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The Pros and Cons of Buying a Static Caravan
This is one of the much-discussed areas when it comes to caravans. The pros and cons of buying a static caravan is something that brings plenty of opinions, some emotional…often financial.
Many people dream of owning a static caravan in a beautiful location. This might be done because of a vision they have; it might well be because it makes financial sense because it’s a lower cost of living or simply a good investment.
Whatever the reason, it is somewhere to go, relax and rewind. Somewhere you can become familiar with and benefit your whole family
In this article, I will consider the pros and cons of buying a static caravan, looking at some of the issues you will face and the real world benefits you get. This is an in depth look so sit back and take it in.
When we look at the advantages and disadvantages of buying a static caravan, lets consider it from the following aspects;
One of the major attractions of a static caravan is the lifestyle it brings. Essentially, it gives you the opportunity to effectively spend significant parts of the year at another location, somewhere where you really enjoy being.
In some cases, such as residential parks, you can live there full time. With caravan parks, you are restricted to a degree but the majority of the year should be available to you.
- New location
- Feels like million miles away
- Feel pressured to go there to make it feel worth the investment
- You may grow bored of the same location
- You may not like your new neighbours
- May find it harder work ‘running’ two homes
- Friends and relatives asking if they can come with you
If you are a regular caravaner and enjoy visiting the same places, it may well be financially prudent to actually consider buying there…especially if you like to visit frequently. However, it is important that you do the maths. As you will see further down, there are aspects like costs and depreciation to consider, things that are often overlooked with the excitement of buying a static caravan.
Most caravan parks will offer some kind of finance package, a way of inducing you to buy in their park. You have to understand that caravan parks are businesses, so they will be looking to make their money somewhere.
Effectively they are offering you loans so if this is the way in which you want to go, it is definitely worth shopping around for the best finance deal. There are specialist caravan finance providers that may be able to offer better rates. My advice to you is to shop around for the best deal and not feel pressured into accepting the caravan parks offer.
- Spreading payments may make buying a static caravan affordable
- Less upfront costs
- Helps you understand the cost of your investment
- Overall cost becomes more expensive
- Taking on liabilities you cannot afford
- Your caravan is security to your loan
- Possible restrictions on selling
When it comes to static caravan, caravan parks and residential sites, the costs aspect can be one of the most difficult to grasp. Often, the costs of static caravans are not obvious, sometimes hidden in the terms of your contract.
An example may be the cost of electricity and gas. You may be under the assumption that they are covered in the service charges, in most cases they are not. Furthermore, you may be contractually required to buy your gas from the caravan site, meaning you are not necessarily getting the best price.
One of the biggest costs is the annual service fee…which can run into the thousands every year. This is quite a big commitment and is payable whether you are there or not. This obviously needs to be factored into the overall cost.
- Simplicity if they have on site services
- They maintain the site
- Often hidden in terms and conditions
- Overpay for some services
- No control over increases in service fees
- You may have a council tax liability
It may well be that you really like going to a certain location. It may be close to you or it may have some other attraction. Whatever the reason, you better like going back. Once you have a static caravan, it is obviously staying there. The chances of being able to move it are almost none. There are so many hurdles put in place by caravan and residential caravan sites that it is unlikely you can move your existing static caravan.
Therefore, before you make your decision, you should try and stay at that location a few times at least…possibly in a rented static caravan or even a touring caravan.
When considering location, also consider how long it takes for you to get there, any particular weather issues and also what the wider area has to offer. For example, how far is the bank, supermarket or garage. These things matter when you are essentially living there. Some caravan sites have idyllic locations but they are essentially in the middle of nowhere so a reasonably long drive is required to get to town.
- You like the area and have visited many times
- Got a historic link to the area
- Potential to get bored with the same location
- Closeness to essential services
- Limited on-site services
Selling your static caravan
Selling your static caravan may not be so simple. In most people’s experiences, buying it is relatively straightforward. Selling…not so much.
What really catches people off guard is the fees that come with selling it and more often than not, onerous terms that have been added by the caravan park.
When it comes to selling, it may well be in your contract that you need to give the caravan first refusal or even worse, you may need to sell it to them. This means that they have total control over the price that they give you.
Additionally, even if they are not buying it, it may be in the terms that they are entitled to up to 15% of the sales price as a commission. They may even prevent you from advertising the sale on site. It is always worth checking what the selling process is before you even buy.
You also have to contend with the fact that many sites apply a book value to the caravan so depreciate the value every year, regardless of the condition. Add the fact that caravan sites often won’t allow older caravans…10 years is normally the limit…this further reduces that chance of getting a decent price.
Additionally, depreciation is also a major issue. More on this further below.
- Sell your asset before it devalues further and no longer utilised to its potential
- Massive depreciation
- Limited sales market
- Liable to large commissions
- Big difference between what you paid and what you get back
- Static caravans are often depreciated by book value not condition.
Renting your static caravan
For many people looking to buy a static caravan, the initial thought process revolves around renting it when they are not using it. In principle, this is a good idea. Great in fact.
The reality may well be an issue. Some residential parks and caravan sites have a strict policy against this becoming reality. If this is in your thoughts, I strongly recommend that you get it in writing. You do not want to finance a caravan on the basis of rental income only to find it is not possible.
Even if you can rent it, there are a whole host of new issues to contend with. Firstly, the management of the caravan. Who will clean it and prepare for new guests? Of course, this can be handed to a management company but it will obviously cut into your revenue.
You also have the issue of finding guests to rent it. Not as easy as it sounds, especially when the same site may well be doing the same thing.
If this is the avenue you intend to take, take everything into consideration and always plan based on the worse possible scenario. Only taking this route will let you know if it is financially viable to buy a static caravan which is subsidised by rental income.
- Rental income
- Help pay off the finance
- Preparing for new rentals
- Paying management fees
- Damage by guests
- Finding rental customers
- Increased insurance costs
- Maintenance issues
Depreciation of static caravans is a real concern to buyers and for good reason too. Many caravan sites will not allow static caravans older than 10 years old. This date essentially lowers the numbers of buyers and is reflected in selling prices.
You may also have the obligation to sell your caravan to the park…basically having to accept whatever price they value it at. They do so based on book value rather than the condition of the caravan. As it gets older, more of the value has been removed. This can seem incredibly unfair and many a caravaner has a story to tell.
Therefore, have a realistic expectation of returns when to decide to sell. It may turn out that you aren’t getting much back.
- Unreasonable return
- Unfair depreciation methods
- Impossible to find a new buyer
- Having to accept whatever price offered by caravan park or residential site
So, there we have it, I hope you found this article on buying a static caravan pros and cons useful…at least I hope, it gave you some things to think about.
Whatever stage of the buying process you are at, think very carefully and make sure you read the terms that are being offered by any caravan park or residential caravan site. If they make and verbal offers make sure they follow it up in writing.
It may seem that there is a lot to think about…there is…but once you navigate this potential minefield, a wonderful experience awaits. Having the ability to nip off on a short break is fantastic and it’s a great place for you to take family and friends.
Let me know your thoughts…have you bought a static caravan? What was your experience when it came to buying and selling? Do you have any advice for prospective buyers…leave a comment below. We are all here to help out our fellow caravaners.
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