I was wondering if the forum would be able to assist me with regards to purchasing caravans as cashflow positive opportunities. I have two opportunities that I am currently discussing with an agent, both of which are generating a solid positive cashflow outcome, with long term tenancy agreements in place. The weekly site costs have also been factored into the calculations. Just on one of them, I calculate a 39% CoCR using a worst case scenario of the lowest weekly rent and a moderately high interest rate of 9%. Both opportunities are permanent in nature, so they are effectively a house on-site.
I’ve looked on the forum discussions, and there isn’t alot I could find re: caravans. Has anyone purchased a caravan recently that is tenated? What are the pit falls with purchasing caravans in terms of maintenance etc. More importantly, I’m interested to know if anyone has obtained finance, given it is not land that is being purchased. Ideally, I am looking to obtain finance with interest rates close to home loan rates. Or, have people just taken finance at the higher, personal loan rates?
Any guidance would be much appreciated. Thanks again,
They would be exretmely hard to finance. You may be able to get a personal loan to help you get one or two, but after that very hard.
One drawback I can think of is that your tenants could just hook your carvan up to their car and disappear into the sunset!
Terryw
Discover Home Loans
Mortgage Broker
North Sydney
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Personal loan to buy investment property????
That is just crazy!
I would suggest going with standard type security first to build a base and when you have good excess funds or equity, then buy things that you can not use later to borrow more against.
When I grow up, I want to be a storm trooper!
This is not a real estate investment.
I would view it as a rental business and structure it as such.
Cheers,
Simon Macks
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Comments may not be relevant to individual circumstances. If you intend making any investment, financial or taxation decision you should consult a professional adviser.
Hi
i looked at doin this to a while back as there is a huge demand for accomadation the only thing was that all the carvanparks were full and there were waiting list of about 30 people but i think it is a good idea
Thanks Rob
My position regarding Caravan Parks is pretty clear. In case anyone missed it, I think they are CRAP investments for those starting out. I would also NEVER touch one if I had millions to spare.
Any manager of a Caravan Park could easily buy all the sites. They sell them for a reason. They can maipulate the tenancies in those sites they do not own. Why wouldn’t they keep their own sites full and only rent yours out when there is nothing else left? There are quiet times in tourist areas as well!
_____________________________________________
The poster formally known as The Mortgage Adviser
When I grow up, I want to be a Storm Trooper!
Hi bmcgregor, Hubby and I are just moving out of a Caravan Hire Business we have owned for 12 years. We had a fleet of 19 Caravans. Hiring out caravans is unbelievably lucrative. We have actually purchased a Caravan for $5,000 and rented it out for years at around $70 week. Some of our caravans have made $30,000 over the time. Finance to purchase caravans is not difficult, though appropriate insurance is costly. Ideally, you need large vans with lots of bunks for families with long term rentals in mind. Smaller vans tend to attract short term rentals, with more time for vans to be sitting idle. The big downside for us was the high non-payment of rents by transient tennants, This eventually wore us down to the point where we are today, we are tired of it. Perhaps collection of rents could be better managed than the way we did it, I don’t know. If I can help you in any way, please feel free to email me at [email protected]
Any manager of a Caravan Park could easily buy all the sites. They sell them for a reason. They can maipulate the tenancies in those sites they do not own. Why wouldn’t they keep their own sites full and only rent yours out when there is nothing else left? There are quiet times in tourist areas as well!
Hi bmcg
I looked at buying an onsite cabin in a caravan park. The investment was small and the returns great javascript:insertsmilie(‘[fez]’)
Fez [fez] – until the park owner decided he wouldn’t allow me to rent it out. javascript:insertsmilie(‘[angry2]’)
Angry [angry2] He owned others and said my renting out would reduce his income (true). If the owners of the park change, this is a possibility. It’s still a good way to start small if you can overcome these obstacles.Keep doing the sums
Ann
I think there are more constructive ways of helping each other than calling people CRAZY and telling them it’s a CRAP investment!
I say… good on you for thinking outside the square. Good luck.
Regards,Sharon
Hi mcgregor
Have survived the management of 3 van parks.
They vary a lot, as do the guests and the accommodation.
We enjoyed high returns on buying vans, then renting them out on site, preferring ones with showers & loos. Bought around $6K, rent $120 pw.
Where else do you get 100% return ?
However, operating a van park which provides short and long term accommodation such as caravans, by nature attracts people who are wearing ( I’m feeling charitable tonight).
Van Park managers really earn their income the hard way. There are personal risks. Centrelink pay day evenings are usually the most interesting.
There is a high level of skipping & damage.
Do a cash deal with the manager for letting, relets, % per month etc, whatever, so you’re not last priority. Hope you make some good money.
I don’t understand why any manager would let anyone else ” in ” on the lucrative van renting, but if you have entre, enjoy it.
Feel free to PM me if you want more info.
good luck
cheers [biggrin]
thecrestthecrest | Tony Neale - Statewide Motel Brokers
http://www.statewidemotelbrokers.com.au
Email Me | Phone Meselling motels in NSW
Hi I am back,thought I would ask a question or two
[buz2]I think buying caravans to rent out is an ok idea…BUT …have you checked out the type of clients you will have?
Have you checked out the income of the prospective clients?
and how you will collect the rents?
Beleave it or not the best clients in my opinion
are aged, invalid, and sole parents, all of which are pretty secure clients .
All of which usually need a place to live and centre link are happy to make automatic payments from the client to the rentee you can ask the clients/renters to pay the insurance to cover damage etc.
have you checked the requirments of the local council in the area?
is there already a caravan park in the area who will lease to you the sites required? is there any unknown cost?
can you buy land of your own to establish a caravan park? will council let you? what are the start up costs?What is the cost of insurances ?
for Damage /Liability insurance
You could make a non alcohol park…
thus cutting down on fights etc…..
If it is a private park you may have more control
over who rents your vans.
hope these questions help .
I am EZY[buz2]Hi Ezy
The photo of the tall building fell off the page somewhere.
cheers
thecrestthecrest | Tony Neale - Statewide Motel Brokers
http://www.statewidemotelbrokers.com.au
Email Me | Phone Meselling motels in NSW
Hi sorry about the tall building …my brain is small and my heart is big
[blush2][blush2][blush2]
even superman would have had trouble with that building…ezy now jumping off.[buz2]oops I have forgotten my cape[confused2]I have been thinking about doing the same thing but the Van i was looking at has a long term tenant in it already(old couple) and think that if the van you are buying is in the same boat with a long term lease i couldn’t see a problem. Remember to check out other costs though, ie rental of the caravan park lot etc would have to be factored in and during peak seasons(XMAS) rental of the land it’s on usually doubles.
Good luck and let us now how you go
Ty
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