Commercial Real Estate News / Investing / How to Profitably Invest in RV Parks & Campgrounds in Utah

How to Profitably Invest in RV Parks & Campgrounds in Utah

Published: 09-28-21 Category: Investing

Specializes in providing actionable insights into the commercial real estate space for investors, brokers, lessors, and lessees. He covers quarterly market data reports, investment strategies, how-to guides, and top-down perspectives on market movements.

A white RV sits in an RV park for sale in Utah.

This article was updated on 9/07/2023.

Utah houses a widespread camping culture that prides itself on the beautiful landscapes and scenery of the state. On top of that, the economy of Utah is booming and on the rebound from the Coronavirus Pandemic, with travel and tourism as one of its top revenue-generating industries; in 2019, visitors to Utah spent over $10 billion, with $1.2 billion of that spent by national park visitors..

Campgrounds and RV parks for sale in Utah can yield higher-than-average ROI for investors than other types of commercial real estate properties; you can realistically expect 10% to 20% returns. Despite the niche nature of these special-purpose investments, they can require little to no capital after your upfront investment, depending on your approach.

There are a couple of ways you can go about investing in RV parks & campgrounds: You can either purchase campgrounds for sale and/or RV parks for sale that are already developed and invest in their improvements, or you can purchase commercial land and develop that into a campground or RV park from scratch.

Building from Scratch vs. Buying

If you opt for the first option, depending on where you look, you may end up spending more money upfront just to modernize the grounds if they lack amenities and features that make them attractive to campers today. In some cases, you'll create a higher-quality product by just building your own from commercial land.

On the flip side, if you develop from scratch, you sacrifice more immediate cash flow for more quality control over how the project turns out in exchange for longer periods of waiting and development as you obtain financing, deal with zoning regulations, clear and design the land, hire the right professionals, etc. Developing commercial land into a campground may mean a cheaper upfront investment but with more long-term investments. Some investors may opt for improving existing campgrounds with less capital and much less waiting.

How Much Does It Cost to Maintain a Campground?

The camping industry in the US generates billions of dollars every year, but not all of that money goes to owners and operators; a large portion of that sum goes to maintenance and upkeep as well as advertising and marketing. Some of the chief expenses required to maintain a campground include:

Cleaning & land maintenance;
Disposal of garbage;
Gasoline;
Renewing permits & licenses;
Payroll;
Paving & patching land;
Utilities;
And more.

The specific costs of long-term maintenance vary greatly, but startup costs can be as low as $10,000 and as high as $50,000; if you develop from scratch and have to finance a fresh lot of commercial land as a result, you'll spend more in the long-run than buying already developed campgrounds for sale or RV parks for sale, then investing in their improvements.

Don't expect to turn large profits after your first year of managing your campground or RV park; the money is made in leveraging the momentum that you generate after that first year and capitalizing on what you know works.

Profitability Checklist for Investing in Campgrounds & RV Parks

There are three primary considerations you need to take into account if you're going to buy RV parks for sale or campgrounds for sale in Utah. Overlook these considerations and you'll create more problems for yourself than you'll solve.

#1 – Check Amenities

Chances are very high that the large majority of your target audience will be "glampers," or people who enjoy the "modern outdoors" in campgrounds and RV parks adorned with WiFi internet, swimming pools, sports courts, and even a fitness center. Ensuring your campground or RV park boasts the right amenities will immediately increase long-term business and ultimately profitability.

#2 – Check Property Management

There is no nightmare quite like that of bad property management. The last thing you want to do is put all this effort into your investment only to find out it is being managed by fools. The best campground and RV park management treat site renters as family. If you're investing in already developed campgrounds for sale or RV parks for sale, property management is one of the first things you want to verify to save long-term profitability.

If you're building your own campground or RV park from scratch, hiring the best property management possible should be a priority.

#3 – Check Marketing & Location

Finally, your investment won't generate returns if people don't know about it. Your campground will need solid advertising and marketing to boost awareness and get campers in the door. This is also where the specific location of your campground or RV park matters: Is it easily accessible from popular roadways and highways or will people have to really hunt to find it?

Consider Working with a Commercial Real Estate (CRE) Broker

Whether you choose to build or buy, there is no downside to hiring some professional help. A commercial real estate broker will have more hours of experience and training as well as state licensure to broker commercial real estate. CRE brokers will be familiar with specific geographic areas and will have access to specific market intelligence that only brokers can access.

As a result, working with a CRE broker can help you not only pinpoint the best possible location for your campgrounds or RV park but win you favorable terms at the negotiation tables you'll be sitting at.