Buying a Caravan ? Wise investment?

Adly812

Thanks everyone.point noted, I think I'll look into other ways such as trusts/bonds. The rates are just so low at this time. It just sparks me to question what other options and places can an individual invest in. I don't have a massive amount but the bank rates are pretty shocking.

knightstyle

So what would you recommend the opp. does with the money? It is hard to put it somewhere, low risk, that does not loose value when rising inflation is taken into account and they do not have enough to invest in property in an area which is increasing in value?

Davesnave

knightstyle wrote: »

So what would you recommend the opp. does with the money? It is hard to put it somewhere, low risk, that does not loose value when rising inflation is taken into account....

A stocks & shares ISA, or similar, would give a reasonable return over time, as TBagpuss has already said.

This is not one product, so the OP could choose the level of risk they're comfortable with and almost guarantee not to 'loose money' in the long term, if that's what they wish.

MataNui

A caravan is not an investment. Its a money pit
Lots of people think they can do this and end up hugely in debt with no caravan.
Things to think about:
A reasonable older van will cost you about 20k sited.
Site fees will be between 4 and 8K (with utilities and insurance).
If you need to finance the caravan it means you will be paying out 8 to 10k a year just to have it on the site (thats about £400 per month.

From a strictly financial point of view you need to work out how much income you can generate from renting it out. Dont forget you need to clean and set it up and then advertise and manage bookings. Of course you could let the park do this but if you do then be prepared to get pitiful percentage of the rental value for yourself. The park keeps the rest.

You also need to realise you are dealing with an industry that makes used car salesmen look like charity workers.
The markup on your van (as sited) can be up to 80%. They can put all sorts of conditions on the sale (in the worst case you buy it from them at 80% inflated price and have to sell it back to them at half market value). You may not be able to sublet at all on the park or you may only be able to sublet via them (so only get a small percentage of the rental value). A typical holiday park season is only 10 months (some are only 8) so you are limited in the time frame you have for clawing back that 10k per year outgoing).

I used to work for a company that provided a service to caravan parks and know exactly what these people are like. Most of the profit they make comes from the sales side. High markup, high additional costs and pathetic compulsory buyback coupled with limited caravan lifespans (a good static carvan these days will last decades but a lot of parks will only let you keep it on site for 10 years).

Its not a good investment idea in the slightest. If you want the sort of park life and somewhere to take holidays or weekends any time you want and consider £8k per year as disposable then that fine. But simple facts are a caravan will never appreciate in value and you will never make a reasonable payback (if you are lucky enough to even cover costs which some people do but its unlikely, particularly of you want to use it too) from renting it. They depreciate at least twice as fast as a crap cheap French car and your 20k purchase (plus interest plus about 26k over 3 years in site fees) van will get you about a grand after 3 years when you try to sell it on and find you can only sell it to the stealer you bought it from in the first place.

seven-day-weekend

Your caravan will depreciate like a car does.

We bought one last year,and although it is mainly for our own use, we do let friends and family use it at mates' rates.

The site fees are 3.5k a year, plus the cost of gas, electricity and insurance.

However, we have never expected it to be an investment - just a way of having some nice down time in somewhere we could call our own. We go there very other week on average -Friday to Tuesday .

We expect the value to be virtually nothing in ten years' time.

If you want an investment, I would certainly look elsewhere.