RVing has seen a resurgence in popularity, with millions of people having the urge to get away from busy city life and enjoy nature. With so many people getting on the road and camping in RV parks across the U.S., owning an RV park may seem like a good business move. But, is owning an RV park profitable?
Th initial cost of buying an RV park is between $50,000 to over $3,000,000; This is true for both the procurement of an already established park, and for the buying of essentials like land, parking pad installation, electric and water hookups, septic system installation, licensing, permitting, and construction costs, if building from scratch. Although the initial costs are steep, RV park owners see, on average, a 10% to 15% return on investment with $60,000 earnings annually.
The following is a deep dive into what you should consider if you’re thinking of investing in an RV park.
#1. Established RV Park VS Starting from Scratch
Purchasing an already established RV park can take much of the start-up headaches away from new owners. Typically, an RV park will already have the essentials: Parking pads, gravel, electric/water hookups (if offered), and septic system installed. Considering that each of these amenities- and county requirements- cost tens of thousands of dollars to install, construct, permit and license, having this taken care of at the start is tempting for investors.
To see actual RV park listings, check out RV Park Store.
Downsides to purchasing an already-running RV park include: Not having the ability to choose exactly where the RV park is located, probable repair costs upon purchase (ie cracked landing pads, faulty electricity wiring, etc.), and of course, the hefty initial purchasing cost. Although everything in the park is technically pre-established, purchasers are at the mercy of location, county rules, repairs and maintenance costs from the get-go.
#2. Land
If you’re thinking of building an RV park from the ground up, the first thing to consider is land, specifically: Location, cost, and restrictions.
Location
Finding the best location for an RV park is a hard task. Not all states are RV-friendly, business-friendly, or have topography that’s attractive to potential visitors. Areas that get the most traffic are places near nature, national parks, and even amusement parks.
Cost
Acres of land are available for purchase starting at $1,000… but don’t be fooled by the low price tag of some parcels. Land this cheap is typically fraught with unseen problems, like: Flood plains, typhoons, and stone-like soil making it impenetrable for sturdy construction.
A low price point might seem like a steal, but the devil is hiding in the details.
Beyond shoddy, cheap land, consider how much land you can afford: Will this be a cash purchase (best option), or is a loan needed? While RV park owners see an average of 10% to 15% ROI on their investment, take into consideration monthly payments, and the amount of time it will take to pay off a large loan.
Restrictions
One of the biggest hurdles to land usage is county restrictions. Most people looking for land have the misconception that land can be used at the owner’s sole discretion. This is, emphatically, not true.
Restrictions are rules put in place, differing from county to county, that concern the following:
- Land Use (Commercial, Industrial, Recreational, Agricultural)
- Utility Lines
- Septic Tank Installation
- Types of Structures Allowed
- Minimum Size of Structures
- Height of Structures
- Time to Build (homes)
- Number of Dwellings Permitted on Land
- Number of Bedrooms Required
- Farm Animals / Ranching / Hunting
To the shock of potential land purchasers, these zoning rules and restrictions make establishing a homestead, tiny house, RV, or RV Park business, a legal gauntlet.
For a fully detailed explanation on how to buy land, check out our helpful guide here.
#3. Building Costs
Building and construction costs associated with RV parks are a large expense. If you plan on offering a non-hookup site- meaning no electric, water, or septic available- you can cut down on the costs.
However, landscaping, land-prep, and the laying down of concrete slabs for parking pads can still cost between $4 to $8 per cubic foot. The thickness of the concrete, size, material costs, and labor can add up to $3500, and upwards of $7500 (for one, single slab).
Another consideration to take into account is this: If amenities are cut to save money on the initial investment, what are the long-term business affects? Guests to RV parks are often looking for hookups, and without them, RV park owners may get less business. Also, the pricing of RV park stays will be lowered, as creature comforts offered to travelers is limited.
Electricity
Running electrical to your site is another large expense. If land is far off grid, and not near a city, getting electrical to your land can easily cost between $10,000 to $30,000 (and maybe more!).
Potential land purchases should make sure to inquire about access and proximity to the electrical grid and factor in the cost.
Septic
Septic systems are dug underground, and consist of pipes and a large tank that holds sewage from RVers visiting the RV park. Eventually, this tank will fill up, and will require a professional to extract the sewage.
Installation of septic systems can cost between $5000 to over $20,000. Costs include an inspection of the site, schematics, soil testing, and installation.
Water
Unless zoned as Unrestricted Land, most counties will require land owners to have some form of water access: Municipal or via well.
Expect to pay anywhere between $2000 to $25,000 to bring water access to your land.
#4. ROI and Annual Earnings
On average, RV park owners can expect to earn 10% to 15% ROI. Compared to other investments, this can be a great long-term profit-maker.
RV park owners do high up-front expenses- regardless if purchasing an already established park, or starting from scratch- but, on average, stand to earn $60,000 annually.
The value of well-kept RV parks can reach well above $1,000,000, and can serve as a multi-generational investment, or sold in the future for a pretty penny.
Wrap Up
RV park owners can earn a 10% to 15% ROI, which makes the prospect of ownership tempting.
When thinking of RV park ownership, make sure to consider:
- Cost of purchasing an established park versus a ground-up approach
- Land costs
- Land zoning and restrictions
- Location
- Building Costs
- Permits and licenses
- Installation costs (electricity, water, septic)
Initial costs to buy (or build) an RV park are steep, but the long-term profits can earn a dependable- albeit modest- average salary of almost $60,000 annually.
Make sure to do you due diligence and research the rules, regulations, caveats, and costs before jumping in to such a business endeavor.