How to Buy a Caravan Park: The Finance and Investment Guide
How to Buy a Caravan Park | Switchboard Finance
Accommodation Finance
Caravan Park · Freehold or Leasehold · Going Concern
How to Buy a Caravan Park: The Finance and Investment Guide
Banks see a caravan park. The lenders who fund them see a business. This is how to buy one as a self-employed Australian, from the tenure choice that sets your gearing to the going concern valuation that sizes the loan.
Quick Answer
Buying a caravan park means financing a trading business, not a holiday van. What you can borrow turns first on tenure: a freehold going concern gears higher than a leasehold park business, and the going concern valuation, not the asking price, sizes the loan.
Buying a caravan park: are you buying property, or a business?
Run a caravan park through a lender's eyes and the first question is not the view or the sites, it is the income: how much is contracted permanent rent and how much rides on the tourist season. That read shapes who lends and how much, because a park is valued on what it earns and how securely that income is held. So the real question behind "is this a good buy" is whether the park trades well and how secure your tenure is.
The income engine is the permanent versus tourist site mix: long-term and annual residents give a steady base, while cabins and holiday sites add seasonal upside. A valuer reads that blend the way the park actually trades through the year, not at its peak week. Get clear on the trade first, then on how it is funded through caravan park finance, which is a going concern business loan rather than a home or holiday-van loan.
Which caravan park model fits you?
Tenure sets the gearing, so the first fork is how the park is held. The split between freehold land versus a leasehold park business decides how much a lender will advance, how long the term runs, and whether you are buying an asset that grows or one that winds down. Pick the priority that matches you to see how each model gears.
Match your priority to the model
Freehold going concern
You own the land and run the park, secured over land plus business against the going concern valuation. It gears the highest, around a 30% deposit on a freehold park, indicative and varies by lender, and it is the only model that carries capital growth because you hold the land underneath the business.
Highest gearingMost first parks are bought leasehold for the lower entry cost, then owners step up to a freehold going concern when equity allows. Neither is automatically better. The right model is the one that matches your capital, your appetite for hands-on operating, and whether you want the land value under the business.
Permanent or tourist: what makes a park's income fundable
The same gross takings can value very differently depending on how durable the income is. A steady base of permanent and annual sites reads as low-risk recurring income, while pure seasonal trade is read more cautiously. This is where the permanent versus tourist site mix stops being a lifestyle question and becomes a financing one.
Where a park reads as fundable
- A steady permanent or annual base under the tourist income
- Adjusted net profit a valuer can verify from the books
- A long lease with renewal options, if it is leasehold
- Documented occupancy across the seasons, not just peak
Where a park deal stalls
- Income that is all seasonal, with no permanent base
- Cash takings that cannot be verified or reconstructed
- A short lease near expiry with no path to renew
- Deferred maintenance a valuer will mark down
On a leasehold park the lender secures against the lease rather than the land, so it needs a deed of consent from the freeholder and sets the loan term inside the years remaining. Where this commonly lands is a park with a solid permanent base and a clean set of books clearing finance comfortably, while an all-seasonal park run on undocumented cash struggles, even when the asking price looks like a bargain.
How a caravan park gears, and what it takes to get in
A park is valued on the business, not the bricks. A valuer takes the adjusted net profit times a yield multiple, illustrative, reflecting location, condition, seasonality, occupancy and the income mix, which is why two parks with identical takings can land at very different numbers. As a working guide, expect around a 30% deposit on a freehold park and around 50% on a leasehold, indicative and varies by lender. These valuation methods follow recognised business-valuation standards set by bodies such as the Australian Property Institute.
Two more things shape the deal. First, the loan is driven by the going concern valuation, not the asking price, so if the valuation lands under the contract the gap is yours to cover, which is exactly why the numbers get pressure tested before you commit. Second, equity in other property you own can be used as supporting security to bridge the deposit gap, lifting effective gearing closer to the full price without overstretching serviceability. Park lending is full doc, no low doc on parks: a full financials assessment, supported by your accountant.
Switchboard Finance arranges secured, business-purpose credit and does not arrange equity or financial products. Where a deal involves raising investor equity, a co-ownership scheme or a unit trust, that interest is licensed-partner territory: we arrange the secured credit and introduce the right partner for the equity side. Where this commonly lands is a buyer using their own home equity as support rather than a formal equity raise, which keeps the structure simple.
When a buyer is genuinely short the last slice, a vendor sometimes carries part of the price behind the senior lender through vendor finance, and a retiring owner can plan a staged handover using partial sale and succession. Pure timing pressure between exchange and settlement is a different job, handled with private lending or a caveat loan, not the purchase facility. The same going concern logic runs through motel finance and pub and hotel finance, alongside the blended deal in management rights finance, all gathered under the accommodation finance hub. Owners who already hold a park can release capital without selling through equity release and refinance.
A caravan park is a business sold as a going concern, and tenure sets the gearing before anything else. A freehold going concern gears higher and carries the land value, a leasehold park business is cheaper to enter but a diminishing asset, and either way the income mix and the going concern valuation, not the asking price, decide what a lender will advance.
Key takeaway: settle on tenure and income mix first, then build the file around the going concern valuation, because that is the number the loan is sized against.Frequently Asked Questions
A caravan park can be a sound investment when it is treated as an operating business rather than a passive property. As a working guide, freehold going concern parks tend to return from the high single digits to the high teens, while a leasehold returns more but is a diminishing asset with no land growth. That is a different question to buying a van or cabin to put on a park, which depreciates like a vehicle, and a freehold going concern is the only model that carries capital growth.
Buying a caravan park typically takes around a 30% deposit on a freehold park and around 50% on a leasehold, indicative and varies by lender. Equity in other property you own can be used as supporting security to bridge that gap, which can lift effective gearing closer to the full purchase price. The exact figure depends on the park, the income, the tenure and your experience, so treat these as ranges rather than a fixed offer.
A freehold going concern is generally easier to finance and gears higher, because the lender holds the land underneath the business. A leasehold park gears lower because the security is only the lease, and the loan term is capped inside the remaining lease with a deed of consent from the freeholder. The trade runs the other way on yield: a leasehold is cheaper to enter and tends to return more, but it is usually a diminishing asset with no capital growth.
Lenders value a caravan park on the business, not the bricks, taking the adjusted net profit and applying a yield multiple, illustrative, that reflects location, occupancy, seasonality and the income mix. The going concern valuation drives the loan, so the contract price and the valuation need to line up, and if the valuation lands under the contract the gap is yours to cover. Two parks with the same gross takings can value very differently.
Caravan park finance is full doc, no low doc on parks. Park lending is a going concern business loan assessed on full financials and a business plan, a different product to the property-secured low doc loans used on standard residential and commercial property. Expect to provide properly adjusted figures, supported by your accountant.
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