RV Park Investing Newsletter

The Holiday Season has different meanings to different people. But they all share in the common trait of affinity for their fellow man. This is the prime moment of the year to gather with friends and family and to reorient yourself with the joys of relationships, both new and old. Many Americans spend too much time working or in amusements that preclude human contact and not enough time sharing good times with friends and family. The great thing about the RV park industry is that you not only get to share personal relationships during the holidays but throughout the year. Let’s face it, RV parks are a “people business”. And we think that’s one of its strengths. Can there be any more enjoyable way to spend your life than making people happy and sharing good times with them? And we would like to take this opportunity to also say how much we enjoy the time we spend together every month with this newsletter, which we really enjoy writing. In 2020, we will also be adding a podcast series to augment this information flow. Thanks for all the positive feedback you have given us, and for keeping the RV park industry front and center in your investment plans.

So raise a glass of eggnog and let’s toast to having a Happy Holiday Season! We’re glad you’re a part of ours.

“RV” stands for “recreational vehicle”. But sometimes that role is expanded to “full-time home”. Throughout America, many Baby Boomers are opting to downsize and live out the reminder of their lives in RVs – and they’re retiring at the rate of 10,000 per day. So what is the impact on RV parks from this new living format?

Obviously, many more nights of occupancy

The average RV owner stays in an RV park roughly 14 nights per year. Then compare that to 365 nights if you live in one full time. Each retiree that elects the RV as their retirement home is equivalent to 25 vacationers. This one factor has the potential to boost RV occupancy massively.

Greater stability during seasonal periods

When you have customers who want to live in one place most of the time, they are willing to remain behind when other RV owners go home. If you have a seasonal RV park and have a central core that stay year round, this gives you substantial additional stability and cash flow. I recently drove through a property that was closed for the winter in Indiana, but there was still about 30% of the park occupied by those who stay through the winter. Some of these customers, in fact, actually enjoy these periods as it gives them greater solitude and they enjoy the change of seasons.

Less strain on amenities

Those who live in RVs rarely use the park’s amenities. They don’t hit the pool and they don’t play mini-golf. They have plenty of activities to do on their own that mirror back when they lived in a stick-built home. This makes these customers perhaps your most profitable, as they utilize little in RV park services and that even includes the effort required to sign them in and help connect their utilities.

Conclusion

The retirement of 10,000 Baby Boomers per day is going to have strong benefits to the RV park industry namely in large occupancy increases. It’s quite a trend, as it’s projected to continue for the next decade or more.

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Americans have an affinity for the Christmas holidays, with happy childhood memories mixing with pretty decorations and time spent with friends and family. Tying your RV park to this holiday spirit has always been a good idea and is a great way to manifest a positive customer experience. So how can you properly decorate your RV park for the holidays – on a reasonable budget?

Your entry

Here’s your chance to make a great first impression and impress the world with your holiday spirit. Here are some options:

• If you have a fence on your frontage, you can decorate this with bows, garland and even lights (if there’s electrical connection). You can find two of these three at the Dollar Store.
• You can install inflatable holiday figures (snowmen, snoopy, etc.) and you can buy these for around $30 each at Walmart (the cost has come down significantly).
• You can install holiday flags (available on eBay at $6 each).

Your office

This is mandatory.

• Install a nice Christmas tree that is appropriately lighted and decorated with ornaments. Walmart has lowered the prices on these items to such a level that you can do all of the above for under $100 and keep it and use it every year.
• It’s also a fun idea to have small presents that you give to every person who checks in, both children and adults. You can get holiday gift sacks and the gifts themselves at the Dollar Store.
• You should decorate the outside of the office with lights and other appropriate holiday items, particularly around the door.
• You can also inject some RV-related Christmas items that you can find on eBay or even Cracker Barrel.

Your amenities

It’s a great idea to adopt a common decorating theme that you can extend throughout your entire property.

• Holiday figures that are painted on plywood and cut-out, these are sturdy and can be used year after year.
• Inflatable holiday figures to augment ones at the entry. These are strong and perennial but, unlike the plywood variety, they require electricity.
• Decorate any evergreen trees you have throughout the property.
• Install mini-lights on your common areas structures.

Your attitude

If there was ever a time to put a smile on your face and have a positive attitude, then the holiday season is it. Customers are looking for a happy theme throughout the holidays, and you will greatly disappoint them if you are any less than a goodwill ambassador. Having a positive attitude is free.

Your gifts to staff

If you want to get your staff to adopt your positive attitude, then you might kick it off with a holiday gift to your staff. Something meaningful. It does not have to be a huge economic gift, but something thoughtful that you know they would like. It’s a great way to ignite holiday spirit.

Conclusion

Christmas is a great way to harness the positive energy of the season and to reward your customers with an extra-memorable experience that will hopefully ignite greater word-of-mouth and repeat business. And, most of all, the holiday season can be just pure fun.

M.J. Vukovich is one of the top capital consultants in the industry. His specialty is to help you obtain bank or CMBS debt for your RV park. He charges roughly 1% of the loan for this service, and frequently pays for himself with lower interest rates and better deal terms than you can obtain. He’s paid only on successful completion of the loan.

For a free consultation, contact MJ at (612) 335-7740 and let him tell you what he can do for your property, or email him at [email protected].

Some people think that larger RV park owners have an advantage when they cast about to find another acquisition. But this is actually incorrect. Most mom and pop owners prefer selling to the first-time buyer or the individual that has only a few properties.

Understand your advantage

The smaller buyer brings many important attributes to the table:

• Bonding

Mom and pop sellers gravitate to people they like. And you forge this alliance with what is called “bonding” – which essentially means spending time with the seller. Your advantage here is that big companies rarely will devote the time to get to know the seller, relying on simply the financial parts of the transaction. But older sellers relish more than just money. They like to do business with people they like and trust.

• Speed

The smaller buyer can make immediate decisions. But big companies require committee meetings and endless delays. Sellers admire and appreciate speedy decisions and will always go with the buyer who can tell them the straight truth and not need time to ponder.

• Lower overhead

The smaller buyer can often pay more because they don’t have the drag of high corporate overhead, and this can represent a tough hurdle for the bigger buyer to overcome. There’s one large RV group that tacks on a standard $100,000 per year corporate overhead burden on every transaction they look at. That lowers the value by around $1 million.

• More creative deal structure

Smaller buyers are more willing to be creative to get a deal done, while larger buyers are more structured and unwilling to veer from their normal policy. Some RV park deals require thinking “outside the box” and larger RV park owners refuse to do that.

So make no pretense about who you are

Since sellers naturally gravitate towards the smaller buyer, the worst thing you can do is to pretend to be larger than you are. Trying to “impress the Jones” may work in social situations, but not with RV park sellers. Be yourself and be proud of your personal history and where you are today. These moms and pops will have similar backgrounds and stories and that will help you bond with them.

Conclusion

Never feel inferior to a larger buyer. You have the advantage. Use it.

A recent feature in a popular automobile “hot rod” magazine was all about vintage RVs. Just as collector cars have a growing following, so do classic RVs. This type of article is great publicity for the industry, as when people buy RVs – antique or new – it means they have to park them somewhere.