How to Start an RV Park: Building Your Dream Campground
I used to invest solely in apartments until I found the hidden gems of real estate: RV parks. This asset class, along with mobile home parks, are some of the most overlooked.
There’s no better way to turn a vacant tract of land into a cash cow. But as with any type of real estate project, investors must understand the process and perform due diligence to ensure success.
In this article, we’ll do just that. Let’s get going….
Join the Passive Investors CircleWhy RV Parks?
The RV park industry has experienced significant growth in recent years thanks to an increasing number of people owning or renting recreational vehicles (RVs).
Travelers find RVs a cost-effective and flexible alternative to traditional vacationing, such as using hotels.
As a result, the demand for accessible and safe locations to park these vehicles has risen, creating lucrative business opportunities for campground and RV park owners.
Differences Between RV Parks, Mobile Home Parks, and Campgrounds
Occasionally, people confuse RV parks with mobile home parks. But this isn’t the case.
If you want to learn more about mobile home park investing, check out this video:
While RV parks, mobile home parks, and campgrounds are all destinations for temporary or permanent living, they cater to different types of tenants:
| Type | Description | Amenities |
|---|---|---|
| RV Parks | Designed for recreational vehicles; caters to travelers. | Electrical and water hookups, sewage disposal, Wi-Fi. |
| Mobile Home Parks | Caters to long-term residents living in manufactured homes. | Laundry rooms, clubhouses, swimming pools. |
| Campgrounds | Targeted at campers in tents or cabins; nature-focused. | Picnic tables, fire rings, restroom facilities. |
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Sign up for my newsletterPlanning Your RV Park Business
Creating a Comprehensive RV Park Business Plan
A well-crafted RV park business plan is essential for those who want to start their own RV park. This plan should include information about the park’s location, target market, facility layout, amenities, pricing strategy, and marketing efforts.
Additionally, it should outline the financial projections, including revenue, expenses, and potential profits or losses.
Related article: How to Create a Winning RV Park Business Plan
Conducting Market Research for Target Market Analysis
Before diving into the RV park business, conducting thorough market research to identify your target market and understand their preferences and needs is crucial.
This research could entail analyzing existing RV parks nearby and evaluating their:
- sizes
- amenity offerings
- pricing strategies
- demand
- occupancy rates
If you want to see how I went undercover to check out an existing RV park we eventually purchased, check out this video:
How To Choose Your Business Structure
You, the business owner, must select an appropriate business structure when starting an RV park. This will significantly impact operations, taxes, and personal liabilities.
Common business structures include sole proprietorship, limited liability company (LLC), and S Corporation. Each structure has its advantages and limitations (check with your CPA):
- Sole Proprietorship: Easy to set up and manage, but offers no personal liability protection.
- Limited Liability Company: Protects personal assets, provides flexible management, and is easier to run than a corporation.
- S Corporation: Combines benefits of corporations and partnerships, offers personal liability protection, and preferential tax treatment.
Naming Your RV Park
Choosing the right name for your RV park significantly attracts customers and establishes brand identity.
For example, I recently acquired a park in my hometown (Monroe, LA). We’re located in Ouachita Parish, and the park was called Ouachita RV Park.
Because of the name and location, we decided NOT to change it.
When selecting a business name, consider the following tips:
- Check for name availability to prevent trademark infringement.
- Incorporate keywords related to RV parks and camping.
- Ensure it’s easy to pronounce, spell, and remember.
- Create a name that reflects the park’s theme or location-related features.
How To Find the Right Location
Assessing Local Zoning and Regulations
One of the important things new park owners typically overlook is the local zoning laws and regulations that may govern the chosen location.
Begin by researching the specific requirements for RV parks in your area, as different states and municipalities have their own set of rules.
Regulations may pertain to the following aspects:
- Size and layout of the RV park
- Environmental considerations
- Required infrastructure and utilities
- Health and safety provisions
Evaluating Cost and Potential of Land
The cost of the land for your RV park will greatly impact your financial success.
It’s important to consider factors such as:
| Consideration | Details |
|---|---|
| Land Size | Aim for a plot of at least 3 acres for adequate space. |
| Accessibility | Convenient access to major roadways enhances visibility and attractiveness. |
| Topography | Assess for potential issues like flooding or drainage problems. |
| Infrastructure | Estimate costs for installing utilities and amenities such as water, waste disposal, and electric hookups. |
Note: Be sure to analyze comparable land sales in your desired area to understand real estate values and determine a reasonable budget for your project.
When choosing a location, keep these factors in mind:
- Proximity to outdoor and recreational activities (e.g., hiking trails, rivers, beaches)
- Nearby tourist destinations (e.g., national parks, theme parks)
- Access to essential services (e.g., grocery stores, gas stations, medical facilities)
- Ease of reaching your park (e.g., proximity to major highways, public transportation)
Financing Your RV Park
#1. Calculating Startup Costs
When planning to start an RV park, it’s important to calculate the initial investment and startup costs.
Here’s a brief breakdown:
| Financial Consideration | Details |
|---|---|
| Land Acquisition | Cost varies by location, size, and accessibility of the land. |
| Construction Costs | Includes building facilities like restrooms, showers, laundry, and recreational areas. |
| Utilities | Electricity, water, and sewage connections. |
| Permits and Regulations | Compliance with local zoning laws, building codes, and other regulations. |
#2. Financing Options
There are several options to consider when financing your RV park.
a. Bank Loan
The most common method is obtaining a bank loan.
Banks may be more inclined to finance RV park projects backed by a solid business plan and promising industry growth.
Be prepared to present a detailed business plan that includes financial projections, market analysis, and a strong marketing strategy.
b. Small Business Administration (SBA) Loan
Another option is to explore Small Business Administration (SBA) loans.
These are specifically designed to assist small businesses, including RV parks, with financing.
Depending on the loan program, SBA loans can help cover costs such as new construction, business expansion, and refinancing for lower payments.
#3. Managing Financial Obligations
Consider the following strategies to manage financial obligations efficiently:
Budgeting
Create a realistic budget that includes all expenses and keep track of it consistently. This will help ensure your business stays financially healthy. It also allows you to plan for contingencies or unexpected costs.
Timely payments
Make loan payments and property tax payments on time to avoid penalties and maintain a good credit history.
Business credit card
Obtain a business credit card to separate personal and business finances. This makes it easier to track expenses and build business credit.
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Sign up for my newsletterLaunching Your RV Park
The first step in launching your own RV park is to obtain the necessary permits and legal documents.
This typically includes zoning permits, environmental reviews, and operating licenses from the local and state government authorities.
Additionally, you may need to consult with county health departments and the department of health to ensure compliance with any sanitation regulations. This is important since septic tanks and other waste management systems will be at play.
Setting up Utilities and Sanitation Services
Once permits and legal documents are in order, you’ll have to focus on setting up utilities and sanitation services to cater to your guests’ needs.
This usually includes:
| Infrastructure Consideration | Details |
|---|---|
| Water Supply | Arrange for water wells or connections to a municipal water supply for running water. |
| Electricity | Connect to a power grid or invest in alternative energy solutions, such as solar panels. |
| Sanitation System | Properly install and maintain septic tanks and sewage connections for a hygienic environment. |
Establishing an Online Presence
To gain visibility and attract customers to your RV park, consider the following steps:
- Create a user-friendly website with essential information about the park, such as location, amenities, and pricing.
- Set up social media accounts on popular platforms like Facebook, Instagram, and Twitter and post engaging content.
- Advertise your RV park through online ads and maintain an up-to-date internet connection throughout the park to facilitate guests staying connected during their stay.
- Encourage online reviews and word-of-mouth recommendations to increase credibility and trust among potential customers.
Planning the Grand Opening
A successful grand opening can set the tone for your future RV park business. To ensure the event goes smoothly, here are some strategic steps to follow:
| Step | Action Items |
|---|---|
| Finalize Completion | Ensure all amenities are functional and the park is ready for guests. |
| Plan Grand Opening Event | Organize refreshments, tours, and promotional activities to engage the community and guests. |
| Collaborate with Local Businesses | Form partnerships and create a support network with local businesses. |
| Promote the Event | Use social media, local newspapers, or influencers in the RV community for promotion. |
| Prepare for the Unexpected | Anticipate challenges related to parking, staffing, or weather on the opening day. |
Running Your RV Park
Implementing Efficient Operation Systems
Running a successful RV park business requires efficient operational systems. These systems help you manage finances, reservation, maintenance, and customer service.
Investing time and effort in setting up these systems from the beginning is essential.
For instance, adopting a modern reservation system (we use Campspot software) can reduce manual work and ensure accurate scheduling and booking of RV slots.
Additionally, focusing on park maintenance is paramount.
An organized maintenance schedule ensures regular upkeep and proper repairs of the existing park infrastructure. This includes maintaining water, electricity, sewage systems, landscaping, and cleanliness.
Focusing on Customer Service and Satisfaction
A strong emphasis on customer service is essential for running a successful park.
This involves providing amenities that fulfill campers’ needs, such as a well-stocked general store, clean restrooms, and laundry facilities.
Additionally, it is crucial to engage with guests by offering various outdoor activities like hiking, fishing, and swimming.
- Food amenities: Considering adding food-based amenities, such as food trucks or a snack bar, to provide campers with convenient meal options.
- Pet-friendly grounds: Many RV travelers bring pets along on their adventures, so ensure your park is pet-friendly and accommodating.
- Wi-Fi connectivity: Providing reliable Wi-Fi can help improve customer satisfaction and keep campers connected during their stay.
Growing Your RV Park Business
As your RV park starts to thrive, you may want to grow and expand your business.
One option is to expand the existing park, adding new amenities and improving existing services to attract more guests.
Another option is to consider acquiring additional land or even purchasing an existing campground to diversify your portfolio.
Before taking this route, thorough due diligence and research on the existing campground’s financial health and customer satisfaction is necessary.
Marketing activities, such as utilizing social media and partnering with travel agencies, can further drive growth and attract more guests to your park.
Frequently Asked Questions
What types of amenities should be included in an RV park for it to be attractive to campers?
An attractive RV park should offer a range of amenities to accommodate the diverse needs of campers.
These may include electricity and water hook-ups, dump stations, restrooms with showers, laundry facilities, Wi-Fi access, and pet-friendly areas.
Additionally, recreational amenities such as playgrounds, swimming pools, and barbecue pits can boost the park’s appeal.
What specific zoning requirements are necessary for the development of an RV park?
Zoning requirements differ from one jurisdiction to another, so it’s crucial to research local regulations before purchasing land for an RV park.
Typically, zoning laws dictate the allowed density, setbacks, and land usage in any proposed area. Consult with local officials and obtain the necessary approvals to avoid potential issues.
How can I create an effective business plan for a new RV park?
An effective business plan for a new RV park requires thorough research, analysis, and planning.
Key components include market analysis of the target area, anticipated costs for land acquisition and development, revenue projections based on occupancy rates, plans for marketing and advertising, and a clear explanation of the facilities and services provided.
What are the essential permits required to legally open a campground?
The permits required to open a campground may vary according to local regulations.
It’s important to consult with local authorities and outline any necessary permits, which might include zoning permits, health and safety permits, environmental permits, and building permits.
Acquire all relevant permits before construction begins to avoid legal complications.
How profitable is the RV park industry, and what factors contribute to a park’s financial success?
The RV park industry has proven to be a profitable venture for many entrepreneurs.
Factors contributing to an RV park’s financial success include its location and accessibility, quality and range of amenities, effective marketing strategies, and regularly evaluating and adapting to changing market dynamics.
What is the recommended business structure for an RV park to optimize operational efficiency?
Choosing the right business structure is essential for optimizing operational efficiency and minimizing liabilities.
Limited liability companies (LLCs) and S corporations are popular choices for RV park owners due to their tax advantages and flexibility.
Consult with an attorney or accountant to determine the most suitable business structure for your specific situation.