RV Park Investing Newsletter

One thing that we never discuss much is how great the travel options are in the U.S. One reason that the RV industry is so vibrant in this country is that there are simply so many places to go and so much to do. I talked to someone from Canada recently, who told me of the limited number of landmarks to visit and the extreme cold temperatures that render much of the country impossible to travel in during many months of the year. Meanwhile, we in the U.S. have thousands of compelling destinations, and the possibility of warm weather year-round, based on where you travel. Our country is absolutely ideal for the RV industry, and that’s why there are more RVs in the U.S. than every other country in the world combined.

There’s nothing more depressing than finding that an RV park you are looking at buying has a floodplain designation. While sometimes a deal-killer, before you react to the news, there is more to find out and to contemplate before making your final decision.

Identify what’s really affected

I have seen RV parks in which the floodplain only extends over their playground. I saw one in which it only impacted a basketball court. Such a situation means that, worst case, you would only lose the access to a recreational area for a while. So the first step in deciding what to do about floodplain is to see what the worst case scenario would be. If you have 8 lots in the floodplain, then that’s the limit of your exposure. However, if the entire park is in the floodplain, then that’s an entirely different matter.

Verify past performance

Once you’ve identified the worst-case scenario, it’s time to ascertain how often this has happened in real life. Talk to the city and neighboring property owners about how many times the park has flooded out in the past. You may find, as we have many times, that the flooding has never actually occurred. The reason is that the theory of floodplain seldom meets the reality. Floodplain is based on a set of assumptions that does not always come to pass in real life.

See if there’s a way to mitigate the exposure

Many times, you can work around the floodplain. For example, you may be able to build a berm that diverts the water. Of you can sometimes raise the area in question up a foot or two with dirt and it is no longer in the floodplain. The key is to get the facts of what you need to do to correct the floodplain, and proactively see if there’s a solution.

Come up with a plan in case of emergency

If you can’t cure the floodplain, see if there’s a workable plan to live with it. For example, if there are 6 lots in the floodplain, could you give them plenty of notice if the water starts rising? Could you just stop using those lots, since the RV park is seldom at 100% occupancy? See what the options are – maybe you can come up with a plan to ease your worries.

Get loss of income insurance – but understand the limitations

In many cases, you can get flood insurance from a specialty RV park insurance carrier. This can give you additional peace of mind. However, there are limitations to the protection that this coverage affords. Loss of income insurance – one of the most popular products for parks with floodplain – starts to pay your bills the minute the park is impacted by the flood. But it turns back off when the RV park is re-opened for business, even though you have no customers. Learn what the insurance options – and costs – are and see how that impacts your opinion on the floodplain risk.

Conclusion

Floodplain is never a good thing for an RV park. But it is not always a deal killer. Before you terminate the contract, give some further thought and investigation into the ramifications of the floodplain designation.

Nothing has a greater impact on an RV park, during spring, summer and fall, than the way that it is mowed. Because an RV park is effectively a parking lot for RVs, there is a huge amount of roads, curbs and pads and these together form the most striking visual image to the customer.

First impressions are critical

It’s no surprise that the customer forms their first impression of your property the minute they enter. If things look nice, then they are favorably impressed and form a positive first impression. This first impression can bail you out if you do something else wrong, as they will think “what a nice RV park – too bad the pool isn’t clean – I’ll still come back”. A negative first impression would be “what a horrid RV park – just look at how bad the pool is – I would never come back”. At the worst end of the spectrum, the customer will elect just to turn around and not check-in, or reduce the length of their stay. So you have got to nail the first impression and that all revolves around mowing, since that’s the first thing you see before you even park your RV to enter the office.

What your customer really demands – and it’s not much

The three main components to proper mowing are 1) mowing 2) weedeating 3) edging and 4) removing all vegetation from concrete pads and curbs. None of these is rocket science. In fact, this is probably the most straightforward of all tasks in the RV park. If you can simply get these easy steps accomplished, then your customers will have a positive first impression every time.

What could be simpler – yet harder to execute on for many RV park owners

Sure, it sounds easy. But the reality is that most RV park owners struggle to get this simple mission accomplished. When I go out and tour our RV parks, I rarely am pleased with the mowing. I always see dozens of details that have been missed. There’s nothing more depressing than having a $5 million RV park with weeds two feet high around the entry sign. Why is it so hard to do something so simple?

Where things fall apart

Generally, where the mowing falls apart is that the park owner’s plan is unrealistic. Many RV park owners want to nickel and dime the mowing, so they choose a non-professional company (typically a family member or teenager) who then rarely shows up as promised and does a half-baked job most of the time. They go on vacation, they call in sick, and your RV park gets ruined in the process. Why would you stake a $5 million business on a 19 year old kid that can’t even clean his room?

How to make things perfect

Before you can demand perfection of your RV park’s mowing, you must first forge a realistic plan. We have found that we are far better off hiring professional landscape companies to mow our properties than to hire amateurs. Every year – in the winter – we put the mowing for the coming year out to bid. We seek bids from every landscape company in town. We also get a bid from the best amateur we can find, as well, just for comparison sake. We then select the lowest price among the professionals, using the amateur estimate as our target (what could be better than getting a professional for the price of an amateur?). These bidders must have full liability insurance and workmen’s comp. Once you make the selection, you drive the mowers crazy with perfectionism. We have found that the professionals will put you into their schedule every week and will really show up (unlike the amateurs) and they respond well to friendly criticism (unlike the amateur who might storm off in a temper tantrum). And our scary lesson learned is that the cost of the professionals can often be lower than the amateurs when you take into account supplying them the mowing equipment and insurance.

Conclusion

Mowing is so easy, yet so hard to do right. If your RV park is not looking its best in that regard, then it’s time to turn over a new leaf. The only way to succeed at mowing is to have a reasonable plan. A kid with

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