Four Critical Consideration of Buying an RV Park

Campground business

Are you considering RV parks for sale in your area? Purchasing an RV park, either as a franchise or as a sole-proprietorship is a great way to make a fairly good living, and if you maintain or improve it throughout your ownership, when the market is good, you can sell it for a sizeable amount more than you paid for it, giving you a nice retirement fund.

If this sounds like the ideal way to have a career you love and a reliable retirement, pay attention to our list of things to consider before you buy an RV park:

Four Critical Consideration of Buying an RV Park

  1. Understand the financials.

    Most of the time, the “going rate” for RV parks are about ten years of their earning potential. In other words, if an RV park historically earns about $100,000 per year, it would probably be listed for about $1,000,000 for sale. Before you buy an RV park, you need to look closely at the financials to ensure it is a good purchase. If the asking price is far about the estimated earning power over the next ten years, they might be asking far too much. However, you should also be wary of an RV park that is listed a lot lower than its earning power over ten years. There could be something about it that isn’t being disclosed.

    One thing about RV park purchases that isn’t always true of businesses that change management (especially other service-based businesses, like medical practices or building contractors) is that the income potential is generally linked to the location, and not the owner. When the ownership changes, the profitability of the RV park doesn’t usually change with it. This means that it is very important to look over the financial history of the campgrounds before your determine the price you’ll pay for it, or if it’s worth buying at all.

  2. Learn the biz before you jump in the deep end.

    The campground hospitality industry is far different than any other type of accommodation business in the industry. The challenges and benefits are unique, and the financial management is different as well. Unless you’ve had the opportunity to actually manage an RV park that was owned by someone else, you really need to get some hands-on experience before you jump into RV park ownership.

    You might be able to set up an internship of sorts with a successful RV park that would give your a first-hand look at what you’re in for. Otherwise, there are classes available that will teach you the essentials of the business. Always –always– do something like this to grasp the ins and outs of the biz before you blindly sign up for RV park ownership.

  3. You’re going to need money to make money.

    If you think that owning an RV park is a get-rich-quick scheme, you might be disappointed. In reality, buying an RV park requires a sizable down payment. Many financial institutions require a minimum of 25% down payment in order to purchase an RV park. That means that in order to purchase a $1 million RV park, you’ll need to have at least $250,000 in cash.

    On top of that, it’s important to have money in savings to make improvements to your RV park as they arise, and operating expenses when profits aren’t covering it. This isn’t just a good business practice, it is something than many banks require in order to qualify for financing.

  4. Think seasonal.

    Some parks run year round, while some parks are hoppin for half the year and then close down during the winter or summer or whatever season is “off” for the area. You might assume that you’d want to own a park that can run year-round, as that would increase your earning potential. However, there are a lot of benefits to running a park that is only open during certain seasons.

    Running an RV park is a 24/7 kind of job. You’ll find yourself on-call all of the time. You’ll have visitors coming and going on every day of the week, meaning you have to work every day of the week. When you have a seasonal park, you can work hard for half the year, and then take a break the other half of the year.

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