Static caravan ownership

[Clappingforjoy]

Hi posting here for traffic.
I will shortly come into some money and was thinking of buying a static caravan not an expensive one just second hand and then renting it out for a income but I clueless on costs my responsibilities this end. Will the holiday park take care of practicalities such as cleaning between guests and giving out keys etc and what would my costs be such as land rent insurance etc and what other costs will I have.

I should add too it was immaculate - the plastic film was still on the cupboard doors. Ex DH was tube feed so the kitchen was barely used.

There are more enjoyable ways to throw away money.

Agree wih everyone that it depreciates quickly in value, site fees are horrendous especially if you are based on a site with lots of facilities.
When we had ours you were not allowed to rent it out.
It is indeed more of a lifestyle choice rather than an investment.

We've looked into it briefly but decided against it. Site fees are very expensive (and presumably will continue to rise), plus insurance, the initial outlay etc etc. Can you work out ALL the monthly costs, and then see if you can afford a mortgage for similar? A house will, hopefully, go up in value, but caravans seem to spectacularly fall.

We also looked at this and there was one main problem.

EVERY holiday park we looked at had a rule about only being allowed to rent out newer models, past X year.

Can't remember the specifics now but it certainly prevented you from buying a ten year old van for a reasonable amount and renting it out, you'd have to buy a new one for £££ to have several years of letting allowed - and the price of new vans meant there was very little profit in it.

There's been several stories in the local papers here about people who buy a second hand static on a site, lovingly maintain it, it's in lovely condition, but then it reaches a certain age and the site demands it is removed and replaced with a new one, as they don't allow caravans over x years old on the site to keep up appearances. So then these people are lumbered with removal costs and have to buy a new one to put on the pitch.

@Whammyyammy

Didcot know static caravans were still a thing. They used to be awful investments as you could only buy and sell via the site owner, and they used to pay a huge % less than you paid them. Plus site rents.

Really? Even tho every seaside town has multiple parks with them, and they are heavily advertised on TV? Very much a thing.

There was a bit on R4 Moneybox yesterday about owners still having to pay site fees even though the parks were closed due to lockdown. Couldn’t believe the cost of site fees - seemed to be minimum £5k per year and avg was closer to £10k

We used to own a static caravan. The sight was lovely but did not allow sub-letting to anyone, so please check that out first. Also, after a couple of years f going to the same place for our weekends and holidays, it got very boring, even though we actually loved the area.

Also, we had to do all of our own maintenance on the van and the pitch it stood on. The site owners only maintained the communal areas, so check that out too. They insisted the thing was washed down at the beginning of each season, for example. It was a pain.

Our friends used to own one which was on a site which allowed rentals, but they had to do all the turnarounds themselves. They live in Birmingham and the van was in South Wales, so they literally had to go there every weekend over the summer. It wiped out any profit the made.

Some sites have an age limit on vans too ... they don't want old ones making the place look run down, so you may not be able to keep it long enough to re-coup and investment. Another question to ask ....

When we sold, we had to sell back to the site (a lot of sites stipulate this), and, whilst they made us a reasonable offer which we accepted, they then sold it back on to another buyer for over £3k more ... another thing to consider.

Really OP - all things considered I'd think of another way to invest your windfall, as the caravan idea has too many pitfalls.

@Clappingforjoy I wouldn't. Unless you have money to burn.

I know several people with static caravans who have made a massive loss this past year, and are having to sell the caravan to pay the debt off.

Even when there ISN'T a pandemic, you have to be sure you can rent it out at LEAST 75-80% of the year, to break even.

The site fees are really expensive.

I wouldn't do it. As I say, unless you have money to burn, and have multiple hundreds of £££ a month to throw away.

whatwedontknow. Yes, 15 years with 12 weeks commercial lettings plus end of use sale value will cover most of our costs. We simply bank all the profit each year which is paid twice yearly after costs removed. We end up having had very cheap breaks, but not much else. That’s fine by us. We’d have frittered it anyway.

Our boat in France is much, much more of a drain and much worse investment, but hobbies cost money. We like swimming in the sea and boats. What would we have spent on short breaks or other hobbies? Probably much more and we’d have had less fun. I imagine friends travelling all over the place to run marathons or to ski, spend much more on their pleasures.

We have very reduced site fees this year, as happens.

You’d be better buying an apartment near the beach in a seaside town in England or Spain that you can let via air bnb. My dad always told me to buy what increases in value and rent what decreases......I lost quite a lot of money on a static at flamingo land so I’ve had my fingers burned.

Very much a thing.

Perhaps not in Didcot.

If you want to spend that type of money, why not put down a deposit on a property to rent, get a second mortgage/set up as a business venture? Or Air B and B your own home when you go away? You don't need the whole cost of a property up front to run Air B and B's for example, I have friends who own properties on this basis.

It's tough, though, if the rental market changes or Air B and B aren't operating, as now (except for workers).

If what you want is a nice caravan to stay in yourself, fab, but everyone I know who has bought one has either found it too expensive or got bored and sold it within a few years.

@Clappingforjoy

I also agree with the posters saying it's a terrible investment.

Someone we know bought a small-ish 4-berth caravan to live in (some 4 years ago,) after he sold his little cottage. He paid £45,000 new. He was shocked how cold it was in winter, and how noisy it was when it rained, and birds ran about on the roof, and how noisy it was through June, July, August, and September, when families came to stay in the rented-out caravans either side of him.

In addition, he had to pay some £250 a month on TOP of the price he paid for the caravan... (Fees for the site rent/ground rent, for use of the facilities on site like the bar and the table tennis/pool/darts room, the gym, and the swimming pool.

So he decided to sell it and rent a flat privately

The site bought the caravan back off him - for £21,000. 2 years later that's all it was.

We looked into it too but it’s a hugely bad investment and the yearly ground rents are ridiculously excessively (often 6-8k per year). Dh work colleague had one and rented it out. It got trashed several times, people kicked holes through the walls, stole the tv and the microwave and one family left a huge stain on the living room floor, he said it looked like a body had been left to decompose 😲

Don’t they are not too investment territory
If it’s just about investment there’s better ways to make money

I've owned one with my parents for about 16 years, it is on a site in France so we last saw it in August 2019 (my parents were there until Novemeber 2019).
As a holiday home, it has been great. We love the area and the site suits us well. It has small kids clubs which were good for DS growing up, but we are sited a long way from it it and can avoid it now he is older- using the pool, the lake and the bar if we want. We have a rent increase cap as we have been there longer than the current owners (think Canvas type thing), it was a family run site when we bought our first static. However, the fees are now much higher for new owners (although still less than in the UK). We pay 3000euros a year, I think new owners are paying about 6000euros for a similar (large) pitch.
Hiring- you get a big rent reduction if you hire through the company, but you are massively restricted about when you can use your van. You'll pay almost no rent at all if you hire out through them for all of July and August, but this is pointless if you want to use it in the summer holidays with children. Although the company will organise swap-over day, bed linen etc in these cases, they offer very little in the event that your van is damaged. We know people who have gone down this route with new vans and returned to their £50,000 new van to find red wine stains, broken beds, destroyed blinds and then realised that they are liable to pay for it all under "wear and tear". The companies will also often require you to purchase their "hiring pack" of 6 identical items- plates, cups etc. These are around 500euros and you need to pay to replace anything which is damaged- even though the guests will also be charged! New vans only, very often, up to 7 years old.
Insurance- own use only is about 250 euros a year for us. Gas check etc is included in our fees, but check this! We have a decent amount of electricity included in our ground rent- definitely enough for reasonable use. Again, check the details- some are metered useful everything.
Depreciation is huge, if you are buying second had, you can get some good deals, but check the small print about letting out. Also look into the council tax situation, you may be liable if the site is open year round, even if you don't use it all year.
That's a bit of an essay and you may already know lots of that. Let me know if I can help in any other way!

I wouldn't do it. As I say, unless you have money to burn, and have multiple hundreds of £££ a month to throw away

We have one on our own plot, so it just costs us maintenance, which isn't very much. When it wears out we will get another one. They are dirt cheap secondhand.

@CherryRoulade
That’s fine by us. We’d have frittered it anyway.

Well there's your answer @Clappingforjoy it's a great idea if you've got £1000's to fritter away and if you can commit to a hobby of renting out and maintaining a caravan that you can't use in peak season for 15 years. As others have said it is a lifestyle choice not an investment.

That's without the site making you buy a new caravan after 10 years, or hiking the fees up or changing the rules or chucking you off. While site fees are always reduced the first year as part of the sell there are lots of hidden costs in owning a static caravan.

A friend of ours parents has one. They go there basically every weekend (in non covid times) so get good use out of it, I dont think they rent it out. It sounds like its only a good idea if you want to use it yourself a lot rather than for making money

My parents had one many years ago on a quiet site with private pool and gym. It was a getaway for them and immediate family only most weekends, somewhere where we could spend time together.
As others have said, site fees and depreciation are both very,
very high. Definitely a lifestyle only choice. After around 8 years they sold up as their grandchildren got older and we were all using it much less.

Very informative and honest post @QueenofLouisiana.

I have one in the wilds of East Anglia, I absolutly love it, Its a tiny site, very old-fashioned and fairly basic, it's like stepping back into 1970 however, even my cheap old thing (which I have decorated in vintage 70s style) with very small ground rent is a lifestyle choice, it will be worth nothing as resale value, I would never rent it out as it is our second home and we basically spend all summer there (the one modern thing we have is wifi so dh can work).

We have heard horror stories from people who have owned on the larger branded sites and I wouldnt touch one with a bargepole, thye are simply money pits, not an investment at all.