There are several options when letting a holiday caravan or lodge, these are:
- Letting the caravan or lodge via the park’s subletting scheme
- Letting the caravan yourself to the public
- Letting the caravan on an informal basis to friends and family
One of the key questions you should ask is why sublet your caravan in the first place. We will look at the advantages and disadvantages of subletting regardless who is managing it.
Advantages of subletting
Income & reduced costs of ownership
This is pretty much the only benefit of subletting, but it’s a big benefit. Owning a holiday caravan or lodge can be expensive. There is the cost of buying the unit in the first place and this can range from a few hundred pounds to a up to a quarter of a million depending on location, style and size etc. Unlike a house these units depreciate in value over time. Many parks offer a 10,15 or 30 year licence or lease to allow your caravan on their park.
Once you have purchased your caravan or lodge there is the pitch fees which can be expensive – usually £2000 - £5000 a year. Then you have rates, water, gas, electric, insurance and TV licence etc… which all add up.
This makes the offer of being able to offset some of the costs and initial outlay very attractive as letting your caravan or lodge can generate a great source of income. A weekly rental of a caravan or lodge in peak season can range between £500 and £2500 a week.
Disadvantages of subletting
There are several drawbacks of subletting your holiday caravan or lodge:
Loss of exclusive use
Possibly one of the largest drawbacks of letting your holiday caravan is that you do not have complete freedom as to when you want to use it. You can, of course block out weeks for your own use but you can’t just decide to use it last minute as it may already be booked or cleaned ready for the next rental guest.
This drawback should not be under estimated as you have to ask yourself the question about why not just rent yourself rather than having significant amounts of money tied up in the caravan that you can’t use whenever you wish.
It’s sad to say but rental customers will not look after your caravan or lodge in the same way as you do. That’s not to say every customer will go out of their way to damage your holiday home but things will get damaged and worn out much faster on a rental caravan than one that’s just used by you. Even if you restrict letting friends and family use it on the basis that they leave it in the state they found it. One person’s vision of clean is very different to another and don’t be fooled by their home being immaculate. For some reason cleaning your holiday home to a high standard at the end of a holiday with possible a long journey home will not be the same standard they apply to their own home.
Letting your caravan using a park operators subletting scheme
Its worth pointing out that every park operator offers a different level of service, fee structure and restrictions to enter your caravan into their scheme. We have written this guide to provide a generic overview of what is typically covered in these schemes.
Advantages of using a park operator scheme
This is the biggest attraction of using a park operators scheme is that it can be very convenient. They have staff on site, often they will deal with the customer and arrange for maintenance and cleaning. Some parks offer what is called a fully managed scheme which means that they will take care of the advertising, customer service, key handling and cleaning. This means there is not much on a day to day basis that is required for the owner to do. The park operator will often set up an account where your bookings are paid in and this can be used to offset the cost of owning your caravan. In theory you can end up with a profit to contribute to the replacement of your holiday home.
Unless you live close to your holiday home location it will be difficult to manage key handover, checking in and checking out customers as well as the cleaning. Most likely you would be reliant on local people to manage this for you and as with all things your customers will be getting the service offered by them.
Looking after your caravan
It can be argued that the park operator has a vested interest in making sure your caravan is looked after by the customers when they rely on it for their own income. To some extent this is true but depending on the deal it could mean they either charge you for repairs or penalise you if your caravan is not available for rental – check the small print.
Disadvantages of using the park operator schemes
You will find that it can be pretty costly to rent your caravan or lodge through the park scheme. Commission fees range up to around 40% of the booking fee. That sounds a lot, and it is however, the key thing is what they do for their fee. Often the higher fees will cover all of the cleaning costs, key handling and customer service as well as the marketing and advertising costs. Large travel operators such as Hoseasons will not be very interested in marketing one caravan they prefer to have an arrangement with the park operator to rent their entire fleet of rentals.
Other park schemes will offer less for a lower amount e.g. 15% to manage the key handling, emergencies and arranging a cleaner (who will charge a fee). It is an industry where everyone wants a slice of the income so you need to factor these costs in when deciding whether to buy and sublet your caravan or lodge.
You will find that the number of weeks your caravan is booked out for makes a huge difference to the income. Many park operators will require exclusivity in marketing your caravan, you will also be restricted as to when you can use it too. You need to know that this trade-off is worth it in terms of rental income. Check and validate the claims to average bookings you will expect. Our experience shows that for caravans you will be able to get a good rate of bookings for the peak season e.g. summer holidays and some school holidays but outside of that the rates will drop significantly. Lodges will enjoy a slightly longer season depending on the market e.g. couples or families.
When working out your numbers you should get as much information as possible about the number of weeks booked for other units similar to yours. If you decide to allow short breaks this will help increase the number of bookings but you may lose out on weekly bookings.
The age of your caravan will be a limitation for many schemes. Operators who have say a five star rental fleet will only want caravans or lodges on their rental fleet that are new or up to 10 years old. Not only is this a factor to consider if you plan to rent out you caravan but will also have a big impact on reselling your caravan. It will be harder to sell your 10 year old caravan when it can’t be sublet through the park owners scheme.
Letting your caravan or lodge yourself
This is only really an option if you live very close to your caravan or have very reliable people on board who do. It can get very difficult if the person you have entrusted with key management is ill or unreliable.
There are some advantages in letting the caravan, if it’s an option, yourself
The biggest benefit is that all the rental income will be yours. Although, you need to check the terms and conditions of the park operator as often there are restrictions around subletting or a fee payable to them for permission.
With park operator fees ranging from 20% - 40% the additional income obtained by managing the process yourself are clear to see.
You have more control over the amount you charge, who you let use your caravan and which weeks you keep it free for your own use. This can be particularly pertinent if you are primarily letting your caravan out to friends and relatives. You can also, in theory, dictate the terms of booking e.g. self-cleaning. You would be the key contact as well so you can determine the service offered as well as keeping the costs under control.
The main drawback is hassle. You will have to manage everything yourself including the advertising, marketing, cleaning, key handling etc. If you do not live locally then this could be a costly and irritating process.
You will probably want to market your caravan or lodge. You can either do this by paying for listings on sites like this which is just a flat annual fee or you can use an agency who will charge a commission on each and every booking. Some agencies will charge up to 25 – 30% which will eat into your income significantly but they will take care of the payments and booking process.
We hope you have found this guide useful but if you have anything to add please do let us know