RV Park Investment Articles

The Presidential election is over and it’s time for RV park owners to harness the power of Biden’s initiatives to make money. And, from all appearances, there a number of potential pushes by the new administration that can be a profitability driver for RV park investors. So what are the opportunities coming with the new administration?

Nobody buys an RV park for cash – at least not anyone trying to maximize their yield on the investment. While buying without debt may make you feelsafer since there’s no risk of foreclosure, the truth is that the ability to obtain sensible debt is what makes real estate the #1 source of wealth in the U.S. Debt allows you to buy RV parks that are roughly 5 times bigger than you could with just cash, and then the spread between the interest rate and the cap rate is what allows you to hit 20%+ cash-on-cash returns given the right ingredients. So how do you obtain financing on an RV park?:

An RV park is, by definition, an income property – it’s value is based on how much income it produces. Some sectors of real estate offer low returns and others higher. But to really make impressive returns a property has to provide some simply tools to drive the numbers to a high level. And RV parks offer these tools. So what are the three steps to making a huge return with an RV park?

RV parks, like all real estate, offers higher yields in situations of higher risk. But this can also serve as a buying opportunity if you can find methods to lower the risk while keeping the higher yield. So how can you have the best of both worlds with an RV park?

There are basically three types of RV parks in the U.S. today: “overnight”, “destination” and “extended stay”. Each has a different niche, and all niches are not created equal, so the question is which of these three is best positioned going forward? Here would be our analysis.

The RV park business model is fairly simple, yet too many investors don’t understand the mechanics and therefore miss the entire opportunity. With traditional investing faltering as a result of Covid-19, alternative investing is far more profitable – but only if you understand how it works. So here’s the plan to make money with an RV park.

Due to their locations, many RV parks – but not all – receive their drinking water supply from a well. And there is a huge amount of false assumptions that most Americans have regarding these wells and how they work, as well as what can go wrong with them. So what’s the truth about RV park water wells?

Attorneys can be an important piece of your arsenal of weapons when you have a problem or in deciphering a complicated contract. But they can also be a disaster when it comes to making RV park deals if you cede control to them. Here’s how an attorney can go from a help to a hindrance with an RV park purchase if you don’t keep adequate controls over them

When you’re looking at buying an RV park, one of the key ways to develop sizable deal flow is to work with the various industry brokers. Of the deals we’ve bought over the past 25 years, the majority came from brokers, with the balance a mixture of on-line listings, cold calling and direct mail. So how can you do a better job of developing a broker base and increase your deal flow with them?

RV parks and mobile home parks used to be the same thing. About a half-century ago. But since that time, both have created their own business model with little shared between the two. And one big difference is that many RV parks have a 2-point higher cap rate – but potentially for good cause. However, this issue can be used to your advantage if you buy the right RV park.

Most Americans will spend thousands of dollars per year – and hundreds of hours – to improve their appearance and attractiveness. Yet virtually nobody spends much time thinking about how to appeal to their local lender. Indeed, if you want to buy an RV park it’s vital that you know how to be attractive to banks in a manner that will make them want to make the loan. So what can you do to increase your attractiveness?

There are many interesting tiny home designs being provided around the world. This article on MSN recently showcased some of the best we’ve seen. So will these be showing up in RV parks in the U.S. in the near future? The truth is that some already are.

The Covid-19 pandemic has been the key news story of 2020, having thrust the U.S. economy into a tailspin with self-quarantine mandates and reduced or closed non-essential businesses. And, in many ways, it has created a new narrative on many industries, either for the good or the bad. Assuming that these type of situations may occur again even once the Covid-19 issue is solved has changed many business models permanently, and it’s important to look at the long-term impact the pandemic has had on the RV park industry in particular.

Negotiating to buy an RV park can seem awkward – it’s not a skill you use every day. That being said, it’s an extremely important skill to have as it can create a ton of value if you get the RV park for less than you would have otherwise. So how can you harvest this skill and make yourself the best negotiator possible in a short amount of time? Here are some suggestions.

During the stock market collapse and the resulting Great Depression of 1929, many successful investors fled to Europe to escape verbal abuse and public shaming by those who had lost everything. It was a common theme of F. Scott Fitzgerald novels that would feature rich stockbrokers and investors hiding out in foreign resorts while Americans were standing in food lines. And Covid-19 has created a similar environment in the U.S., in which many real estate sectors are destroyed yet RV parks are actually showing record performance numbers. But, as F. Scott Fitzgerald would also say, “it happened gradually and then suddenly” (The Great Gatsby) and the wheels were in motion on what is happening in America right now years ago, and the Covid-19 pandemic was simply the straw that broke the camels back. It’s all about megatrends – those huge shifts that influence every inch of the U.S. economy. Here is what was already setting the stage:

In many parts of America, the number of Covid-19 cases has peaked and is actually going down. Meanwhile, the U.S. government is working aggressively to develop a vaccine to guard against the virus. Whereas the key question in March was “what will Covid-19 do to the RV park industry?” the new question is becoming “what will the end of Covid-19 do to the RV park industry?” So what’s the answer?

ABC News just reported that RV parks are flourishing while all other types of travel and lodging are collapsing.. So why are RV parks doing so well when hotels, airlines, rental car companies and cruise ships are all on the brink of bankruptcy? There are many reasons.

Plumbers are popular because they deal in subjects that nobody wants to talk about or get involved with, namely the realities of water and sewage. However, for all RV parks it’s a fact of life that one of your most important attractions to the customer is access to working water, sewer and electricity (and let’s not forget internet in some better properties). So how can you make hooking up the utilities easier and more pleasant for both customers and yourself?

A common question for most investors is whether it’s more profitable to build an RV park from scratch or to buy an existing RV park. There are many issues to consider on this topic, but here is a basic explanation of the good and bad aspects to both.

Some people consider the supply of RV parks in the U.S. to be completely fluid – that you can basically build them anywhere. I get at least a call a week from somebody wanting to build an RV park on some raw land somewhere. But the reality is that successful RV parks cannot be built with abandon and that, in many markets, the supply of RV parks is effectively static. So why can’t you just build an RV park anywhere?

The typical RV park purchase is one in which the buyer buys the RV park asset from the seller, using a survey and property schedules to delineate what comes with the price tag. However, some sellers will try to convince you instead simply to buy the stock in their LLC, Inc. of LP – whatever the entity formation – as a method to attain the same goal. Sadly, this is not the case. And, in general, you should never buy the stock in an RV park instead of the basic asset.

One of the unique attributes of owning an RV park is the opportunity to self-manage. Many owners fine this to be their #1 attraction to the idea of buying an RV park: the ability to live in a beautiful setting far away from the city, with the chance to work both indoors and outdoors, with a myriad of entertaining roles and the freedom to spend time as they wish. So how would buying and living in an RV park work? Here is a basic overview.

Studies suggest that the average RV owner spends around 23 nights a year in an RV park. And many of these are in microbursts of 2 to 3 nights at a time. Studies have also found that the average RV owner goes on a weekend trip that is roughly 4 to 5 hours from their home –a radius of roughly 150 to 250 miles. So this makes the population within a 250 mile radius an important issue to consider.

The United States is currently in the middle of three catastrophes at one time: 1) Covid-19 2) economic disaster brought on by the quarantine and 3) urban unrest. But the end result is that these three events are actually pushing RV park occupancy ever higher. In fact, many Americans who did not even own RVs before the crisis began are now buying them up and hitting the highway to escape what they feel to be unsafe housing options in the cities. In fact, some RV dealerships are showing sales 30% to 50% higher than before any of this began. That makes RV parks one of the greatest contrarian investments in a troubled America. But why are RV parks doing so well?

When you’re trying to buy an RV park, it seems like they are a scarce commodity. When you are trying to sell one you think they’re everywhere. The truth is somewhere in the middle. However, there are many outside observers who have a vested interest in convincing you of these polar opposites. So what’s the truth about RV park supply in the U.S., and what does it all mean?