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Buying a Caravan to Rent Out
When taken at face value, the idea of buying a static caravan to rent out may seem like a no brainer. After all, caravan holidays are one of the most popular types of break in the UK. Then, all the holiday parks seem to do great business. At Caravan Helper, as touring and static caravan enthusiasts, we are incredibly passionate about this type of holiday. However, before you make any rash decisions and part with your hard-earned cash for your own static caravan, there is a lot you need to think about, beyond even the price of a caravan.
To help give you some food for thought on the subject, we have put together this brief guide. In it, we have highlighted many of the important considerations you need to make that you may not have even thought about.
Are You Going to Buy New or Second Hand?
This is the first thing you need to give some serious thought to – the type of caravan you are going to buy – new or used. Although buying new will mean that you have a caravan that does not have any wear and tear or other problems or issues caused by previous use, it is a much more expensive way to buy a caravan.
On the other hand, you could save a lot of money buying a used caravan and doing some work on it. You really need to think about your available budget and how much time and effort you want to put in, especially when you factor in many of the other costs and expenses outlined below.
Rental Income is Taxable
It is important to note that just as it would be if you were renting out a flat, house, or other accommodation, rental income from your static caravan is taxable. This means you need to tell HMRC.
On the plus side, though, there are various expenses and costs associated with buying a caravan and renting it out that you can claim as expenses. You may also be able to claim tax relief for costs on fixtures, equipment and furniture and you may be eligible for capital gains tax relief too. For more information, take a look at the Furnished Holiday Lettings page on the HMRC website.
You Need Public Liability Insurance
Whether you are intent on renting out your caravan or not, you will need to insure it, as you would any other vehicle or accommodation. As part of your deal with any holiday park, they will likely require it is insured before allowing you to rent it out on their land.
Among other insurance considerations you need to make, you will definitely need to invest in Public Liability Insurance. This provides you and your guests with protection if there are any damages or casualties that occur due to accidents that happen in your static caravan.
Important Safety Requirements
Along with Public Liability Insurance, there are other safety requirements you need to meet when deciding to rent out your caravan to paying guests. The responsibility for the safety of your guests is yours, particularly when it comes to gas and electricity.
Electrical Safety
By law, you need what is often referred to as a fixed electrical installation certificate. This piece of official documentation provides evidence that the fixed wiring in your caravan is completely safe and fit for its intended purpose. You will then ideally need to renew it every 2 or 3 years at least.
Further to that, if you have any electrical appliances that are more than a year old, they need to undergo Portable Appliance Testing, PAT for short, every year. This test will provide you with official documentation in the form of a certificate that you can display for your guests to see.
Gas Safety
Any gas appliances that you have in your caravan need to be installed in line with the most current gas safety requirements and the instructions provided by the manufacturer. Why is this important? If anything happens and you haven’t met these requirements, your insurance may not cover you. This certification also needs to be renewed yearly and should be displayed prominently in your caravan.
Carbon Monoxide Safety
Carbon Monoxide is a serious concern. This dangerous gas is not only incredibly toxic, but incredibly hard to trace as it is tasteless, odourless, and colourless. Exposure to it can result in anything from dizziness, sickness, nausea, and headaches to heart disease and even death. By law, you need to have at least one carbon monoxide detector, if you have any gas appliances in your caravan. This is the only safe way to detect this dangerous gas.
Cleaning and Laundry
Just like any other landlord of rental properties, you need to consider the cleaning necessary and any laundry that may need to be done between bookings. Are you going to take care of this yourself or are you going to hire someone or a company to help? These are further costs and expenses you need to add to factor into your calculations.
Advertising and Marketing Your Rental Caravan
Another expense and aspect of renting out a caravan that you need to factor into whether it’s a feasible idea or not is the fact that you will need to advertise and market it somehow. Whatever way you choose to do this, even if you use the free methods, it’s still something that will need to be your responsibility.
Manage Bookings
When you do get interest and people want to be guests in your caravan, you then have to manage bookings. The last thing you want, after all, is double booking your caravan. You also need to have robust and safe payment methods in place.
Not All Caravan Guests Are Created Equally
It would be a nice fairy tale to imagine that all your guests are going to be nice, tidy, and clean and are going to treat your pride and joy with a measure of respect. You know, as if it were their own home. The problem is, we don’t live in a perfect world and as much as we would like it to be the case, not all caravan guests are created equally.
While some are fine, there will inevitably be those that leave your caravan messy and unclean and those who take their disregard to new levels and actually wreck things.
When this happens, even if you have deposits and contracts outlining their duty of responsibility, you may have a hard time chasing them up to pay the extra expenses for damages.
Obviously, one way around this is by being incredibly selective when it comes to choosing who you rent your caravan out to. Understand, though, that this may mean you can not make the profits you originally thought you might be able to.
Conclusion – Is It Worth It?
As you can see, there is a lot you need to think about if you are looking into the idea of buying a static caravan to rent out. You may be wondering after reading all of the above if it is really worth it. It really depends on what your expectations are. If you are expecting for it to be a real money-spinner, you are likely to be disappointed, because one single caravan rental is unlikely to make enough money in profits compared to what it costs, especially when you factor in your own holiday time using it. However, if you have a more realistic approach, or you happen to have a particularly good quality, high-end caravan in a great location with lots of modern features, it could be a success.
We’re sorry if this has all come as a shock and as a site that is passionate and dedicated to all things caravanning, it may sound contradictory to try and talk you out of it. We just want you to make the best decision.