Static caravans and lodges are a unique product, when purchasing your holiday home you will be presented with a 'total' purchase price. This price will comprise of three different components; 1) The static caravan that you have purchased - you own this. 2) The plot of land that the static caravan will be positioned on - you do not own this. 3) The desirability factor and location - you do not own this. For example, a consumer purchases a brand new static caravan at a total purchase price could be £69,999. Component 1; THE STATIC - At new, the static is worth £20,000 and it has a life span of 15 years. It will depreciate in the first year as it is now classed as 'used' and will not have the same net worth as a brand new one. As the static becomes older, it's value will depreciate based upon it's age. Typically this will depreciate by a 'chunk' in year one, then on a curve with each successive year loosing slightly less than the previous year until at year 15 it is worth just a few hundred pounds. For example; Year 1 - Minus £8,000 Net Worth £12,000. Year 2 - Minus £1,200 Net Worth £10,800. Year 3 - Minus £1,100 Net Worth £9,700. Year 4 - Minus £1,000 Net Worth £8,700, and so on. Component 2; THE PLOT - A static will be sold and placed upon a piece of land owned by the operator (park). Each plot within a park will have a 'rental' value, in this instance we will use the figure of £30,000. So for the consumer, the total price is now the static + the plot = £50,000. The plot will be sold on a lease agreement, often over 15 years. The plot will depreciate in a straight line depreciation scheme over the term of the license; Year 1 - Minus £2,000 Net Worth £28,000. Year 2 - Minus £2,000 Net Worth £26,000. Year 3 - Minus £2,000 Net Worth £24,000. Year 4 - Minus £2,000 Net Worth £22,000, and so on until at the end of the license, it is worth nothing. The IMPORTANT thing to remember about the plot is the fact that you DO NOT own the land, you have purchased a lease. So at the end year 1 the static & plot would be worth an estimated £50,000. Year 2 £46,800, Year 3 £33,700, Year 4 £30,700 and so on. These figures are only applicable at a 'retail value' if the static were to be sold 'on-site'. Component 3; THE LOCATION - The park or piece of land will have a desirability factor, no different to the location of a house. The simplest way to explain this is with 2 identical houses, both 3 bed detached and built exactly the same. One is located in Carlisle, the other on Park Lane, Mayfair, London. Despite being exactly the same they have a desirabilty factor based upon their location. In our above example we are using a location factor of £19,999. This factor is quite unique, because until 'bricks & mortar' the factor is governed by the park operator (how popular is the park) and by the length of the lease remaining. IMPORTANTLY, you should consider that you DO NOT own the desirabilty factor as it is a demand factor often governed by the general public. Let us put that into the above example; The customer purchases the static at £69,999 but then 6 months later a new park operator opens up a park 15 miles away with every conceivable amenity on it that a person would want. This can create a demand factor for the new park that could have a detremental effect on the park that the customer has just spent £69,999 to holiday in. So when it comes to valuing a static, there are two options, firstly to sell the static 'off-site' - this then means that it is JUST the statics net worth as there is no lease or location factors to be taken into account. Second, to sell the static as a 'private sale on-site' - this will take into account the remaining lease and the location factor.