RV – Page 3 – Outdoors Happy

Not only just a great place to spend a bank holiday weekend, but a caravan can be a surprisingly good investment opportunity. With travel and short break holidays more popular than ever, and more people having access to a car or vehicle than ever before, the demand for holiday lets, apartments, and caravans to stay is literally booming! How though are static caravans becoming a good investment? Static caravans are a good investment if you rent out your caravan during the season whilst it is unoccupied and can bring an investment return of up to £51,203.32 over a ten year period. Owning a static caravan can also save an additional £47,920 in family holiday costs over the same period. Like with any asset, you’ll want to squeeze as much value from it as you possibly can. There are ways to bring in a passive income to help pay for your caravan, as well as a nice tidy profit when you’re ready to sell – as long as you follow the best practises to achieving profit! Why Static Caravans are a Good Investment The first caravan was made way back in 1880. Over 140 years ago now! Since then, people have - in one way or another - enjoyed the holidaying delights of staying in a static caravan. A home away from home. It’s not a pastime set to disappear any time soon. In fact, even though so many of us are travelling overseas for our holidays, there are still a number of us who enjoy nothing more than to retreat to their caravan and escape from the urban life for a while. Of course, many people don’t buy a static caravan purely as an investment but combined with the savings of not taking a holiday overseas, plus the years of wonderful enjoyment your caravan can give you, the benefits can be almost priceless! Short breaks and holidays are almost an expectation than a luxury. The average number of holiday makers is now 86% of the population, according to ABTA. The average Brit now takes 3.6 holidays every year! They all need somewhere to stay. This is a trend only set to continue. A higher volume of holiday makers means an increased demand in the most sought after places. Choose a static caravan pitch in a highly sought after area, particularly with high demand and low supply, could mean a regular return monthly income as well as easy selling potential when the time is right. Average Caravan Investment Returns Revealed Surprisingly over the past 10 years the value of a static caravan has risen from £28,322 to £42,875 – an increase of 66%! Unfortunately, brand new caravans depreciate in value. It’s frustrating because if static caravans didn’t depreciate in value this would be a yearly yield of 5%. Compare this to the yearly yield of 0.1% from a current or savings account, or 2% from a Stocks and Shares ISA and you can see just how appealing this would have sounded. Unfortunately, it isn’t the case though. The investment return comes from rental, but it has to cover the cost of the ground rent, electricity, water, and insurances. Even if you just break even you get to enjoy the delights of your caravan for the next 10 years for free, and in 10 years your caravan will of course still have a value if you keep it in tip-top condition. On average static caravans made 10 years ago are selling for around £18,000-£20,000. The cost of an average 2 bed static caravan this year costs £42,875. The ground rent, electricity, water, insurance costs an average of £2,000-£5,000 a year depending on the size and popularity of your caravan park. If we took the median value of £3,500 per year, it would cost £33,500 over a ten year period. Add this to the price of a new static caravan and your investment spend is £76,375. If you could earn £100,700 in that same period with rentals and sold your static caravan for £26,878.32 (adjusted for inflation of 3% per year over the next 10 years) …. ….it would bring you a net return on investment of £51,203.32! How You Can Make Money with your Static Caravan Having spent many weekend and weeks as a child staying in a caravan, I can say first-hand how much enjoyment staying in a caravan can bring. Even now I can get excited about a caravan stay. I even opted to spend a long-week business trip in a caravan rather than a hotel. Caravan staying is quite nostalgic for me, but with mod-cons such as an oven, fridge, freezer, microwave and a separate living area, separate dining area and separate bedrooms – you may as well be staying in a luxury suite! As well as the enjoyment of staying, you can also make money with your static caravan in the following ways: Renting Out Your Caravan through your Caravan Park Many larger camp sites, camping grounds and caravan parks offer rental opportunities. They hold the keys to your static caravan and can rent it out to other holiday makers coming to the park. The caravan park can also provide cleaning services in-between guest stays, deal with any guest questions or issues. Although you will pay a % of the rental income to the caravan park for their services, it means you can make money with your static caravan whilst you’re not using it. Airbnb Lets More and more static caravans and mobile homes are coming up for rental on Airbnb. If your caravan is on your land, and you can manage the influx of guests and are available to check people in it could be a great way to make some passive income from your asset. The Money Boost website has a good article on how to make money on Airbnb you should check out, which explains how much it costs and how much you are likely to make. If your caravan is in a camping ground or holiday park, they may – for a fee – manage incoming guests from booking sites such as Airbnb, with key handling, checking in, questions etc… Facebook Caravan Rentals Although Airbnb is one option to rent your static caravan, there are others. Airbnb is the choice of millions of people looking for somewhere to stay, but Airbnb will charge you 20% of the revenue you make per stay. So, if you charge £100 a night to stay in your static caravan, you will need to pay Airbnb £20 from that. Another option is Facebook Marketplace. An intriguing high number of caravans and motorhomes are popping up on the site. Considering it’s absolutely free to list your caravan rental on Facebook Marketplace, it’s no wonder why people are moving across. Facebook Marketplace has a huge audience to market your caravan to. You can pay to promote your caravan rental advert, and if you manage this right, you could save a lot of money each year. If you listed your caravan on Airbnb, your average nightly rental was £75, and you managed to let out your caravan for 180 nights a year you would make £13,500 a year in revenue but would have to pay Airbnb £2,700! This is £225 a month extra you could earn listing for free on Facebook. How Your Static Caravan Can Grow as an Asset Let’s imagine you purchase a second hand static caravan for £18,000. Not only is your investment growing organically over time, with added rental opportunities it could become a healthy nest egg. Even if Airbnb were the only answer for rental and you could make an extra £10,700 per year, over 10 years this would yield an income of £100,700! It’s only right at this point to mention that of course, any investment is speculative. Any asset can decrease in value as well as increase, and you could end up with less than what you invested. Considering the value of caravans and holiday homes the risk may be less than other investment types. Tips to Maximise the Value of Your Caravan Although there is definitely good investment potential in static caravan ownership, there are some things you can do even before you purchase your caravan that can lead to a much bigger return in twenty years-time. Here are just some of the options: The location of your caravan is key to a longer term investment return Static caravans can be moved, but it isn’t easy, and it can be costly, which will start eating into any profits you start to make. The key is to find a spot which will always be high in demand. A regular tourist spot, with 10-months or more per year demand in accommodation. Although you may find a nice quiet cheap campsite or park, and you may find like-minded people to rent, the demand may not be enough to make as good a return as you could. You have to way up the pros and cons on this one. If your static caravan is to be used by you, your family, and your friends – and you yearn for a nice quiet place rather than the hustle and bustle of large family orientated caravan parks with lots of activities and onsite entertainment, then it may be better for you to find somewhere quieter and cheaper. Use Your Caravan for Your Own Holidays Did you know the average cost of a two week family holiday, according to Evolution Money, has now risen to £4,792! This is a cost, and a potential saving, of £47,920 over the next 10 years. If we add this to the investment return, we calculated earlier, the true return would be £99,123.32 – almost a £100,000 investment return!