America is enthralled with the concept of “living small” and tiny home programs have taken over HGTV. So how does this related to RV parks? Few people realize that the only legal place where a tiny home can exist in most cities is inside an established RV park.
The story of the HUD seal
In 1976 HUD gained control over the manufactured housing industry and declared that any structure that was built without a foundation had to have a HUD seal to show that it was safely built to government minimum code. All mobile homes have this seal since 1976 and you cannot bring one into mobile home park without it (or the city will not turn your power on). It’s not open to negotiation or argumentation – you either have a HUD seal or it’s illegal in most parts of America. This one fact essentially precludes tiny homes from going into mobile home parks.
Why an RV park has a monopoly on tiny homes
Most tiny homes do not have a HUD seal as they are not built in factories, but rather are custom craftsmen creations. And the only place you can put something and live in it legally – in most markets – is in an RV park. RVs are not required to have a HUD seal although millions of Americans live in them full time. As a result, RV parks essentially have a monopole for the placement of tiny homes. In fact, the first tiny homes (typically units under 400 square feet) were developed for the RV industry as overnight units that could be rented out per day.
How this can change occupancy and revenue potentially
Many RV park owners are harnessing the power of the tiny home movement to gain year-round occupancy and more steady revenue. In northern RV parks – where business is seasonal – many owners are allowing tiny home owners to move in and provide cash flow throughout the winter months. In southern RV parks, owners are taking entire sections of their properties and making them into tiny home neighborhoods to allow for income they can rely on to cover their mortgage (which makes lenders happy). Of course, one benefit from this extra income stability is that it will allow RV park owners to re-invest in more capital intensive projects (building a pool, re-building the clubhouse, etc.) due to more confidence in their capability of making note payments.
What to watch out for
Inserting a greater number of tiny homes into your RV park can also have consequences you need to be prepared for.
- Make sure the city and county government is OK with the tiny home concept in your RV park. This is not one of those “easier to ask forgiveness than permission” moments. Once the tiny home is in it will be extremely expensive to remove, and you will damage your relationship with the local inspector. Don’t be shy – make sure it’s OK.
- Do not allow anyone to bring in a tiny home until you’ve seen a photo of it. While many tiny homes are extremely attractive and well-built, others can be one-off creations of people with zero building experience and can look absolutely atrocious. Once a home is in it’s hard to get it out, and you could be sued over it. So make sure you have a handle what is coming in to your RV park before it arrives.
- Congregate the tiny homes in one certain section of your property, if possible. While tiny home residents are great people, they have a different lifestyle than regular customers (who tend to stay for a week not a lifetime) and tend to want more of a “neighborhood” feel with like-minded folks next door. In addition, if you have a seasonal RV park, having them clustered together will be better from a utility repair, snow removal and general management aspect.
If you follow these three rules, you should have nothing but positives from your tiny home addition to your property.
Tiny homes can be an important contributor to your RV park’s income stability. They can have a huge impact on seasonal RV parks, offering year-round cash flow. And they’re a part of the future. Find out if such as concept would work for your property.