Buying a Caravan ? Wise investment?

Adly812

I'm thinking of buying a caravan and then renting it out to families on holiday. Or any one who needs an affordable stay and accommodation.
Do you think this is a wise investment? What considerations apart from site fees should I know about?

elsien

Have you taken into account the costs associated with getting it cleaned and ready for the next lot of guests each changeover?
Plus the depreciation and any site rules about replacing static caravans when they reach a certain age?
Insurance etc?

lincroft1710

Investment means putting money somewhere so that it will increase.

Investment and caravan are not words which go together well

Hoploz

I can tell you my experience - We considered buying a caravan on a site, in our case primarily for our own use, but there's always the option of letting so it seemed a good idea.

However we found the site fees were about £4000 per year and the caravan itself was about £20k.

With the same money we bought a really nice flat in a great location in the same town. The cost of a caravan (not mortgageable I believe) paid the deposit and the mortgage on the flat is pretty much the same as the caravan site fees.

In the 5 years since we bought it our flat has increased in value by approx £60k. The caravan would be worth a lot less than we'd have paid for it. Add to this the interest if a loan had been used to buy it. After 10 years it's virtually worthless as the site doesn't allow anything that old.

We could still do holiday lets but of course it's a little more complex than just handing over the keys on a site. When we needed to raise some ££ (when we moved house) we rented it out for a year on a standard tenancy agreement. Obvs there are tax implications which may well be different for a holiday caravan, I've no idea. But on the face of it, for us, the maths made it a no-brainer.

Adly812

Thanks for these wise words of advice. Definitely will now contemplate it further. I haven't got enough money for a deposit of a property, but just searching for something to invest in.... Money does nothing in a bank, so looking to do something that sees a return?

TBagpuss

What other investments do you currently have?

Bank account of property are the only options - what about things such as a S&S ISA and/or unit trusts, both of which allow you to invest in a range of assets. You can pick property based funds if you want.

A caravan is a depreciating assets - it will be worth less every year you own it, and you will have ongoing costs such as site fees, plus (unless it is close enough to do yourself) cleaning and handovers if you let it out.

eddddy

Smb3088 wrote: »

Money does nothing in a bank, so looking to do something that sees a return?

FWIW, I know somebody who's been saying that for many years. So he keeps investing in 'projects' in order to earn a better return.

And each 'project' loses a few hundred or a few thousand. He would have lost much less, if he'd just put his money in the bank.

mum2one

There are so many aspects to this, it's an eye opener,

Cost of van... anything gd - 20k plus
Ground rent 3k to 10k
Insurance
Gas / elec/ water - some sites include in site fee others don't
Length of site lease... some sites only allow cabs up to 10 yes
Cost of cleaning
Advertising
Wear and tear

At the end of 10 yrs... your 20k van... if your lucky get £500.

We've looked into a couple of times, 1st time site was 200 miles away, great when dd was a baby, but school time did we really want to get there 10pm Friday ngt, leave Sunday afternoon.

2nd though.. 70 miles away... that was a serious look then we looked into out falls etc...

Gave up and just rent off other owners x

Nebulous2

This recent thread may well be of interest.

https://forums.moneysavingexpert.com/discussion/5624118

iammumtoone

Hoploz wrote: »

I can tell you my experience - We considered buying a caravan on a site, in our case primarily for our own use, but there's always the option of letting so it seemed a good idea.

However we found the site fees were about £4000 per year and the caravan itself was about £20k.

With the same money we bought a really nice flat in a great location in the same town. The cost of a caravan (not mortgageable I believe) paid the deposit and the mortgage on the flat is pretty much the same as the caravan site fees.

In the 5 years since we bought it our flat has increased in value by approx £60k. The caravan would be worth a lot less than we'd have paid for it. Add to this the interest if a loan had been used to buy it. After 10 years it's virtually worthless as the site doesn't allow anything that old.

We could still do holiday lets but of course it's a little more complex than just handing over the keys on a site. When we needed to raise some ££ (when we moved house) we rented it out for a year on a standard tenancy agreement. Obvs there are tax implications which may well be different for a holiday caravan, I've no idea. But on the face of it, for us, the maths made it a no-brainer.

On the financial side of things you are right house every time and as it appears this is the best advise for the OP as they are looking at an investment.

However to even things out for others reading these are two very different markets. I can't afford a caravan but if I could I would pick one over a house as it is caravan holidays we enjoy. You pay for the on-site entertainment which is what most people pick a caravan for over a holiday let.

I know someone who owns one, they hire it out they don't make any money as such, What it does do however is provide them and their family with 'free' holidays it is local and they stay in it whenever it is not booked out plus they reserve some high season weeks for themselves. They are very happy with this arrangement.

AnotherJoe

Smb3088 wrote: »

I'm thinking of buying a caravan and then renting it out to families on holiday. Or any one who needs an affordable stay and accommodation.
Do you think this is a wise investment? What considerations apart from site fees should I know about?

It's neither wise, nor an investment.