So you want to buy a holiday park / Caravan Park?
A holiday park is an umbrella term referring to parks or areas that house caravans, cabins, camp sites and mobile homes for short-term let, permanent use, or a mix of the two.
Holiday parks are increasingly innovating and diversifying their space; not just with powered sites, ‘glamping’ rooms and ensuites but with resort-style facilities and varied services.
What are the purchasing models?
Like motels, holiday parks can be bought outright in an agreement known as ‘Freehold Going Concerns’, or in a ‘Split’ model that involves a long-term managing lease.
In the freehold model, an owner-operator rules the roost, covering all fees, administration and maintenance as well as marketing, making bookings and keeping all profits.
In the split arrangement, it is the leasing party’s responsibility to operate the park, doing all they can to increase profit-by-occupancy, and pay the owner an annual rent. The rental agreement may include a review clause but usually increases by CPI each year. The owner becomes a passive investor in this agreement, responsible only for structural land/property maintenance.