moot but if it is a second home and you can claim it's lost value then maybe you could use it to offset some gains from other investments.

 

[dowie]

I meant more in terms of selling it immediately. If you've paid £100 for your competition entry and win (I don't think there's any tax due at this point?) but then you immediately sell it, the value of the asset hasn't changed but you didn't pay the value of it. Have you made a gain for tax purposes when you sell it? I don't suppose you really care much anyway!

There is no GCT to be paid simply for winning the prize. CGT is applicable if it is not your primary residence and it appreciates in value.

 

[dowie]

No, I don't mean at the point you win but if you sell it soon after you've won.
You pay £100 for an entry.
You win a £500,000 house (and don't pay any tax when you receive it. You also own a house so this is a second property)
You sell the house for £500,000
Did you make a taxable gain?

Yeah so the price you paid for an entry isn't relevant, there is no GCT to pay on the prize!

What gain have you made if you sell if for what it is worth? You won something worth 500k, there is no CGT to pay on that prize, you sell that 500k asset for 500k - where is the gain in value?

 

[dowie]

The Devon house I thought was hideous. You would want to sell it straight away. All open plan with massive windows so you could see everything inside. Would not like to keep that clean. The advert for it was super smarmy too.

LOL that presenter woman! Yeah, she's irritating, comes across like a dodgy car salesperson/estate agent type.

I think it's kind of hidden though, there isn't anything overlooking it, it does seem like some of these houses were ones the owners struggled to sell, the Cotswolds one had some previous flooding issue mentioned in the press, I wonder if the design for the Devon one is a bit too marmite in terms of design or the proximity to the campsite put people off or maybe proximity to cliffs and trouble getting insurance or something?

I've not entered it (or any of them for that matter) tempted by the Wimbledon one mind. I suspect that if you did want to cash in by selling immediately you'd likely need to take a bit of a hit on the claimed valuation.

One good option with the Devon house, unlike London, is the rental potential - London yields are rather poor but that Devon house could get you £8000 a week as a holiday let. Say you rented it for 30 weeks of the year that's £240k gross, you could easily pay someone local to clean it, hand over to new guests etc.. not a bad income stream if you didn't want to immediately sell.

 

[dowie]

This one is aiming for 500k but house is valued at 350. As he plans to pay 10% to charity if the full amount is reached (doubt it will happen in time as 1/7 is cut off) he would trouser 100k more than his home is worth. Seems a great scheme to get a wedge IF all tickets sold
https://fundraising.co.uk/2021/06/24/nhs-worker-raffles-his-house-for-nhs-charity/

Yeah those types of competitions often fail unfortunately, could well miss the target despite this "NHS worker" (manager) trying to that angle...

I don't understand why these have recently become a 'thing' - raffles for houses, cars, even rubbish like raffling off luxury pamper hampers on Facebook with people seemingly queuing up for tickets... Can anyone explain?

The house thing started quite a few years ago when there was a downturn in the property market and some family decided they'd raffle their house to make sure they got what they believed it was worth... it's less of a novelty now though I think Omaze have cracked it - serious prizes + they take a risk and spend heavily on advertising and promotion + they get the charities (often major brands) involved in marketing it. Some of the other competitions are a bit hit and miss and can be quite amateurish.

I entered one of Omaze's raffles when the charity was one I supported (RNLI IIRC). I viewed it as giving 80% to the charity and 20% to the chance of winning whatever it was.

That's a bit of a misconception, your ticket purchase is nowhere near giving 80% to the charity, it's more like 20% the the charity and 80% to the chance of winning the house... it's a % of the proceeds that are given to the charity, i.e. after the cost of the house, the other prizes and the marketing has been taken away.

You also see this a bit on social media - you get some posts where people think the charity owns the house or something and are questioning why they don't just sell it and use the money for the charity, or other posts confused about the draw date because they have a prominent countdown for the chance to win the next car or whatever they're giving away too.

I guess that is part of the marketing, it's a tiny portion of sales going to the charity but if people view it as a charity donation with a prize attached then that helps.

 

[dowie]

£25 for 40 tickets. I can imagine quite a few considerably richer people are throwing a few £1000s to buy up all the tickets. The chances of you winning on about 40 tickets must be minute.

Quite possibly though I guess that’s the same with anything like this, lotteries etc.. This probably has better odds though as more of the ticket price likely goes towards the prize than with state lotteries etc.. It’s still -EV but less so.

 

[dowie]

No misconception: the Ts & Cs explicitly stated it. It might not apply to their other competitions, of course. I only entered the one so don't know about others.

Definitely a misconception, I already explained why in the previous post too, how do you think the house is paid for? Or the advertising and all the other prizes and just the admin costs for running the thing?

thought it was 80% of their net? Hence 80% of the extra kidney they raised after paying for their house and their costs? So on a £500k house with let’s say £50k “surplus”, after they have deducted stamp duty, legal fees, advertising costs, admin etc there might be 80% of only £10k going to the charity so only 1.2% of your ticket cost

It's not quite that brutal, they raised circa £1 million for the BHF with a previous London house draw for example.

That house was valued at £3 million, but there are marketing costs, other small cash prizes, cars and Omaze takes their 20% profit too.

All in they might have sold say £5 million in tickets... ergo the charity ends up with say around 20% of the ticket sales...

 

[dowie]

Sorry, no. As I said, I checked.

In this case I believe the house was a gift, but it was so long ago that I cannot be sure.

Sorry but you're definitely mistaken, perhaps you didn't understand what you were reading, this is a for-profit company, no one has gifted them a house!

edit - they only started offering these last year so I'm not sure what you're on about re: it being so long ago and none of the draws supported the RNLI as you claimed either - you're definitely getting very muddled here.

 

[dowie]

Don't be silly: the house was gifted (IIRC) to the charity and Omaze handled the raffle.

You're just lying now - when did this happen? What year? Where was the house located?

 

[dowie]

Nope. Now swallow your pride, recognise that you do not have perfect information, and refrain from responding.

Sorry but this is silly, you're just wrong here. Omaze UK started offering houses in competitions in 2020 they've had 3 completed competitions so far:

The Cheshire House - supporting the Teenage Cancer Trust
The London House - supporting the BHF
The Cotswolds house - supporting the Princes Trust

You're getting confused by "net" proceeds.
http://web.archive.org/web/20200529153754/omaze.co.uk


There was no RNLI competition, you've forgotten which charity it is and you're just getting muddled re: the T&Cs which talk about the donation to charity.... it's not 80% of your ticket price going to charity, it's 80% of the net proceeds of the draw.

 

[dowie]

And what Omaze failed to declare about the Cotswold House is that it was built in a valley that floods yearly & is un-insurable because of it & techically the grounds can't be used as a garden because they're still registered as Agricultural lands, requiring planning to change it.

A £25 ticket is likely to leave them with a massive pile of bills later down the line.

https://metro.co.uk/2021/06/23/oxfo...0-new-home-won-in-omaze-draw-floods-14818807/

Yeah, I did mention that earlier (I think I typed Devon house instead of Cotswold House), didn't realise it was uninsurable too though... will be interesting if there is another news story from the new owners - that would be something Omaze might want to avoid! You'd think the neighbouring houses would be kicking up more of a stink in that case and getting the council to fix it - issue there seems to be a culvert that gets blocked and isn't really big enough - it's only a stream/rainfall causing it, not like it's next to a river or something ergo should be fixable.

I do wonder if the neighbours are rather anti the fact it had been built in general - seems a bit sus re: the original developer if most of the "garden" is agricultural land, like they've got planning to build where an old barn once was but not for a garden LOL.

That's what concerns me about these, none of them (save for perhaps the latest one) would be homes I'd necessarily want to buy if I had a spare few million and was looking for one, even the latest one which does seem nice is the lowest price option of the 4 homes developed at the same time. They certainly don't seem to have been "donated" to the charities as the poster further up seems to have claimed, though he seems a bit confused, Omaze is the one running the draws the charities just lend their name in return for a guaranteed donation/profit split, more likely Omaze approaches the owners of the houses after they're unable to sell.

Anyway, I decided to have a go and entered the Wimbledon one as there was a 2 for 1 offer that included a draw for the Devon one too - that would annoy me a bit if I'd bought some tickets already without an offer, depending on how many tickets of different categories have been sold the 2 for 1 tickets could be +EV even.

 

[dowie]

Again, no.

I am well aware of the difference, I checked, and this was the only raffle of theirs I have entered.

They stated last year and there have only been 3 competitions completed so far: Cheshire, London and the Cotswolds - which did you enter?

You're simply mistaken, this is easily checked by looking at web archive - for all of them they donate 80% of the net proceeds.

 

[dowie]

New house just dropped, same deal as all the other draws, Omaze get 20% of net proceeds:

https://omaze.co.uk/pages/ascot

This one looks likes perhaps the nicest one so far, bit bigger than the Wimbledon one even as it's just outside London.

What is a bit annoying is that previously there was some quadruple ticket entry thing for the previous two, I bought some tickets using a special double tickets offer... like so long as a significant number of entrants pay the regular price then getting double the tickets should be technically +EV. The "free" entries cost more than purchasing when you look at the cost of a stamp + postcard.

There seems to be a triple entry offer - this new house + Devon + Wimbledon might be worth a punt. Also, I saw that there are two US houses on their US site you can enter (including free entry online!) and they seem to have another competition for a trip into space too.

 

[dowie]

Probably worse odds than winning a significant prize in the lottery right?

Lottery.. Lots of semi decent prizes.
Omaze.. 1 or 2 mega prizes. Then nothing.

The EV is better here than the lottery, especially if buying tickets with a promotion, of course, there are more smaller prizes with the lottery, with Omaze you have the main house then there are some additional smaller prizes of cars etc..

Well blow me down. I grew up around there, but not in a house as grand as that! That house even looks vaguely familiar. It reminds me of the Institute of Building, but is obviously smaller. Judging by the floorplans, with such large rooms it may well not a recently-built copy of an old building but rather a fully renovated old building, though the lack of a basement and dining room makes me doubt it. But I left the area in the 80s so I could be completely wrong.

Could be refurbished or a conversion I guess? Looking at the plans there is a basement, though it's not clear if it is entered from the outside. Perhaps it is semi-detached or somehow the wing of a bigger property? Don't have an address for it yet to take a look.

Also. At least with the lottery the odds of wining 6 numbers is fixed.

With these raffles it could be 1 in 100k or 1 in 10 million. You have no idea.

You get a rough idea - basically, they take 20% of net proceeds and charity takes 80%, there is the cost of some additional prizes on top too + promotional costs. They're estimating they'll raise 500k for the charity thus 125k profit for themselves add in the 3.5 million cost of the house and that comes to 4.125 million they'd be selling in tickets, but then you need to add on the cost of a few cars and advertising costs, costs for the 3rd party that conducts the draw etc.. could be more like 4.5 million or maybe even a bit more, like 5 million or so in ticket sales... for a prize worth 3.5 million.

It's still likely the prize that takes up the bulk of the ticket sales, unlike the lottery.

 

[dowie]

No blinds on it either. I seem to recall reading it would need £10,000 just spent on blinds.

Why, is someone going to tell you you must only fit expensive blinds costing £10,000 or something?

"You have no right to buy those cheaper blinds or curtains for the bedrooms in a designer house like this!"

Anyway, it's nonsense, looks like there are already curtains and blinds fitted in the bedrooms, on the other hand if someone wants to pointlessly fit some ridiculously massive blinds to the double-height living room then that would look rather silly! The house is quite well hidden, not overlooked.

Master bedroom with curtains:


Bedroom below it with curtains:


Bedroom on the other side with blind fitted:

I dunno, looks like you have to drive through the static caravan park next door and put up with the noise from the beach that it uses.
https://goo.gl/maps/gZfavqFfM9XARUaw6

Nah, separate entrance, stick the little google guy on the road and you'll see this entrance:



And if you look closely at the map you can see the driveway/road slightly obscured by trees (blue dashed line below). It does look like it might be crossed by people from the caravan park in order to access the dog walking field (red dashed line below), but there is a gate at the end of it before you get to the house itself.

It was nicknamed the "stealth house" when built so it seems to mostly be out of sight, as for the beach, there is quite a big drop down those cliffs, I doubt people on the beach below will be too much of an issue.

 

[dowie]

Tbh I doubt anyone who wins these houses would actually live in them. They'll all get sold, probably for a fair bit less than what Omaze values them at.

Probs best off renting out the Devon one if you won it, the yield on holiday lets at the moment is likely going to be pretty sweet, especially for a high-end place like that which was already renting for like 8k a week pre-Covid!

 

[dowie]

This is the article I read, but it's dated 2019: https://www.ribaj.com/buildings/ste...devon-guy-greenfield-architects-eleanor-young

Ah, so that was back when it was on the open market, unfurnished and before Omaze got hold of it and filled it with furniture and fittings. Clearly, a £10k "blind system" isn't required though given they've gone and put curtains in at least two of the bedrooms.

The deal with most of these houses is that they spend a decent 5 figure sum on furniture to kit them out too, maybe minus one or two bedrooms that they don't show on their pictures. The Wimbledon house has some fancy exercise bike and rowing machine worth a fair bit too.

They also throw in circa 20k for the first year of running costs. I'd certainly not be complaining if I won it, should be able to make 200k or so per year off the thing at least, even after employing a local housekeeper to sort it out between guests.

 

[dowie]

Anyway, I've been looking at Google Earth and havn't spotted it anywhere near the areas I used to know. It's the sort of house that would be on Prince Albert Drive or Prince Consort Drive but I've not spotted it. I used to gain access to the woods from the ends of those. Great fun for a youngster.

Got the location:

SL5 7EG on google maps

Queen's Hill, private road.

As suspected it is part of a bigger building, I think it roughly encompasses the bit I've outlined in blue, not too sure about how much of the garden to the right-hand side it has, it definitely has the garden to the south and a triple garage at the bottom. Not sure how the garage works, the rear of it opens to the bit behind the gate on the video below but the plans seem to show triple garage doors to the south - maybe there is some shared driveway bit with the house in green somehow? The main building seems to be split among two further properties which seem to share a driveway to the north, they're presumably split as per the red and yellow below:

[edit, got map drawing completely wrong]

Video available here:

https://vimeo.com/442961940

Interestingly it sold for 1.5 million in 2014 (after listing for more like 1.75 million), it was last listed on Rightmove in March this year and I guess pulled when Omaze got involved, not sure how much it was listed for... I guess if you win and it's a second home... then selling at below 3.5 million gives you a six-figure GCT writeoff for the next 4 years!

https://www.rightmove.co.uk/house-p...l?prop=97246982&sale=74504736&country=england

 

[dowie]

Just had a look again, seems I got the map wrong, it looks like there are three other properties created from the main building on that development, dunno what the deal is with the other buildings to the north etc.. seems to be a mix of garages and possibly another house or two:

The others are a bit smaller and the one highlighted in red seems to have a bit of an odd set up with a garden on the opposite side of the road!

the one circled in red below:
https://www.rightmove.co.uk/house-p...l?prop=22695507&sale=74504733&country=england

The one circled in orange below:

https://www.rightmove.co.uk/house-p...l?prop=21840170&sale=74504712&country=england

The blue outline is the prize I think, the triple garage seems to be at the far south of the plot: