RV Campground ownership?

[brewer12345]

I dunno why, but this idea crossed my mind: how about a seasonal RV campground business in early semi-retirement? The pluses are that it is seasonal and would not require full time commitment; would generate some amount of cash flow; would probably serve as a decent investment when it came time to liquidate; and generally they are in pretty locations. The downsides look like it is a fair amount of work in-season and I bet that these properties need a fair amount of capex to keep up.

But I see stuff like this: Tumble Hill Campground, camping in New York Finger Lakes appears to be for sale for $319k.

Anyone thought of this or done it? Real bad idea?

Mostly just toying with an escape fantasy as I sit at my destk on a Monday...

 

[TromboneAl]

We usually stay at government campgrounds. I've found that private campgrounds are usually more expensive, more crowded, have a lot more rules (like "do not touch trees," and the owners are crabby. Maybe that just comes from a few bad experiences, but it may tell you something about what it's like to own one.

 

[audreyh1]

I don't think it's a bad idea as long as it's seasonal and not year round. Capex should be MUCH LESS than that for maintaining a building or apartments. You can get "cheap" help by having a few workkampers staying at the campground.

You have to deal with people though!

Audrey

P.S. It's not my idea of fun.

 

[REWahoo]

You have to deal with people though!

Audrey

P.S. It's not my idea of fun.

Spend next Saturday at your local Chucky Cheese, then think what it would be like to live there 24/7 for a few months. Your customers will be older, but they don't go home at night!

 

[larry]

My BIL owned a campground on the Gulf coast for ~20 years and just squeaked by all those years. Then Katrina hit, business boomed, land values skyrocketed and he deemed it time to retire. All of his payout came at the end.

Even though you say it's seasonal, it can still be a full time business.

 

[Gumby]

My younger brother and his wife own a small mixed campground (about 40 RV hookups, 10 cabins and a field for tent camping) down in the Missouri Ozarks. It is indeed seasonal and he finds it necesssary to supplement his income by working as a contract industrial laser repair tech during the off season. He finds the camping clientele often difficult to deal with.

 

[Rich_by_the_Bay]

Hmmm... remember the old "Bed and Breakfast" craze in the 70's? Everyone thought it was quaint. A few years later they were upsidedown on their mortgages and realized they were all maids and custodians.

I guess if there was a great piece of land you wanted to sit on for appreciation for 10 years it would be relatively cheap way to keep some cash flowing....

 

[Nords]

Man, I'm not feelin' the aloha from this poster. What a shame.

I think I'll forward this to the HVCB...

 

[wildcat]

Not sure if this convinces anyone of the idea but Sam Zell, the man behind the REIT, has been buying RV lots over the past few years so he must think it is a decent business. I am sure it could be hit/miss depending on the location.

 

[haha]

Not sure if this convinces anyone of the idea but Sam Zell, the man behind the REIT, has been buying RV lots over the past few years so he must think it is a decent business. I am sure it could be hit/miss depending on the location.

Wildcat, I’d like to read about this. Do you have a link or a reference to printed material?

Ha

 

[wildcat]

Let me dig into my archives -- it's has been a couple of years since he spoke about it in an interview. I will get back to you.

 

[calmloki]

Man, I'm not feelin' the aloha from this poster. What a shame.

I think I'll forward this to the HVCB...

Ah c'mon man - didn't the little flower bullets do it for you? The mahalo? Just no pleasing some people!

 

[wildcat]

Ha -

I must have erased or lost the article but it was an old Barron's interview (probably like 2 years old) I copied/pasted -- IIRC you are Barron's reader. I looked around the web and couldn't find the exact one. He really spoke favorably about the demographic trends for the industry and made a decent sized bet on it through a partnership/JV. Most of the properties were in the south/southwest.

 

[roscaroo]

I've thought a little about owning an RV park too. As an avid RVer, who travels a lot in the U.S. and Mexico, I can't figure out how anyone who doesn't already own an RV park (and got the land and improvements cheap) can make money in this business. Even for those folks, I'm not sure it's always worth it. I'm sure somebody is making money at this, but it's a mystery to me how they do it.

Let's say you buy a park in upstate NY for $300K (sounds too cheap to me). First, your money invested at a conservative 5% earns you $15k without doing anything. Second, let's assume your park can be open in upstate NY for 5 months (that's a stretch, I think, since most people don't like camping in the snow.). Let's assume you have 40 spaces and you charge $30 a night. Let's assume your occupancy rate averages 50% for the 5 months. That gives you gross revenues of $90,000. Third, subtract your expenses for water, sewage, taxes, electricity (remember, those 40 footers suck electricity), garbage pickup, grounds maintance, property taxes, income taxes, sales taxes, insurance (somebody's going to slip and fall at your place and claim it's your fault), wireless internet (everybody has it now), credit card processing, repairs, etc., etc. Fourth, remember that you (or someone) has got to be there 24/7 for the 5 months to collect the money (and it should probably be you since employees dealing with cash have a tendency to skim a little for themselves). Fifth, the bathrooms and showers have got to be cleaned (RVs are pigs). Last, you have to deal with a lot of people, all of whom want something for nothing, and some of whom may be downright nasty.

Now, putting your $300k in a CD and collecting 5% doesn't seem so bad, does it? As usual the dream seems a lot more romantic than the reality.

 

[old woman]

I think it would be like any other landlord business, good for owners who have rules and enforce them bad for softhearted people. If you have rules that trouble makers will be kicked out and no refund then enforce it you won't have some of the problems. Since most are in remote places it should be cheap to hire help and you can have some free space for people to work off the space rent.
Also you can make money in a camp store or restaurant and selling ice cream treats.

 

[kcowan]

We looked into RV/Campground ownership a few years ago. Seasonal means that you spend 6 weeks before the season getting everything back in shape, and 3-4 weeks after the season preparing for shutdown. Most places have a 10-week season unless you are in the sunbelt. So think of it as a fulltime job for 20 weeks. And during the 10 weeks peak, you need added help. The one we looked at had 3 people during the high season.

As an investment, it will only sell for an amount that makes the business work so you will only get inflationary gains relating to how much you can raise your rates without losing occupancy.

The exception to this is if the land can be converted to other uses, e.g. lakefront property for vacation home development. In that case, the RV operation helps to carry the land until a conversion is practical. But there are also many issues to be dealt with on a conversion. If you sell to a developer who is prepared to deal with the conversion issues, you will have to discount, probably to half the "retail" price.

The properties we looked at were being sold because the owners' families had grown up and it was not practical to hire staff (too costly and too much turnover). Also they were never able to enjoy their summers which was high season.

 

[maddythebeagle]

Now, putting your $300k in a CD and collecting 5% doesn't seem so bad, does it? As usual the dream seems a lot more romantic than the reality.

Very good point...I think this probably applies to most of these threads on FIRE businesses, rentals, franchises, etc.

 

[lem1955]

I'd rather own a dog kennel for vacationers. I like the clientele better;-)

 

[TromboneAl]

Man, I'm not feelin' the aloha from this poster. What a shame.

I think I'll forward this to the HVCB...

We checked out some campgrounds on Oahu for future reference. We found that camping there looks very different from other places. For example, instead of neat little REI tents, everyone seems to have humongous house tents which are covered haphazardly with huge plastic tarps. This camping style was very consistent. With no disrespect to the happy campers, the overall feel is more homeless encampment than campground.

Does that sound like a fair characterization, Nords?

 

[dex]

Very good point...I think this probably applies to most of these threads on FIRE businesses, rentals, franchises, etc.

Good point. I also think you need to add time horizon to these ideas.
If you are in your 30s or early 40s and you plan to hold onto it for 10 or more years to get a good return on investment/work then it may be OK.

If you are in you 50s or 60s do you really want to make that commitment?

 

[Nords]

This camping style was very consistent. With no disrespect to the happy campers, the overall feel is more homeless encampment than campground.
Does that sound like a fair characterization, Nords?

If you saw this on the North Shore around Mokuleia or just about everywhere on the west side past Ko'olina, then that's exactly what it is...

Unlike those areas, Bellows AFS and a few other public campgrounds get a heavy weekend family recreational business. However the two-person pup tents with a cooler of food and a couple beach chairs seem to be a thing of the past. You can't hold your head up at today's local campground unless you have a high-clearance 4WD pickup, a 10-person tent with a screened dayroom, an electrical generator for all the things you came to the "wilderness" to try to escape, a propane grill that could cook a luau piggie, two cords of lumber for your fire pit, and KCCN FM 100 blasting on your speakers for the comfort of the other campers. Bonus points if you bring a second generator & blower to set up a bounce house for the kids.

I guess I can see how that sign came into existence after all.

Me, I'll be that tiny dot on the horizon looking for peace & quiet on my longboard...

 

[dex]

KOA campground workshop
Campground for Sale - KOA

How much money will you need?

KOA recommends that you have available cash of not less than $225,000 to get started. Costs to construct a new campground can range from $750,000 to well over $1 million, and you'll need sufficient funds to get the project underway and sustain construction and operations until the campground is up and running.
New Construction Franchise Fees
The fee for a new franchise is $30,000.

 

[winnie]

not relaxing...but rewarding

Hi Brewer:

We were left a (beautiful, waterfront) seasonal RV park (100 spaces) several years ago my my FIL.

At that point, we had never a) run our own business or b) owned an rv. No-one else in the family wnanted it, so we ended up running it by default.

Class A vs Class C's vs 5th wheels -- all greek to us then. We had a very steep learning curve.

We have now been operating for six years, and business is booming. The RV industry is growing all the time, RV-ers are getting younger (and wealthier) and there are less and less RV parks with nice amenities for all these new RV-ers to go to (with land getting expensive, many long time RV parks in our area are being sold off for condos/development). Which means, if you run your park well, keep it up nicely, and are able to add all the new amenities that today's rv-ers want, you will have a great business with a lot of cash flow.

That said, it is HARD WORK. Working for mega corp was WAY EASIER.
Dealing with customers is very difficult, and if you are not the easygoing type, you will probably give yourself high-blood pressure in no time flat.

Dealing with labor issues is equally difficult. Yes, you can find temporary workampers on Workamper, but we have had very mixed results using this source. So we are thrown back on the local labor-pool which is very tight.

Bottom line, there's a lot of money to be made IF you buy the right park (i.e. close to some major attraction/or is itself a "destination park"), and cash flow will easily cover the upgrades you will need to make. But prepare to commit more physical and emotional energy to the project than you have to any other job. The typical RV park owner lasts about 7 years, according toindustry publications.

we keep at it because our park is in a beautiful natural setting and because it has been very rewarding to see our business grow every year. Also, we are seasonal, which means we have about 4 months off every year to recoup. (the park is open for 6 months but it takes about a month to open up and a month to close down.)

winnie

 

[dex]

If I was looking for a business similar to an RV park it would be a storage facility.

 

[chinaco]

Some interesting thoughts posted about businesses.

Due to the large demographic shift, there are going to be some emerging and growing (small) business opportunities in the services area.

If one decided to run it themselves on a seasonal basis a low effort/low head ache biz make sense.


I also agree with the idea some one posted... I you cannot net enough return to beat the money invested in a diversified portfolio, why do it.

In other words: (Total Rev - Personal Wages (for effort spent) - All other expenses - Taxes) should be greater that post tax market investment in a conservative diversified portfolio.

It also occurs to me that many people just wind up buying a low wage/no wage job.