What are the ongoing expenses of an RV Park? How do you reduce your expenses in an RV Park business? Here is everything you need to know.
Recreational vehicle sales are currently on the rise with Americans using RVs as a means to explore the country and take family vacations without having to pay for hotel rooms or airline tickets. Thanks to widespread Wi-Fi and cell phone service, a good number of people even live in RVs full time, working remotely from the vehicles as they tour the country.
Note that RV travelers require places to safely park their vehicles, so anyone who wants to build RV parks should make sure to think about the viability of the location they are considering, what amenities they will provide, how much space they will need and legal requirements in their jurisdiction.
Note that an RV park generates its main income by renting out sites. It may also have a small store that is stocked with camping gear, non-perishable food, and other items that campers may find useful. A popular seller is ice, so adding an ice freezer will also make some money for the business.
According to reports, the charge per night depends on the amenities, the location of your RV Park, the location of the site, and the type of site. Sites might go from $10 per night to over $100 per night. Primitive sites would be the cheapest, while sites that provide electric, water, and WiFi hook-ups might cost more.
In addition, if you have amenities like a pool, rec. room, playground, and more, you need to charge a little more per site so that you can cover the cost of these amenities and their maintenance.
Note that running an RV park brings a mix of factors that will drive your expenses. While some parks are generally inexpensive to operate, others are incredibly pricey. Factors such as location, zoning, competition, level of amenities, volume of guests, seasonal impacts, and availability of resources all play a part in driving your costs.
Ongoing Operating Expenses of an RV Park
Employees and Maintenance
Let’s imagine your park is on a large 15-30 acre lot. Suddenly, a rainstorm happens, and a few days later your grass is three inches higher than before and full of mud tracks and puddles. Without further analysis, you have attracted a host of mosquitoes and all your footpaths are underwater.
Notably, you will need maintenance and landscapers to keep your land looking fresh and perfect for camper. Some RV parks have their employees pulling double-duty, while they man the welcoming center, the facilities, and landscaping all at once.
This can help cut costs, but can also result in some inexperienced maintenance depending on whether or not your employees are seasonal or veterans.
RV parks can also choose to hire private contractors or third-party landscaping teams. While these have an increased cost (between $500.00 – $2,000.00 packages) you are more likely to have a pristine, beautiful place for your campers to call home.
For instance, your sanitation systems need to be up to snuff to handle the trash and sewage produced by your park’s visitors. 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.
A good septic system has to be cleaned out every three to five years. Also have it in mind that today’s RV parks have 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 installing Wi-Fi throughout the 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.
Marketing and Advertising
Marketing, even in your local media, can cost hundreds of dollars for short run times. Leveraging online social media such as Facebook and Instagram can definitely help you cut some of those costs.
If your photos are only in the off-season with dead leaves or frost on the ground and no people in the photos, you’re probably going to discourage potential guests. Therefore, keep your events, happy photos with smiling campers and sunny spots on the front of your page!
Include photos of dogs to show you are pet-friendly! Have a lake or pond? Show them that winning catch! Mostly, remember that you don’t have to break the bank to advertise or market your new business!
Legalities and Regulations
Note that different jurisdictions have different regulations and 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 is legally mandated or not. Some insurers may have their own standards for parks to meet to get favorable rates.
According to reports, property taxes averaged 3.6 percent of total operating revenue, and insurance costs averaged 0.8 percent. To boost your profit margin, you will have to review your property assessment and your insurance. How does yours stack up?
Are both valuing your business and property correctly? If your numbers are unexpectedly high, you may wish to contest your property assessment or investigate more affordable insurance options in your area.
Operating a business comes with some costs and those costs are incredibly important to the viability of your enterprise. Also note that these expenses will vary, depending on how you set your business up. However, a successful RV park owner can make from $50,000-$90,000 a year.
A successful RV park itself can end up being worth hundreds of thousands of dollars depending on its popularity, location, and assets.