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What Makes a Successful RV Park?

Published: 02-20-24 Category: General CRE

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.

Investors in commercial real estate (CRE) and potential property owners—especially those looking for a relatively small investment—may want to consider involvement in a popular national trend: vacations fueled by recreational vehicles.

While recreational vehicles (RVs) come in a variety of sizes and configurations, their standard definition is “a vehicle with kitchen, sleeping, and bathroom facilities.”

Here's an introduction to the types of vehicles that often require the convenience and utilities of an RV park or campground.

Types and Sizes of RVs and Trailers

Larger RVs have driver's compartments and up to three-wheel axles. They're classified as follows:

Class A: These are the largest and can comfortably house a family. They can be up to 45 feet long. They're the Rolls-Royces of RVs, with six or even seven-figure price tags.
Class B: Often called campervans, they're smaller and more affordable than Class A behemoths. They're up to 19 feet long and are more suitable for couples than families.
Class C: These feature a distinctive cab that extends over the cockpit. They tend to be bigger than Class B RVs, with an average height of 10 feet and a length of up to 28 feet.

RVs that require towing are described as trailers or “towables.” While they come in a variety of sizes, the biggest you'll encounter are fifth-wheel trailers, which can be almost as large as Class A RV.

Now that you know how many types of RVs are on the road, let's look at their owners.

RV Driver and Buyer Demographics

While RV owners are often portrayed in the media as empty-nesters or retirees, this isn't an accurate portrayal.

RVs and trailers are being purchased by all generations of travelers, from Millennials (aged 28 to 43) to Boomers (aged 60 to 78). RV sales are more than hot…they're breaking records.

By the end of 2021, RV-owning households totaled over 11 million.

By the end of 2023, they had increased to around 20 million.

Currently, owners under 35 years old comprise 22% of today's RVers, with over 80% of these owners planning to upgrade to a newer, more luxurious vehicle soon.

Remote workers are another group of RV enthusiasts. Their park/campground requirements are similar to retired visitors, as they often spend months at a preferred RV park.

No matter how old they are, most prefer destinations with a professionally managed RV park or campground. Let's look at your earning potential, whether you're a hands-off investor or owner/manager.

RV Investment Basics

While the phrase “location, location, location” is a cliche, choosing the best one is just as important for success in the RV park business as for other real estate investments.

When scouting locations, you'll have two basic options:

Buying unimproved land near a destination popular with RVers.
Buying an existing RV park or campground.

You can decide which option you prefer when putting your ideas on paper and preparing a detailed business plan.

Why Business Plans Keep ROI Rolling

No matter what you're planning, a detailed business plan should be one of your first tasks. Investors who prepare a plan are up to 16% more apt to be successful than their non-planning competition.

Your initial plan should include:

An estimated budget. This should include land purchase, utility costs, septic system installation, planned amenities, taxes, permits, construction, and maintenance costs.
A strategy that defines your preferred options. Will you buy land and build from scratch, or purchase an existing RV park? Will you hire staff or be the owner/manager?
Market analysis that includes details of current and future RV park demand, pricing statistics, and research into customer preferences.
A shortlist of possible locations based on your budget and market analysis.

After you've drafted a business plan, your next step is to research and locate possible RV park locations.

Scenery + Amenities = Profits

When considering your RV park's location, you'll want to check out the types of RV owners that frequent the area before finalizing your choice. Acquiring details of prospective visitors' budgets and preferences is equally important.

Although there's no such thing as a typical RV owner, there are two general types: vacationers and homesteaders.

Vacationers will almost always head for locations with outdoor activities, such as a beach or national park, although casinos are another popular destination. They may only stay for a weekend or for several weeks.

However, the year-round visitors are often retirees, with remote workers joining them. Homesteaders often prefer states with a lower cost of living, such as Florida, Nevada, Texas, South Dakota, and Wyoming.

After you add this intel to your business plan, it's time to finalize your location, begin construction, and put a maintenance plan in place.

Create an RVer's Dream Destination

Prioritizing your guests' overall experience encourages five-star online reviews. In addition to pet-friendly areas, reliable wifi, and landscaping, adding a pickleball court or swimming pool could draw more visitors.

Once everything's in place, you'll want to keep everything functioning, clean and attractive. A typical maintenance plan should include:

Regular checks of all plumbing fixtures, including water supplies and septic system hookups.

Seasonal landscaping maintenance.

Electrical checkups that guarantee safe hookups for visitors.

Inspection and repair of individual RV pads, walkways to amenities, and building finishes.

In addition to keeping your RV park attractive and inviting, here are more ways to increase ROI.

Managing Your RV Park for Long-term Success

Even though RV-fueled vacations have been around for decades, vacationers' attitudes are always changing. Here are strategies for maintaining a competitive edge.

Talk to your visitors. Instead of hoping for five-star online reviews, ask visitors why they chose your RV park and if their stay is living up to their expectations.

Check out your area's competitors. Compare your own pricing and amenities to other RV parks.

Maintain your social media on a weekly basis. This tells prospects you're open for business. Post photos and details of all amenities, scenic views, and nearby attractions.

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