Caravan Parks and mobile/relocatable homes

Dear Guys,

Would be interested hearing your opinions and experience on investing in caravan parks and/or mobile/relocatable homes.

Pros/Cons etc.

Best Regards,

Cathy B is the expert on caravan parks, Sunstone.....hopefully she'll give you her wisdom. Well, once she gets rid of that mould!! :D

Ruby :)
Hi Sunstone

I would also like some info on renting relocatable homes. We had one built and placed in a caravan park 2 years ago and used it as our holiday home. We have recently moved to the area and rather than sell it, decided to try renting it out as a holiday rental. As we have only just begun, I cannot give you any adivce on whether it will be a success. However I do know that the value of the home has increased by at least $20,000 in 2 years, which was quite a surprise.

I am interested in finding out if others have successfully rented a relocatable home for holiday lettings and how they have gone about it.



Wow! You must have the home in a great park in a great location.

Often they depreciate and people have trouble selling them, but if the location is right maybe that has helped you.

Will reply to Sunstone tomorrow - i'm heading home now.


Cathy B
Yes, Cathy B. The relocatable is in a very highly sought after park, opposite the beach, where there is a waiting list for people to buy into the park.


Sorry about the late reply, work, long weekend .... :)

Caravan Parks are in my view a business - for an owner manager they are very much 24/7. You can lease parks or own the freehold and operate it or a combination of these. You could also run them under management but need to find good people who will work 24/7 for fairly low pay and there are some IR issues around employing / contracting managers. There are many stories of managers employed under the award and who later sued owners for every bit of overtime they ever did.

Parks are valued on their net operating profit at different rates depending on location - coastal or inland (NSW info - you would need to check on other states). Coastal parks because of their "perceived" lifestyle advantages (If you can get them - while everyone is on the beach in summer you'll be busy cleaning the amenities!) are valued at between 10 and 12 % and inland parks from about 15 - 18% of net operating profit.

Of course there are all the usual tenant issues to deal with (different legislation in NSW to residential), accreditation, ratings and local government rules.

If you look at some of the returns on individual vans they can be incredible - we used to have several old vans valued at about $1000 each that returned about $70 per week at 80% occupancy! Tenants were a bit dodgy though.

The best guests though are generally those paying the least - those with their own vans who pay for a powered site. The baby boomers have hit the road and travelling around for months sometimes years on end.

You could invest in a freehold and lease the business or perhaps invest with someone as a silent partner if you don't want to do the hard work - I can't give you the leasehold details however there are several good caravan park brokers who deal in parks who have all the financial information.

We also found it difficult to refinance our park although we had never defaulted and had about 50% equity. So that may be an issue.

The CCIA NSW may also be a good starting point.

If you have specific questions I'd be happy to have a go at answering them.

One interesting facet about caravan parks.

I was talking to a banker re commercial loans for something that didn't come thru, but he asked if it was a caravan park. No, I said.

Pity, he replied. A caravan park on the coast and on the highway is a licence to print money. We lend well on those...
Dear Cathy,

Thanks for your detailed feedback.

On a general note what do you think are perceived as the better investments -

1) Holiday Caravan Park with a large percentage of mobile homes but a more transient customer base (Higher volatility)


2) More inland caravan park (further inland away from the coast) with a greater percentage of permanent retirees?

Also a couple more questions :----)

With brokers are there any that you recommend that specialise in this area?

Do you have any ideas why the mobile/relocatable home business appear to have not taken off here as much as it seems to have done in the US?

Do any parks simply sell the blocks of land within the part that can then be released without any body corporate fees?

Thanks for your help.


Pure speculation

I have no Idea why caravan parks and 'mobile homes' have not taken off here like in the States but, my guess is simply affluence. Returees in Oz dont have as much money in 'real terms' as those in the US. Also there is a much larger population base making property more valuable and options like trailer-parks more attractive.

2 Cents of completely uninformed guesswork.


Some of the following American resources on mobile parks and other commercial properties like shopping centres, office buildings, and apartment buildings might interest some people.

DealMaker's Guide to Mobile Home Parks: How to Buy and Profit from Mobile Home Parks
by Ray Alcorn

The Unknown World of the Mobile Home (Creating the North American Landscape)
by John Fraser Hart, Michelle J. Rhodes, John T. Morgan

"In American popular imagination, the mobile home evokes images of cramped interiors, cheap materials, and occupants too poor or unsavory to live anywhere else. Since the 1940s and '50s, however, mobile home manufacturers have improved standards of construction and now present them as an affordable alternative to conventional site-built homes. Today one of every fourteen Americans lives in a mobile home. 12 million Americans are sheltered in mobile homes because of scarce affordable housing.

In The Unknown World of the Mobile Home authors John Fraser Hart, Michelle J. Rhodes, and John T. Morgan illuminate the history and culture of these often misunderstood domiciles. They describe early mobile homes, which were trailers designed to be pulled behind automobiles and which were more often than not poorly constructed and unequal to the needs of those who used them.

During the 1970s, however, Congress enacted federal standards for the quality and safety of mobile homes, which led to innovation in design and the production of much more attractive and durable models. These models now comply with local building codes and many are designed to look like conventional houses. As a result, one out every five new single-family housing units purchased in the United States is a mobile home, sited everywhere from the conventional trailer park to custom-designed "estates" aimed at young couples and retirees. Despite all these changes in manufacture and design, even the most immobile mobile homes are still sold, financed, regulated, and taxed as vehicles.

With a wealth of detail and illustrations, The Unknown World of the Mobile Home provides readers with an in-depth look into this variation on the American dream."

Managing Mobile Home Parks by Stephen G. Pappas, CPM

Bobq - either my broker couldn't find your commercial banker or our park which is on a major inland highway was just that bit too far from the coast.

Sunstone - I think that perhaps the retirees would be on the coast - very few are retired in the parks here. For them the coastal lifestyle is what they can achieve at a percieved lower price than purchasing an expensive home in the same area. Often the parks are very close to the beach (too close for my liking - thinking of coastal erosion) than homes that they could afford in the same area. They still have to pay weekly site fees which actually cover a lot of expenses such as rates, water connection, garbage collection, lots of grounds maintenance and often security in the better parks. These fees can be quite high on the coast I have seen rates advertised as high as $93 a week, we only charge about $58 including GST.

Your question about the preference depends on what you are seeking - high returns vs longer term security. For example in the holiday market we certainly noticed an impact in people travelling when fuel prices were very high in late 2000 and those that did travel complained a lot about them. On the other hand parks are seen as recession proof and able to survive changes to the economy.


To answer your other questions -

1. Yes I do know of some brokers that I have dealt with I can give you their names.

2. There are over 900 parks in NSW ranging from tiny to huge so it is big business here and growing with the huge amount of promotion done by the Caravan Industry Assn. over the last few years. Have you ever picked up the AAAT Caravan Park guide from the NRMA or your state motoring association? It is a very thick publication.

I think the sale of individual homes within parks is limited because of state legislation, limitation on financing mobile homes and conservative owners.

3. As I understand it there are no land title laws that allow parks to be, effectively, subdivided or strata titled. Correct me if I'm wrong anybody ?

I would love to know if it can be done.

Brokers to use

I would recommend Australian Finance Corporation - AFC. They specialise in Hotels and have done some work in Caravan Parks.
Mobile Home Notes - US style


I have looked at the site that Mike mentions and am interested in the deals that they do in the US. Does anyone have any info on doing the same here? I mean the process of buying mobile home "notes".

Can anyone explain if there is a similar thing that can be done here in Australia?

Dear Cathy,

Thanks for all your constructive feedback.

In the US it does seem that Lonnie Scruggs and Ernest Tew seem to be the experts on the mobile home market.

To me it seems quite feasible that Mobile Homes could be "wrapped" and a mobile home does qualify for the FHOG in all the documentation I have read. However it does this with a lower entry cost.

Purchasing "notes" is really the same as purchasing the cashflow on a property that has already been wrapped from another party.

Therefore to really get started with this, I would suggest is to purchase Lonnies book "Deals on Wheels" and then look at an Australian Wrap package (Rick or Steves) to Australianise it for use here.

With your existing Mobile Home Park experience it wouldn't take long to make this really work and then make a product that you could market to the wider Australian community.

Some thoughts.