May 12, 2026 Hospitality & Accommodation

What Goes Into a Caravan and Holiday Park Commercial Mortgage

Buying the caravan or holiday park you operate is a defining step for any park owner. At Ardent Capital Group we speak with operators about this kind of commercial property purchase regularly, so this guide sets out how a lender values a park, the deposit to plan for, and the way the freehold and the cabins are financed.

Ardent Capital Group is a specialist in commercial mortgages for caravan and holiday park operators across Australia. Our team can help you move from tenant to owner and give you clear lending advice on structure and strategy.

We arrange commercial property finance from $100K to $10M+, including complex specialised assets.
We have helped facilitate over $500M in funding across more than a decade for over 1,000 borrowers.
We work with banks and non-bank lenders, with options for owner-occupiers and investors.
We service Sydney, Melbourne, Brisbane, Perth, Adelaide, Canberra, Hobart and surrounding regional towns.

Reasons to own your caravan or holiday park premises

Location is what drives pricing power. Highway frontage, beach or river access, proximity to national parks and town centres, and room to expand all support occupancy and tariffs. Your fit-out is substantial and site-specific. Cabins, ensuite blocks, roads, underground power, water and wastewater plants, camp kitchens, pools, play areas, solar, EV chargers, reception and point-of-sale, Wi-Fi mesh, sheds and equipment tie value to the address. Domestic tourism, family travel and the grey-nomad segment give the sector resilience across cycles. Loan repayments convert into an owned asset, supported by land with redevelopment or subdivision potential in select markets.

Key drivers:

Ownership secures tenure for approvals, upgrades and branding without landlord constraints or unpredictable rent reviews.
Cabins and amenities have multi-year paybacks, best matched to long control over the land and services infrastructure.
The mix of tourist sites and permanent or annual sites shapes the income profile. Permanent residents give steady recurring income that lenders value, while tourist sites carry more seasonality.
Seasonal cash flow can be matched to the loan structure, with interest-only windows for works and offset accounts for peak-to-shoulder smoothing.
Rent escalation and make-good exposures fall away, while repayments build equity you control.
A freehold going concern can attract a higher exit multiple than a leasehold business.

Buying is one path among several. A short remaining headlease to council or Crown with uncertain renewal, a planned relocation, unresolved flood or bushfire risk, or a case where capital returns more if placed into cabins, amenities or digital bookings first all warrant a closer look before you commit. The decision rests with you, and it is the kind of trade-off we talk through with operators.

How much deposit a caravan or holiday park purchase requires

Deposit and LVR. Freehold going-concern loan-to-value ratios for a caravan or holiday park typically sit between 50 and 60 per cent, so a deposit of 40 to 50 per cent is common for this kind of specialised asset. A park with a strong share of permanent or annual sites can sit at the higher end of that range, because the recurring income steadies the trade a lender underwrites. Leasehold parks, where you buy the business on land you do not own, gear lower again and the loan term is capped by the remaining lease. In limited cases 100 per cent funding is possible where additional residential or commercial security supports the loan, and a broker can explain how that works for your position.
Loan term and structure. Terms commonly run 10 to 15 years with a bank and up to 25 to 30 years with a non-bank lender. Principal and interest reduces the debt steadily. An interest-only window can suit a build program or the low season, then switch to principal and interest as upgrades trade. Fixed, variable or split rates are available, and offset accounts help manage seasonality.
Cabins financed separately. Relocatable cabins and villas often sit on the land as chattels and are valued and financed apart from the freehold. That changes how the total package is assembled, and it lets the cabins run on a term matched to their own life rather than the land loan.
Security and serviceability. The property is the primary security. Lenders assess business financials, typically two to three years of P&L and BAS, seasonality patterns, EBITDA margins, forward bookings, average daily rate and occupancy, and the split of cabins to powered and unpowered sites. Valuation is on the going-concern trade, combining land, improvements and trading performance, not dollars per square metre. Serviceability is tested on interest cover or debt service coverage with headroom.
Owner-occupier treatment. Lenders generally view an owner-occupier purchase favourably. Pricing and policy on term can be more flexible than an investor purchase leased to a third party.

How a caravan or holiday park purchase is usually structured

Many caravan and holiday park operators hold the freehold in one entity, often a company or a trust, and lease the premises to the trading business at a commercial rent. A lender then reads the inter-entity rent as the serviceability line, so the debt service is clear on paper. The lease sets market rent and outgoings, with terms on CPI or fixed increases, maintenance and access to shared services.

Some operators look at holding the freehold in a self-managed super fund, where commercial premises can qualify as business real property and be leased back to the trading company at market rate. Inside super the gearing is lower, the documentation is tighter, related-party leases are scrutinised, and liquidity for the fund matters. Ardent structures and places the loan, and the tax, ownership and any superannuation detail is confirmed by your accountant and SMSF specialist before settlement.

What underwriters focus on

Business financials and seasonality: multi-year results, occupancy curves, average daily rate, cabin yield, forward bookings, weather impacts and insurance recoveries.
Serviceability metrics: debt service coverage ratios under base and downside cases, interest rate buffers, and cash buffers for the shoulder season.
Property and valuation: freehold title or leasehold term, flood and bushfire exposure, zoning and the caravan-park licence, environmental and wastewater compliance, and the condition of roads, amenities, services and equipment.
Site mix: the balance of tourist sites against permanent or annual sites, since the permanent base carries steadier income and the tourist sites carry the seasonality.
Deposit and equity position: cash, vendor terms, or the ability to leverage your equity in other property to reduce cash outlay.
Lease and occupancy: if the freehold is held in a separate entity, lenders test the related-party lease terms, rent coverage and market evidence.
Management strength: systems, booking platform, reviews, safety processes, staff depth and maintenance schedules.

A specialist broker who understands caravan and holiday park assets helps you reach the lender, valuation brief and structure that suit your situation.

A worked example

This is an illustrative scenario that shows the kind of situation we can assist with, and how the thinking might run.

Situation: A coastal park operator leases a 4.5-hectare site with 38 cabins and 140 powered sites, roughly a third of them held by permanent residents. The landlord offers the freehold going concern at $6.2M. EBITDA averages $1.05M with strong school-holiday peaks. Eight years remain on a headlease with council for a foreshore strip crossing one boundary.
Objectives: buy the freehold, fund 12 new cabins and an amenities upgrade, and keep repayments stable through the first two seasons after the works.
Options we would map:
- a 55 to 60 per cent going-concern mortgage secured by the freehold;
- additional residential or commercial security to lift gearing where the equity supports it;
- the new cabins funded as separate asset finance, since they sit on the land as chattels, interest-only during installation then amortising over their own life.
Structures we would consider: a unit trust holding the freehold with the trading company leasing at market rent; an alternative SMSF purchase for part of the site with a related-party lease at market rate; a small vendor-finance balance where it helps the settlement.
Likely lending shape: a 10 to 15-year bank term or a longer non-bank term, principal and interest with a 12-month interest-only period to complete the cabins, valuation on a going-concern basis, and covenants aligned to seasonal cash flow.
How we would approach it: we would map the ranges, structures and repayments and set them beside your growth timing, then take the file to the lenders that suit it. The figures above are illustrative, not confirmed outcomes.

Beyond the mortgage: caravan and holiday park finance

Asset finance: fund park vehicles, utility carts, tractors, mowers, laundry machines, pool plant, solar arrays, EV chargers, wastewater systems, boom gates, Wi-Fi hardware and POS terminals.
Fit-out and refurbishment finance: add or upgrade cabins and ensuites, amenities blocks, camp kitchens, accessible facilities, splash zones and playgrounds, arranged as caravan park equipment finance alongside or apart from the property loan.
Working capital: bridge shoulder-season cash flow, prepay insurance and power, bulk-buy linen and consumables, and place deposits with cabin manufacturers. This is the kind of working capital for a caravan park that keeps bookings and staffing steady when trade dips.
Business overdraft: cover weather-related cancellations or unexpected repairs without disrupting bookings or staffing.
Refinancing and debt consolidation: reset an ageing facility stack, align terms to asset lives and reduce total repayments.
Construction and renovation finance: staged draws for new cabins, roadworks, underground power and water treatment, with progress payments tied to supplier milestones.
Business or premises acquisition finance: buy the freehold going concern, acquire a neighbouring parcel for expansion, or buy out a partner or management rights.

Owning the premises can free equity for upgrades, and a refinance can consolidate multiple facilities into a clearer structure.

Getting specialist advice on your caravan or holiday park purchase

ACG focuses on commercial mortgages for caravan and holiday park operators. We arrange and structure finance around how you hold and occupy the property, then align the loan terms to your cash flow and capex program. We work across purchase, refinance and equity release, and we service Sydney, Melbourne, Brisbane, Gold Coast, Perth, Adelaide, Canberra and the regional towns in between. We have helped facilitate over $500M in funding across more than a decade for over 1,000 borrowers, with a focus on optimal financial outcomes.

This is the kind of purchase where the structure and the strategy matter as much as the rate. If you are weighing up a caravan park property loan, we would be glad to talk it through.

Common questions

How much deposit do I need to buy a caravan or holiday park freehold?

Freehold going-concern deposits usually sit between 40 and 50 per cent, with LVRs of 50 to 60 per cent for this kind of specialised asset. A park with a solid base of permanent or annual sites can sit at the higher end, since that recurring income steadies the trade a lender underwrites.

Will lenders value my park as a going concern or just the land and buildings?

Many lenders instruct valuers to assess going-concern value, combining land, improvements and trading performance. EBITDA, occupancy, tariff structure, cabin mix and asset condition all feed into the valuation, which then drives the LVR and covenants.

Can I buy the freehold in my SMSF and lease it to my operating company?

Yes, where the property qualifies as business real property and it is leased wholly and exclusively to a business at market rent. Expect lower gearing, a tighter documentation process and a need to manage liquidity for the fund. Your accountant confirms the super and tax detail.

How do lenders treat seasonal cash flow and upgrades?

They underwrite on multi-year results and typically review forward bookings. Structures can include interest-only during construction or the low season, then principal and interest once upgrades are trading, provided serviceability holds under buffer rates.

Can I include new cabins and amenities in the finance package?

Yes. Cabins, amenities and infrastructure can be funded as construction or asset finance with staged draws against invoices and progress reports, either alongside the property loan or as a separate facility. Relocatable cabins are often financed apart from the land as chattels.

What if the site includes Crown or council leasehold areas?

Fewer lenders will consider leasehold, terms often align to the remaining lease tenor and gearing trends lower. Freehold title is generally preferred for mainstream bank appetite.

How do flood or bushfire overlays affect approval?

Lenders will seek reports and evidence of insurability and mitigation. Exposure can influence valuation outcomes, LVR and conditions such as minimum insurance levels or additional works.

Written by

Nick Chong

Managing Director, M.AppFin, Dip. Mortgage Mgmt

Nick holds a Bachelor of Agricultural Economics, a Master of Applied Finance and an Advanced Diploma in Financial Planning. He founded Ardent Capital in 2016 after more than a decade in financial planning and mortgage broking. For the past ten years he has led a team of finance specialists, mortgage advisers, brokers and credit analysts, all working to secure optimal outcomes for clients and always acting in their best interests. The team brings both a qualitative and a quantitative approach to every deal.