Caravan Parks
Caravan Park finance is specialised industry lending. We have the experience of funding many motels and caravan parks over the years to help you make the right decisions.
Caravan Park Finance
Caravan Parks
The purchase or refinance of a caravan park freehold or leasehold should be assisted with industry professionals at all times. Having the right team around you will ensure that you also have the best outcome when you are looking to source finance. Industry professional lawyers and accountants will guide you through the due diligence that you need to undertake to protect your purchase.
Leasehold Business – Lessee
This is the most popular model for purchases and also for finance too. The lessee will operate the motel fully and pay the annual rental to the freehold owner. Lease terms are typically around 30 years at their initial creation and can be ‘topped-up’ between both parties when agreed. The leasehold operator has full control over the business on a day to day basis including tariffs and occupancy and is able to maximise their income. Some leasehold owners still appoint a manager, but on most occasions this would be run by a business owner living onsite. Maximum lending values for this type of purchase are 50% and of course driven by affordability and business skills.
Freehold Owner – Investor
In this instance, the land and the buildings are purchased/owned by an investor. Much like commercial real estate they will be the landlord and rent the building. They will have no interest in running the business and will just receive a rental income. They are responsible for all of the structural repairs to the building but have no interest in the running of the business. Rental income can be subject to CPI increases and or a rent review. Banks typically can lend up to 65% against this type of investment depending on the location and the quality of the investment.
Freehold Going Concern – Owner of everything
Freehold going concern operators own both the land and buildings and the business as well. They pay no rent and receive all profits after operating costs have been accounted for. Lending values for this type of business are a maximum of 65% again driven by affordability.
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