When it comes to investing, most people look only at the numbers. But RV park owners enjoy dividends that stretch beyond simple economics. They can gain personal rewards that are equally as impressive as their financial benefits. So why do RV parks have a higher return than just money?
The chance to be your own boss
When you own an RV park, you own an interesting business that you fully control. You hold the title, and you call the shots. On top of that, you own a virtual city of customers, and you can delegate as you see fit, and test your theories with your own pocketbook. Since you own the business, you also receive all the rewards. You answer to no one and you make all the decisions entirely on your own.
The chance to be outdoors
One huge benefit of owning an RV park is that you have the privilege to be outdoors – a lot. An RV park is an outdoor enterprise, and that communing with nature is a huge attraction for many buyers. If you have been stuck in an office your entire adult life, there is huge satisfaction in getting out of that rut and spending time in the sunshine and fresh air.
The ability to enjoy your time and not just watch the clock
Studies have shown that around 70% of Americans hate their jobs. They dread going in every morning, and they watch the clock the whole day, waiting for it to end. This situation has led to an enormous amount of stress in the workplace. An RV park can be the solution for many people, as it replaces that dreadful day job with something to look forward to – the ability to actually enjoy you time and your life.
A win/win with zero stress
One reason that owning an RV park can be such a pleasurable experience is because it’s a win/win business. In a correctly run RV park, both the owners and the customers are 100% happy. This is not a business founded on conflict. If you can make sure that all utilities and amenities are working fine and that all customers have a great experience on property, your success will be assured. Many jobs include a regular dose of stress, conflict, bitterness and bullying. This is not one of those jobs.
But great financial performance, too
If owning an RV park can be a pleasurable experience, then what about the economics? Can you have fun and make money, too? The answer is yes, if you buy the right park and buy it at the right price. The typical cap rate on an RV park is around 10% and, given current loan rates, provides for at least a 3 point spread between the cap rate and loan finance rate which, in turn, gives you a roughly 20% cash-on-cash return. But that’s only part of the story. The right RV park has significant upside to be tapped, typically in occupancy. If you improve the marketing and the customer experience – resulting in positive reviews, good word-of-mouth and high customer retention rates, you can typically beat the old owner’s revenue budget, and virtually 100% of that revenue falls to the bottom line.
RV parks offer high financial returns, but they also offer high levels of individual satisfaction, They are a unique investment class, as they have the ability to meet the investor’s needs in more categories than just yield.