Do you want to start an RV Park business? If YES, here is an analysis of how much it cost to build an RV park from scratch and run it successfully. If you are about ready to give up your normal city life in favor of something more calm, natural and outdoorsy; if you love living among other campers like yourself and sharing the unrestricted life outdoors; then you may be ready to open your own RV park business.
You can turn your love for the outdoors into a business where you get to bring together people like you at a common place, for a bit of fun and relaxation. You’ll provide a place for people who are passing through on their way to another destination and those who want to enjoy some time connecting with nature. Campers use all sorts of shelters from tents to fully contained RVs.
Recreational vehicle sales are on the rise, with Americans using RVs as a way to explore the country and take family vacations without having to pay for hotel rooms or airline tickets. Thanks to widespread Wi-Fi and cellphone service, some people even live in RVs full time, working remotely from the vehicles as they tour the country. All those RV travelers need places to safely park their vehicles.
Estimated Cost Breakdown to Open an RV park
The costs to open an RV park business depend on what you are starting with. The typical costs you have to encounter when starting an RV park business, include:
Table of Content
- a. Purchase of Land: $1,000 – $100,000 per acre
- b. Buying an Existing Campsite: $100,000 – $2million
- c. Licensing and Permitting
- d. Designing the RV park
- Other Ongoing Expenses RV Parks Encounter
- Total Cost to Build an RV Park?
- How Much Profit Can a Campground Make?
- Learn How an RV park Business Works
- 2. Consider the best location for your RV park
- 3. Think of Getting into a Franchise
- 4. Prepare Your RV Park Building Plans
- 5. Decide on a Style/Design
- 6. Consider Your Cabins and Facilities
- 7. Don’t forget your office and storage areas
- 8. Sewer, Wi-Fi and Electric
- 9. Check Out the Legalities and Regulations in Your Location
- 10. Select Activities that Build Experiences
- 11. Find Suppliers For Your RV Park
a. Purchase of Land: $1,000 – $100,000 per acre
These costs vary depending on location and the number of acres being purchased. Land may range from $1,000 an acre if has a lot of “unusable” land or upwards of $10,000 an acre if most of the land is flat, it’s on a lake or river, or it has outstanding views.
b. Buying an Existing Campsite: $100,000 – $2million
c. Licensing and Permitting
This also includes sales tax and occupancy certificates. These fees, just like your land, depend on the size of the operation, what you are offering and the location. For example, you may have to pay a fee for each soda machine you have on the premises, or a fee for each employee.
d. Designing the RV park
This can include roads, the locations of the site or sites in question, and locations of amenities you are providing. These may include playgrounds, a dog walk area, rec room, boat ramp, hiking trails, roads and bridges. Other substantial costs you have to look into include;
- Clearing of the land and creating the roads.
- Installing electric, plumbing and septic systems.
- Building bathhouses, bathrooms, fencing, rec buildings, installing a pool and building any other amenities you plan.
Other Ongoing Expenses RV Parks Encounter
RV park expenses usually vary depending on how you set your business up. These expenses may include:
- Garbage disposal
- Septic tank maintenance and cleaning
- Cleaning supplies
- Licenses and permits that need to be renewed
- Gas for camp vehicles
- Maintenance on camp vehicles
- Gravel for roads, if applicable
- Patch materials for paved roads
- Entertainment, such as paying performers
Total Cost to Build an RV Park?
The general consensus is that it costs anywhere from $15,000 to $50,000 per site to build an RV park and to get it fully functional. Your cost can get multiples among the number of camp sites you want to own.
How Much Can You Charge Visitors to your RV Park?
The charge per night for a typical RV park depends on the amenities, the location of your campground, the location of the site and the type of site. Sites might go from $10 per night to over $100 per night. Primitive sites are usually the cheapest, while sites that provide electric, water and WiFi hookups might cost more.
Also, if you have amenities such as a pool, a rec room, a playground and more, you need to charge a little more per site so that you can cover the cost of putting those amenities in, and cover the cost of maintenance for them.
How Much Profit Can a Campground Make?
Profit is dependent on many things, including the number of sites you have, whether you have cabins for rent, the business expenses and start-up liabilities, such as loans for land. A smaller campground with extensive liabilities will make less profit than a larger campground with the same amount of liabilities.
If you are able to keep costs down, your profit will be larger. Before you set pricing for your sites, you’ll need to figure your monthly overhead. This includes mortgage payments, utilities, employee costs, licensing and permitting fees and inventory. For items that are not paid monthly, divide yearly payments by 12 to get the monthly cost. Once you get your monthly overhead, you’ll be able to figure how much you need to charge for each campsite.
If you charge different prices at different times of the year, or if you give discounts, you’ll also have to figure that in. If your monthly overhead is $3,500 and you have 100 sites, you’ll have to charge $35 a night just to break even, unless you have a camp store or other amenities that you charge for.
How to Build an RV Park from Scratch in 2021
Building an RV park is a tedious job as there are a thousand and one details to consider including the heavy liftings involved, but that does not rule out the fact that this is a business that runs itself most of the time as long as you keep the wheels well oiled. That said, here are ways you can go about building your very own RV park.
Before you can talk about building an RV park, you have to first of learn how the business functions. Knowing this will help you know what and what you need to put in place to make your camp successful. If people are going to pay you to put together a dream trip for them, you need to know every detail of the industry. There is no better way to acquire this knowledge than to go work for a camping business yourself.
By interning under a seasoned industry veteran, you get a chance to really understand the proper tools and special touches that make an RV business stand out. You should be able to learn about what services, trips, and packages you can actually offer and what you can’t.
Know the right questions to ask, and questions to avoid asking clients. Find the best follow-up strategies for clients and vendors alike. Other things you need to learn about before you can confidently open your own RV park include; staffing, marketing, budgeting and profit margins. Learn what type of clients prefer which packages.
So, if you are serious about running a RV park business, you must have to work in one in order to find out the intricacies in the business. By doing so, you’ll set your business up for success and it’ll be that much easier for you to create a plan.
2. Consider the best location for your RV park
The location can make or break a business, especially for an RV park business. You need to figure out what type of facility you require and where it needs to be located. People traveling the united states by RV often naturally want to park their vehicles somewhere near popular tourist attractions, whether those are national parks, monuments or commercial tourist attractions.
Building your RV park near such a site may therefore be a good idea for you. But you have to beware of the competition, because you are not the only business that has seen that location and would want to take advantage of it. If you already have an available land for your RV park business, then all the best for you, but you have to make sure that such land is near a natural attraction so as to create that lure for visitors.
If your land is in the middle of nowhere, then you may have to lease a land in a more acceptable location. Onsite water, such as a river or a lake or even a manmade body of water, is a good sell, but you also have to make sure that you have the necessary space to build.
One way to get into the RV park business is to buy the franchise of an existing and successful RV park. Owning a franchise means that you will be responsible for its marketing, sales, accounting, customer service, and quality assurance in order for this company to succeed.
But before you start owning a franchise, you should look at your finances. Can you even afford to buy a franchise? Will you be able to borrow money? or will you be able to survive while you are waiting on the franchise to start turning a profit? Hiring an accountant may help you evaluate your finances and decide if buying a franchise is a possible option for you.
If you’re thinking about buying an existing company, it’s important to prepare a list of questions to ask when buying a business before you make a decision. Investing in a business is a big decision, and it’s certainly one that you shouldn’t make without having all the important facts understood.
4. Prepare Your RV Park Building Plans
Once you have sorted out the location you want to build your RV park, the next thing to do is to start drawing up your building plans. When it comes to RV park layout dimensions, a good rule of thumb is to have around 10 campsites per acre, with each campsite providing room for one RV, its utility connections and perhaps a fire ring.
The cost to build an RV park is usually $15,000 to $50,000 per site. This should be your budget for the number of campsites you desire. A successful RV park design often includes more than just places for people to drop anchor. A lot of times RV park visitors come with their families, so they will be looking for activities the whole family can get involved in. With that in mind, you may need to include swimming pools, go-kart tracks, laser tag games and the like, in your plan.
Some parks also include play areas for children, whether they’re traditional playgrounds or water parks, and off-leash areas for visiting dogs. Adding pavilions that can be used for events like family reunions or RV rallies and caravans, where groups of recreational vehicle aficionados will travel together to particular locations, can also help attract visitors to a park.
5. Decide on a Style/Design
Deciding on a style for your RV park business can be a challenge. You want to represent your personality, but not scare away any clients who may not share your passion. The best suggestion to strike a balance in your style and design is to research in the style and design a typical RV camper would love.
To do this, you may have to share out questionnaires. If you have friends who are into the camping lifestyle, start with them. You can also meet with your suppliers and ask their opinion. Or go look at other camps you love for inspiration.
6. Consider Your Cabins and Facilities
When building your RV park, your cabins and facilities are some of the most important hings that should grab good attention. RV parks usually include what are referred to in the industry as park model cabins. They’re essentially camping cabins on wheels that are legally classified as RVs but don’t leave the park.
Visitors without RVs of their own or with more family members than can comfortably sleep in one vehicle can rent them out to experience the RV camping life. Naturally, the cabins need to be cleaned between visitors and otherwise maintained, but they can expand the range of people who can take advantage of a particular RV park.
7. Don’t forget your office and storage areas
Considering the fact that you will spend a lot of your waking time running your RV park, you should, as a matter of necessity, give more attention to your office. The place has to be done in such a way that you can remain comfortable in it even if you are spending long hours there. You may also want to build storage areas for your equipment and other facilities for your workers.
8. Sewer, Wi-Fi and Electric
Park visitors generate a lot of trash and sewage, and as such your sanitation system needs up to par to be able to meet up with the pressure. Different state and local regulations may affect how you dispose of trash, such as whether you recycle bottles or cans, and whether you connect to a public sewer network or build your own self-contained septic system.
Also, you have to make provisions to clean out your septic system, every three to five years. Also important to today’s RV parks is a steady Wi-Fi connection, so visitors can upload photos to social media, check in with work and play video games.
There are companies that specialize in building out Wi-Fi throughout an RV park, and there may be multiple Internet service providers who can provide service in your area, so shop around for the best deals on connecting your park and customers. Electrical connectivity to RVs is also commonly provided and a great necessity.
9. Check Out the Legalities and Regulations in Your Location
Different jurisdictions have different requirements for RV parks. Generally, as with other types of property development, more densely populated cities will have stricter requirements than more loosely populated areas. Many parks try to adhere to the National Fire Protection Association’s standard for RV parks, known as NFPA 1194, whether it’s legally mandated or not.
Some insurers may have their own standards for parks to meet to get favorable rates. So, while building you RV park, you should try to find out the law and rules that apply for RV parks for that you can follow suit.
If your RV park is near a national monument or the site of a popular state fair or music festival, you may not need to do much to draw customers in. But if you’re in a remote remote area, you might want to set up your own events to woo potential visitors and keep them coming back.
That may be especially true if you’re in a colder area and want to take advantage of a limited tourist season. Some parks create sporting events to attract fishing or softball fans, and some put on family-friendly events that will help visitors create memories that could keep them coming back for generations. Getting free press via social media posts can also help.
Online marketing is hugely important in a business today, with many tourists planning their excursions with the help of a computer or smart phone. In addition to social media and business websites, parks can often arrange to be listed through national or state associations of RV parks so would-be campers know what types of facilities they have to offer.
Some also arrange deals with RV dealers to give discounts to purchasers, so that RV buyers get a coupon when they get their vehicle and start planning their future motorized vacations.
11. Find Suppliers For Your RV Park
What kind of supplies do you need for your campground business? As an RV park business, you can make money not only from your customers but from the suppliers that you will be promoting their products. Contact those suppliers and talk about your rates on materials and valuable supplies with them ahead of time.
RV parks are a very high-yielding investment, with returns from 10% to 20%+ on your money. RV parks are among the highest-yielding of all real estate asset classes. So if your goal is to maximize the return on your money, RV parks are not a bad starting spot.
Another strength for RV parks is the fact that most are owned by smaller owners who have no debt and, therefore, the ability to carry the financing on the transaction. When the seller carries the financing at a low interest rate, it compounds the yield you can make on your money thanks to leverage. Leverage, as long as the interest rate on the loan is lower than the cap rate of the deal, will give you an even higher return.
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