There are a lot of great RV park investments to be made in the U.S., but even the greatest deals of all time can easily be destroyed by buyers who make some fundamental mistakes. Some of these are the result of bad business habits, and others from simply lack of knowledge. But they can all derail your financial independence and make you regret what you did. Here they are:
1) Bad Manager Selection. The most important hire in any RV park is the manager. And the selection of a weak manager will lead to every possible problem and result in missed budget numbers for occupancy, revenue and expenses. Property condition will also falter, and social media reviews will drop from 5 to 1 star. It can literally kill your business, and rapidly.
2) Refusal to Fire the Bad Manager. If you are unfortunate enough to have a bad manager running your business, then refusal to step up and fire them is equally terrible. Anyone can make a hiring mistake but letting it fester is a disaster. There’s an old saying “it’s easier to change people than to change people” – which means your role is not to rehabilitate failed managers but to get them off-site as quickly as possible.
3) Failure to Maintain the Property. Customers want to stay at RV parks that have sparkling clean restrooms and great grounds maintenance. If you let your property slide on cleanliness or condition you will soon find that customer will be seeking those items elsewhere.
4) Refusal to Modernize Marketing. We life in an internet age and having good signage and flyers at the visitor center will not cut it today. While those old-fashioned forms of marketing are still important, so are the new vehicles of Google visibility, a nice website, and strong social media reviews.
5) Not Attacking Loan Renewals Well Ahead of Expiration. Even if you never miss a mortgage payment, you can still lose the property to what is called “term default”, which means that your note comes due and you can’t replace it. The #1 reason that people “term default” is that they don’t start the process of obtaining a new loan early enough. You should normally start looking for a new loan around a year ahead of the current loan expiration, and not just a month before.
6) Not Producing Accurate Financial Statements. If you fail to produce accurate financial statements you will immediately start falling into two categories: 1) loan fraud and 2) tax fraud. You cannot scrimp on financial reporting, which is why accounting degrees are so valuable these days.
7) Taking Customers for Granted. Customers like to be greeted with warmth and enthusiasm. They want to feel important and treasured and that the manager will solve their problems. “The customer is always right”, right? But some RV park owners allow a pervasive atmosphere of nothing but lack of respect and passion about delivering a positive customer experience.
8) Not Taking Proactive Steps and Not Carrying Sufficient Insurance. Accidents happen. And when they do you better be the one who tried everything possible to not have them happen and then carried extensive liability insurance. It only takes one “slip and fall” claim to derail your business if you have not been minding the store on this issue.
9) Not Maintaining Licenses of Permits. Many RV parks – although not all – have to maintain annual health permits or other licenses through the state, county or city. If you let these expire, you may not be able to get them re-activated and can technically lose your right to operate.
10) Losing Interest in Your Business. If you ever wake up one day and find that you really don’t care about owning your RV park any longer then do yourself a favor and sell it. Warren Buffett once said “without passion you have no energy, and without energy you have nothing”. There’s nothing more painful than watching a successful RV park go down the drain simply because of lack of interest.
Take this list and tape it to the back of your door and read it frequently. Even the greatest RV park location and purchase can never survive these ten torpedoes, and they typically come not individually but as a group if you let your guard down.
Owning RV parks should be profitable and enjoyable. Do not shoot yourself in the foot.