buying a caravan to sub let?

phoebe03cat

Pls move if not in the right place. We have just come back from a week at Havens and are very tempted to buy a caravan. Has anyone on here done this to sub let through Havens and got any first hand experiences pls? Does this provide an income which even starts to make a dent in the outgoings is the prime question of course.Thanks for any help.

jimmo

I’ve never done that myself but I have been involved with the tax consequences.
I don’t ever remember dealing with a Havens case specifically but in my days as a taxman the usual problems were:
1) The caravans are “static” which means that the only way of moving them is on a low loader.
2) You can only buy the caravan from or through the site owners.
3) There are site rules which dictate that only caravans below a set age are allowed on the site. Once your caravan reaches the set age you must remove it.
4) In practical terms your only option will be to part exchange for a brand new one, again from or through the site owners.
5) The most common form of finance for the new caravan is finance arranged for you by the site owners.
To be fair, I imagine that some people do make profits but the nature of my work meant that I only ever saw the cases where the people made losses and tried to claim tax relief on their losses. We turned the lot down on the basis that the rules outlined above meant that it was virtually impossible to clear the outstanding finance and ever make a profit.
I don‘t know whether Havens‘ rules are similar to what I have described or not but as a personal opinion I think that if you love caravanning this may be an opportunity to subsidise your holiday costs a little but as an investment, I don’t think so. .

Buttercup.x

We had done this and the site fees now are 3K + so you need to be sure you could make this in bookings

we were also with haven

Poppycat

I knew some on who did this and they lost money on it. You can make money on a good season I suppose or like using the caravan a lot

Debt_Free_Dreamer

We went to Haven at the beginning of the year and were very tempted as the caravans looked very nice. However, consider this. You are actually buying a depreciating asset. The caravan (like a car) will decrease in value every year until it is worthless.

When you are calculating the potential income and expenditure. Remember to include the inital outlay to buy the caravan, which will eventually have a scap value only. (depending upon when you decide to sell/upgrade)

cathij0269

We have just bought a static caravan through Parkdean. They did say very clearly that we shouldn't see it as an monitary investment but an "investment in our leisure time". We paid 20K for the caravan and must pay £3800 a year for site fees, also must pay for gas and electricity,(don't yet know how much), caravan insurance (245 pa sorted out privately, including public liabilty insurance) and any maintenance costs (i.e. annual gas and electric inspections, draining down water systems etc during out of season). We are only guaranteed to have our pitch for 10 years, after which we must either remove the caravan, use it to upgrade or sell it privately or to the site (for a very small sum i'm imaging).
It was a very big decision but we went with it because we have 4 kids and will make full personal use of it but we worked out with 20k + 38k (site fees) + maintenance it would cost us around 6k a year for 10 years, we are hoping to rent it out privately for about just 5 weeks in the summer just to cover 1/2 of the ground rent, you need to make sure that any rent you gain covers the total annual cost including depreciation of the value of the van, and don't forget that the site will charge a percentage of any rent if you go through them. Most sites have their own caravans and will rent these out first. The main holiday season is only about 6 months long (apr-sept) a mean average of £350 per week rental for these 6 months will make around 8k a year. If you take off any ground rental, utilities, mainenance, insurance and site percentages you would probably clear about 1-2k which you would have to declare to the taxman. If you rent privately you would save the percentage but would need to arrange your own advertising and rental agreements and any renters will need to arrange their own entertainment passes (haven aren't cheap for these), you will also need to clean and maintain vans before and after each rental yourself (so include costs of petrol to and from the site).
Not sure I would have bought a caravan just to rent out - too much hassle for little profit. Our caravan is only 1/2 hour from us so we can use it most weekends and in the summer my husband can even commute to work allowing me to stay at the site by the beach and facilities all holidays. But if you aren't able to use it regularly, I would advise against it. I worked out that if I rented a caravan at the site every week for 9 months of the year it would cost 9K, so only using it for 3 months in total you would be better off taking just the 3K ground rent you would have paid and renting a caravan, saving yourself the cost and hassles of buying one. Hope this helps, good luck

charlie555

phoebe03cat wrote: »

Pls move if not in the right place. We have just come back from a week at Havens and are very tempted to buy a caravan. Has anyone on here done this to sub let through Havens and got any first hand experiences pls? Does this provide an income which even starts to make a dent in the outgoings is the prime question of course.Thanks for any help.

Don't do it. As other have said it's a depreciating asset, site fees are high and will get higher, income is uncertain, it's work and hassle and you could get a better return on your money elsewhere.

If you are still tempted, wait for 6 months. If it really is a good deal now it will still be a good deal in 6 month time. But in the cold light of day you will realise it would be a mistake.

Put the money into something else - building society or unit trust for example. And if you were thinking of borrowing the money to buy a caravan, take a cold shower.