Hi, I’m very new to all this and I feel that I have stumbled across a great cf+ve investment, however it’s a permanent caravan site in a major regional centre that has a large demand for rentals (between 35-40%) of the population rents. Has anyone had any experience regard to the capital gain growth of these type of properties? and any other insight would be great.
Hi, glad to hear you’re ready to give investing a go. I would personally avoid purchasing a permanent caravan, (and I know little so I could be wrong) simply because the land belongs to the caravan park owner, not the caravan owner, and as such the rents can appreciate, but the van itself will depreciate (and much more rapidly than a normal house) and unlike a normal house/land investment, once the van’s dead, that’s it, show is over. If a house is bulldozed you still have the land.
You are at the mercy of the landlord of the caravan park…if he decides a block of units is a better idea, then there goes your parking spot.
Also the quality of tenants often leave a lot to be desired (not always but often – I did street ministry in a couple of van parks) and as such I would find a permanent van an unappealing and probably headachey investment.
However, that’s only my 2 cents worth. Maybe others have different opinions?
Redhaven.
Redhaven
I’m also quite new to the idea of cf+ investing, I recently stumbled across a permanent sited caravan that would have been cf+ and even put an offer in. But after getting some advice from my fellow investors and looking more carefully into it I decided to pull my offer off the table.This was due to a couple of reasons: 1/ I found out that you cannot get a homeloan for these types of properties ( this means I would have to use all of my existing equity in my home, as well as making it difficult to resell later ), 2/ I found out that the property had been on the market for around a year ( this put up warning signs in the way of resale too), + why had this seemingly great cf+ deal not been snatched up in a year by another investor?.
Dont get too head over heels before you find out everything you can. If you can afford to fund the purchase without a loan then that’s great- but be careful not to jump in with your heart instead of your head. Good luck and happy investing! veronicabridges[biggrin]I’ve noticed that the first thing a person new to cashflow positive investing looks at is a caravan (I did too). But see the above reasons. They are a poor investment as nothing about them goes up in value.
When you buy them you get no equity, so if you use the equity in your home to buy one you will need to get a high enough return that you can repay your equity plus have profit. No bank will loan against a caravan as security so…
Didn’t some of the MAPers buy something in a van park and do well out of it (Coffs Harbour?)? Again I think it boils down to the due diligence process again. Sometimes it will work sometimes not.
Anne.
Two points.
1. A caravan is not real estate. I would treat it as a business venture.
2. I have been told that where the Park owns vans as well then they will usually fill theirs first and the outside owned ones after this.
I would keep looking if I was you.
Cheers,
Simon Macks
Finance Broker
[email protected]
0425 228 985Comments may not be relevant to individual circumstances. If you intend making any investment, financial or taxation decision you should consult a professional adviser.
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