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Assuming everything on the trailer is in decent shape, you should be fine to use the trailer as it is.....I would personally invest in new bearings and grease and a set of new tires and rims. You would probably be under $100 and lots of safety there. On building a camper you will need to watch...

My father used to build a few coolers back in the 50's out of plywood when he was in the army. Plywood interior and exterior with a few layers of cardboard in between for insulation. He would paint and caulk the interior so it was water proof and he claims it would keep beer cold for a long...