Some RV parks are open all year. Others close in the winter and only stay open in the warmer months. But does that mean you can only buy those properties during the summer season? The truth is that many seasonal RV parks are bought and sold in the frigid winter months, but there are some tricks you need to know if that’s your goal.
You can often get the best deals during the off-season
When it’s cold outside, and there’s no money coming in and nothing to occupy your time, moms and pops are more inclined to sell. They fantasize about warmer weather and all that fun they could have on the beach. As a result, you will get your best pricing during the off-season – it only makes sense. In fact, as a general rule, there’s about a 10% price differential between buying a seasonal park in the winter instead of summer. The same is true of buying a southern seasonal park in the winter, but the impact is not as great as most southern parks still have some degree of clientele even out-of-season, and there’s something less depressing about hot temperatures than below-zero in the snow.
But diligence can be more difficult
It’s hard to evaluate a property physically when it’s buried under snow. There is still much that can be done regarding due diligence, but some require physically seeing the property, and that’s just not going to happen. At some point in the due diligence or financing contingency, you’re going to have to have a time when the snow melts so you can get an idea of the condition of the roads, the lots, the sidewalks, the common areas, etc. Given the time frame of diligence and financing, you should hit a period in which this is possible before time runs out. You can also build into the expectations of the seller that there may have to be an adjustment in the price if it turns out that things don’t look as promised when it all melts off.
Like a pilot flying by instruments only, you need to focus on the facts
Most of buying an RV park revolves around the financials, with the revenue, expenses, and net income of higher priority than any other feature. In fact, virtually all the necessary items to confirm during diligence can be done remotely by phone, email, or third-party report. Most buyers only visit the actual RV park twice from contract to closing. So snow on the ground is not really that big a deal as far as getting the job done. You might also say that it does give you the chance to see the property at its most frozen to make sure it is properly winterized and how that part of the business is conducted.
It also gives you time to get ready before the action begins
One big benefit of buying an RV park in the off-season is that it gives you plenty of time to prepare for the first season under your ownership. That includes:
- Selecting your software system.
- Choosing a manager (unless you are planning to self-manage).
- Re-naming the property (if that’s your strategy).
- Coming up with a new logo.
- Perfecting your marketing plan.
- Understanding how to start up and maintain all the amenities.
- Make contacts with those who can send you clients.
- Learning all the local attractions and days/hours of operation.
The bottom line is that it’s really a benefit that allows you to get a stronger start with plenty of preparation.
You can definitely buy an RV park in the off-season. The negative aspects are more than offset by the positives. Don’t hold back on looking at northern RV parks simply because of the time of year.