What it costs to buy a caravan park in Australia
Caravan parks are the quiet giant of accommodation investing: a $3 billion revenue sector growing 7% a year, with institutional money buying the big ends of town while regional parks still trade at owner-operator prices. Here is what they actually sell for and how the deals are structured.
What parks sell for
| Structure | Price (current listings) | Advertised returns |
|---|---|---|
| Freehold going concern, regional | $1.7m to $5.4m | roughly 10 to 16% |
| Leasehold (business and lease only) | from ~$900,000 + stock | 20 to 35% |
| Institutional-grade freehold | $5m plus, often by tender | 6 to 7.5% cap rates |
Recent comparables tell the story: a Central West NSW park with 42 new cabins asked $4.35m against $704,000 net profit, a 16% return, and sold. A north Queensland park at $5.39m advertises over $520,000 net. Parks are valued as a multiple of adjusted net profit, and the multiple follows income quality: cabin income beats powered sites, permanents provide annuity income while tourist sites earn more but seasonally, and expansion land is optionality the next buyer pays for.
Freehold or leasehold
Freehold going concern buys the land, buildings and business: the fullest control and the bankable asset. Leasehold buys the business and the right to run it: roughly a third of the capital for double the percentage return, but the asset diminishes as the lease runs off, so the years remaining on the lease are the real thing being bought. Both are legitimate; they are different products.
How park purchases are financed
Freehold parks are property-backed lending: indicative appetite runs around 70% of the going-concern valuation, so plan roughly a 30% deposit plus costs. Leaseholds are goodwill lending: expect around half down. The rule that catches buyers: the loan is sized off the lender's valuation, not your contract price, so paying above valuation means funding the whole gap yourself. Equity in other property you hold can bridge deposits, and as a working rule property-backed lending prices around 6% to 9% p.a. A $3m freehold at 70% needs about $900,000 of equity; if part of that sits in your home or another property, the deal can still be structured. Talk to us at business acquisition finance or read the property-backed lending guide.
Frequently asked questions
How much does a caravan park cost to buy?
Current freehold going-concern listings run $1.7m to $5.4m for regional parks, with premium and institutional assets above that, usually by tender. Leasehold parks start under $1m plus stock.
What return does a caravan park make?
Regional freehold going concerns advertise roughly 10 to 16% returns on net profit; leaseholds advertise 20 to 35% but the lease is a diminishing asset; institutional-grade parks trade at 6 to 7.5% cap rates.
What deposit do I need to buy a caravan park?
Indicatively around 30% plus costs on freehold, and around half on leasehold. The loan sizes off the lender's going-concern valuation, not the contract price, and equity in other property can bridge the deposit.
Freehold or leasehold caravan park, which is better?
Freehold is the bankable, appreciating asset at a lower percentage return. Leasehold is a third of the capital at double the return with a wasting lease. They suit different buyers rather than one being better.
From listing to structured deal
Tell us the park and the price and we will come back with the deposit, structure and weekly numbers, usually within a day.
This article is general information only and not financial, credit, or tax advice. Ventas Asset Lending is a finance broker, not a lender. Approvals are subject to lender assessment. Consider your own circumstances and speak to a qualified professional, including your accountant for any tax questions.