Do you enjoy people? Do you like being outdoors? Do you like being your own boss? If the answer is "no", then buying an RV Park is the worst thing that you could do. If you answered "yes", then read on and learn more about owning an RV Park.
The Financial Side of Owning an RV Park.
RV parks are a very high-yielding investment, with returns from 10% to 20%+ on your money. RV parks are among the highest-yielding of all real estate asset classes. So if your goal is to maximize the return on your money, RV parks are not a bad starting spot.
Another strength to RV parks is the fact that most are owned by moms pops - smaller owners who have no debt and, therefore, the ability to carry the financing on the transaction. When the seller carries the financing at a low interest rate, it compounds the yield you can make on your money thanks to leverage. Leverage, as long as the interest rate on the loan is lower than the cap rate of the deal, will give you an even higher return. So, even if RV parks sold at the same return level as other forms of real estate, they would still kill the competition due to seller carry.
It's also important to note that most seller carry is does not require any kind of credit review of loan committee. If you have bad credit, you can still pull off a seller carry loan. Most moms and pops do no type of loan scrutiny, and don't even require some third party reports like an appraisal. Additionally, most seller carry is "non-recourse" in nature; even if you default on the loan and property is sold at a loss, they note holder cannot come after you for the deficiency.
The Non-Financial Side of RV Park Ownership
To many owners, running an RV park is so much fun that they'd do it for free. While we don't advocate that you go that far, the types of duties that owning an RV park include are very appealing.
Where else - outside of an RV park - can you devote your day to fun? And of all the duties that you inherit, they break down into three main categories:
* Giving people a wonderful experience away from home. Your customers are looking to you for guidance and support. They want to hear about things to do, things you recommend. They are your guests, and they need you to help show them where to go and how to hook up their utilities. Many just want a pleasant "how are you doing today" to re-assure them that they made the right choice in pulling into your RV park
* Fixing things on a continual basis in the out-of-doors. If you are a hands-on RV park owner, you will be forever tinkering with everything from the swimming pool to the landscape. You will be a jack-of-all-trades who needs to enjoy working with your hands outside. Even if you have a maintenance man and just ride around on a golf cart, you are always going to be multi-tasking.
* Being the boss. Every problem is going to stop with you. You have to be the decision maker. You're the one who makes the call on if you can give a discount to the 10 snow-birds passing through as a group. You have to decide on the advertising. Everything is you, you, you. In being the boss, you also have complete freedom over your time. You set the schedule and the hours of operation.
One of the biggest non-financial benefits of owning an RV park is the quality of life upgrade. Many people love the lifestyle that owning an RV park affords. The freedom and the fun. Many RV park owners only have one regret - that they did not buy an RV park sooner.
Some Additional Considerations.
Owning an RV park can be a source of creating an estate for your heirs to enjoy. While many people fritter their savings away when they retire, an RV park owner can spend every last dime the park generates, and it just creates a new stream of cash flow the next day. So you are actually building an asset that may not only be your source of enjoyment, but provide for your heirs as well.
A successful RV park can be worth $1 million or more. It can be a multi-generational gift to many people. A way for you to create an important estate on only your down-payment and sweat equity.
Owning an RV park is well worth the investment. It can provide financial and quality of life benefits that far outreach any stock, bond, CD or other form of real estate.
Isn't it worth the time to research the RV park industry more? But don't call me - I'll be out on my golf cart.