While RV Parks are often all about temporary housing, a growing trend is for Americans to live in their recreational vehicles full-time. In this RV Park Mastery podcast we’re going to explore the “permanent housing” side of the industry and how it can be an important addition to many RV Parks.
Episode 133: Are Fifth Wheels And Travel Trailers The Homes Of The Future? Transcript
America is very much in an affordable housing crisis. And your RV park may hold the key, the solution to that dilemma. This is Frank Rolfe with the RV Park Mastery Podcast. We're going to talk about the fact that in today's world, travel trailers, fifth wheels, even motorhomes, these may be the houses of the future. Now, typically in the RV park industry, we're thinking about people who use on average in America, an RV that they own 14 days of the year. And there are millions and millions of these RVs out there that people use recreationally. They do not live in them full time, but there's another element to the business, and that's permanent housing. And you see it more and more every day in RV parks across America. So what's really going on there? Well, let's just break it down into easy, easy to understand pieces. American housing is horribly expensive. Today, the average single family home is coming in at $400,000. Is the average. The average apartment today is $2,000 a month. And for many Americans, both young and old, those two price points are absolutely out of the question. There's 10,000 baby boomers per day retiring in America, but their average retirement income is only twelve hundred dollars a month per person.
That means two people each getting twelve hundred on Social Security a month. After their apartment rent, they would have $400 left over for every other cost and they would have no ability to ever buy a house at a $400,000 price point. So what are the options for millions of Americans who cannot afford single family prices or the average apartment rent? The answer, an RV. Think of all of those people who own all those RVs. The millions and millions of RVs across America, which they typically own free and clear. And they're sitting there in their house and they've just retired. What are they going to do? They just going to stay in the house and try and scrape by? Well, here's an idea many of them are grasping. Why not sell the house and live in the RV full time? I myself know a professor from Lindenwood University here in the St. Louis area. Lived in a house, a nice house, a brick two story house. He was a professor at the university and then he retired. And when he retired, obviously his income fell a whole lot because he went from getting his regular professorial salary down to whatever his retirement package was.
But he also owned a big old motorhome that he had behind his house. And one day he realized, you know what, why don't I just live in the motorhome and sell my house off and Use the money from selling my house off to give me even more income in the bank and a CD and get. And just cut loose all of that overhead on that house. All of the property tax, mowing and AC and heating. Just cut it all loose. Just live in the RV. And that's what he's done. He went around America basically in the RV, initially deciding where he wanted to be full time. He ultimately decided to live permanently in Arizona in that motorhome. And he's been doing that now for a decade. I see a whole lot of that, even more so, popping up in the future because a lot of Americans are going to realize, many of the people who own those millions of RVs, that this is the ultimate solution to the housing crisis, and it puts them in the best position to enjoy their life. Now, is everyone going to do that? No, everyone's not going to do that.
You're not going to have by next Thursday, millions and millions and millions of people sell their house and move into the RVs. But there is an element of that part of the business which keeps expanding on a regular basis. And for many RV park owners, unless you have 100% occupancy in your RV park right now from people who are coming in for that average of 14 days a year, it might be smart for you to start pondering this concept, pondering the idea of maybe setting aside some of your RV park to permanent residency. But how will that work? You might say, you know, I'm an overnighter RV park, or I'm a destination RV park. And I mean, how can I structure this? Well, what you would do is basically no one is really going to know how long you're there. But you're going to have to offer, instead of a daily rate or a weekly rate, a monthly rate for people who will be there all the time. And that monthly rate would have to be reduced from what you're getting from a daily or weekly rate, obviously. But that's better for you because you have absolutely no vacancy.
And in many cases, what you're going to do is you're swapping transitory income for permanent income. And that permanent income is very reassuring as an owner, because that means you have a set amount of money coming in every month. You don't have to worry about who's going to pull in and who's pulling out. You already know you've got enough there to, let's say, cover the mortgage, all of your overhead. You could get to the point where the regular, by the day, by the week RVs are your, are your fund money, your profit. It's exciting because you know that you have all the bills covered and so your worst case scenario is just making extra money. Now, if we're going to expand on the concept of people living in their RVs full time, let's not forget the other derivative of the industry, which is the park model. A park model is a home allowed by the government to be brought in, typically 400 square feet or less that sits on an RV park lot. But it gives you a new dynamic. You have something with rigid walls that's, that's a little more adaptable to some people, yes, it's on one level, just like the motorhome, but it sits basically on the ground.
And it also makes it possible to make it more ADA compliant because those typical park models, you can put a wheelchair in them, you can affix grab rails to it, you can get a ramp up to it. And so for many seniors now, this makes the RV park living full time dynamic even better. In many cases, if you're a good shopper, you can buy these park models and bring them into your RV park and then sell them for the same price that people can sell their RV and basically swap their RV for that park model. And if you're going to dwell in the world of park models, then let's talk for a moment about tiny homes, which are becoming a huge craze in America. Have been for well over a decade. You've seen all the tiny home shows, tiny Home Nation, all these different derivatives of the same concept of basically living small in your own custom creation. Now there's custom creations you see on the show. They can't go into mobile home parks, they can't go into single family lots because they don't meet the uniform building code on the single family lot, and they don't have that HUD seal you need at a mobile home park.
But they can by definition typically fit in an RV park. I drive by some RV parks that have embraced the tiny home concept movement so much, they have entire sections of the RV park set aside just for tiny homes. The bottom line to it is that in many cases, you may not realize it, but RV park owners literally are the last option for many people to truly have the ability to live economically, to have affordable housing. You've got the right zoning for it, you've got the right lot sizes for it, you have the right amenities for it, you have the community spirit that they're looking for. You typically have the locations, you have the physical beauty. So why not unveil that option? Because it works in almost any RV park regardless of location. And you might say, well, but wait a minute now my RV park is seasonal, okay, that's fine. But people can still live in those RVs full time even in that seasonal park in the off season. I know an RV park that's seasonal and it has half of the park that's seasonal closed for half the year and the other is open year round.
Think what a difference that would make in your numbers, in your economic stability, having a nice steady income forever on a portion you had to basically shut down for a portion of the year. Affordable housing is a very, very tough and delicate issue in America. Probably it's America's number one problem, but as a result it's also America's number one opportunity. This is Frank Rolfe of the RV Park Mastery Podcast. Hope you enjoyed this. Talk to you again soon.