Costs query?

Hi all, we are very new to investigations into park home living.  We have viewed a site today and the sited cost of the home would be between 140k and 160k, however, the ex-factory price is half that?  Whilst we understand that there are costs involved in transport, landscaping the plot etc., are there other costs involved that effectively double the price of the finished home?  Sorry if we sound really naieve!

Hi emad and welcome to the forum

This is a bit of an old chestnut caused by manufacturers advertising their ex. works prices.

You must add in the cost of the land, the cost of development, the cost of the home and in the case of new developments or redevelopments, planning costs and all related costs in selling the properties ie. advertising, brochures, sales staff and the list goes on.

Traditionally, the 'bricks and mortar' prices would be made up as 30% the cost of the land, 30% the cost of building and the rest would be profit. Strange we never ask a builder how his costs are made up?

Hope you understand now.

Regards

Ed.

HI Ed

Much clearer and yes I agree, it is strange how we never ask a builder that very same question. 

Could you recommend the best magazine to purchase to give us some more tips and the best way to search for available plots?

Hi emad,

I wish you well in your desire of the park home life - we have found it to be by and large a very happy experience and would not dream of going back to living in conventional houses.
The Editors advice is very sound - I would just like to add the following:
When you come to consider buying a particular home sited on any park do the following:

• Meet as many potential neighbours as you can on your visits to the park - ask them what it is like to live on the park - are they happy - is all, by and large well?
• Research the park owners on the internet - who are they? - a large established park home company or an individual owner? - bear in mind that ownership of residential parks change hands at any time.
• Is the plot of the home you are going to purchase suitable? - location can be something that is not necessarliy considered when faced with the prospect of buying a lovely brand new park home - the question should be - is this position right for me? (too close to the main road - alongside the main car park - tucked into a corner and won't ever see anybody - etc).

Hello  Ed , in your  reply  about  costs, you  mentioned  builders  arnt  asked  about  costs ,  most  houses  are  freehold....you  dont  buy  the  land  then  pay  a  monthly  rent  on  it...I  realise  the  for  and  against  but  I  still  feel  there  are  grey  areas  here  on  this  subject   regards  evergreen

Hi Ed, you state the cost of the land etc, but when the owners expand their parks on their already existing land by getting planning ok and then, I am led to believe they actually get a discount of 25/30% off the actual price of a new unit if they purchase from the same manufacturer for all their new homes, a little "turf" and £1600.00-£2000.00 is theirs, then a 10% payday when someone moves on, not bad if you can get it! It does not encourage site owners to be helpful to all, it's the only business I know were you don't have to be pleasent and helpful to your customers, infact more circulation of people the more income!  
Winger arn't I.

Gandad 

Hello Gandad - I believe that your figures are a little off and that new park homes are sold for up to 100% more than the park owner will pay for them - less, of course, the costs of siting and connecting the services and a bit of landscaping. As an example - I could buy the modern equivalent of our home for around £50,000 from a major manufacturer but the same home already sited on a park would cost me around £100,000. This is one of the means by which park owners make enough profit to keep their business (which provides homes for us) afloat.

Hi emrys, I know for a fact that the figures i've quoted are true, maybe in some places you are right but this has been the situation where I live, We have already established good landlords and bad exist, so this is why homes are priced differently throughout the country.
gandad 

You have to take into consideration that whilst you can buy a lovely double unit from a home manufacturer for say £70k ex works - some are £140k plus some,        But where do you site it?

I understand getting planning permission on a nice piece of land is just next to impossible.
So you have to have it sited on a residential park with a 12 month residential licence issued by a council.

How much does a site cost to the park owner?
I have previously posted that the site I am on with 37 units changed hands for a reputed £800k, thats £800,000.
Thats some hefty mortgage.

Of course the park owner receives pitch fees from home owners,     but the park owner has to maintain the roads, lighting, drains, have fire safety inspections, insurance etc etc.

Its a business they run, so they not going to run at a loss....................
trouble is some park owners want to take the money and not expend where necessary.

Hi jah, emrys , 100% profit I have no problems with especially if money is ploughed into maintaining the park, but £1000.00 for a new home, not around here, second hand 20 year old are fetching £1400.00 and when you find the site owners are buying them back for around £70-£80 thousand and all they need is a lick of paint you find profits are massive. Don't get me wrong people need to make a profit and I would have no problem with the profits made here if the park was maintained without problems upon problems being thrown at residents, from all sides, remember i've lived here for over 20 years and I have seen many changes, they were not for retired/semi retired when I moved on. 

Hi gandad

Would you like to re-read your post as it doesn't make any sense to me! Perhaps you have the figures wrong!

Ed.

Hello Ed - I still believe that the owners profit would be closer to 100% than 50% - since this post commenced I cannot find any park home manufacturer publishing ex-works prices for park homes - after all, they know that, by and large, they can only sell them through the park owner.  However I did spot a holiday lodge that was being advertised through the manufacturer for <£75K ex-works when , if it was sited on a park, the owners could sell for around £140K plus.

Hi Ed,
Sorry if it sounds confusing, I tend to write faster than I'm thinking. Our site owner can purchase a second hand home (20 years old) for around £70-£80 thousand from residents leaving the park, for what ever reason moving into sheltered accomadation etc, they put a lick of paint on it and sell it for £1400.00-£1600.00. 
emrys mentioned site owners purchase a home for £50.000 and site it, then charge £1000.00 to a new purchaser, a 100% mark up, no problem with me but I know a £50.000 home placed on an a existing plot fetches £1400.00-£1800.00 where I live. Does that make it any clearer. Sorry again ed.
gandad

Hello  gandad  I  think  your  noughts  are  in  the  wrong  place, thats why  its  confuseing,  but  I  understand  where  your  coming  from, and  I  agree  with  you ,  regards  evergreen