Are you considering building an RV park but you are doubtful? If YES, here is a detailed analysis of the pros and cons of starting an RV park business.
Every business comes with obvious high and low points and so is the same with owning a campground or an RV park. Before you can start a successful RV park business, you have to put a lot of things into consideration. First of all, you have to find out if owning and running a campground is worth the stress when it comes to return on investment.
With the correct measures and a lot of hard work, the answer is that a campground or RV park can absolutely become a profitable investment.
But before you jump headlong into starting this business, you have to consider the pros and cons of this business investment based on your location, rules involved and the finances at hand. Having all these facts would help you make better and more informed decisions that can help you build a successful business.
Pros of Owning a Campground
It has been proven over and over that owning a campground is not only profitable, it is also an incredibly rewarding experience. This is because this business comes with a lot of merits that do not only involve earning a reasonably predictable pay.
If you are wondering what you stand to gain if you open an RV park or campground, the list is quite mouthwatering. They include;
You get to call the shots
Running a campground is really not easy, but while you will be busy, you get to be your own boss. This means that you have the freedom to set your schedule based on the needs of your park and your own personal agenda. You can even plan your time in such a way that you can have other side businesses with none of them clashing. This is especially possible during off season periods when you get to have a lot of time in your hands.
2. Campgrounds Provide Resilient, Recession-proof Income
Unlike some other forms of real estate, RV parks are well insulated from economic downturns. This is because they offer low-cost housing, and the demand for this only grows if wages stagnate or unemployment rises. Permanent mobile homes also offer an excellent opportunity for young couples and first-time home buyers of modest means to rent or purchase a home at a much lower cost than other options.
Another reason why this industry is basically recession proof is that the traditional American road trip isn’t going to disappear from the culture anytime soon. RVing remains a popular means of travelling for young and old alike and RV owners will always need a clean, safe and reliable place to park their home on wheels.
3. Campgrounds have high potentials of earning profits
Another major pro of this business is that campgrounds, RV parks, and resorts are all cash businesses. It may take you sometime to get properly known, but once you start carving a niche for your business, you can start having steady patronage.
Give yourself some time as you learn to manage a campground or resort. How much profit a campground produces depends on the first few years of hard work and proper management. But it is all worth it and with time your investment can pay for itself and give you something to live on, or even open another park.
4. It is a seasonal business
While your summers may be busy, campgrounds and RV parks are usually seasonal businesses that focuses on summer and spring. You can also get good patronage during autumn. You can take the winter off and go somewhere warm to get yourself refreshed and ready for the next season. Trust me, the rest will be worth it.
5. Cost Free Living
Many campgrounds and RV parks have an owner’s home on the premise so you can enjoy a cost-free living. You do not have to worry about paying a mortgage and other such hassles that come with it.
Cons of Owning a Campground
The first thing anyone considering owning a campground or RV park needs to understand is that this business is a lot of work. Summers are generally back-breaking. In the Midwest, this is a service industry that generally speaking is always busy all through the summer months.
You always have to be ready to provide a great experience for your guests, no excuses. Customers expect nothing less than your best.
This means that every weekend when guests are relaxing and enjoying their vacation, it is your job to put on your best attitude, best customer service, and best smile. It can be exhausting, but customers look for that “wow” experience that will have them coming back year after year.
2. You have to make a lot of sacrifices
One of the more difficult cons of owning a campground, RV park, or resort is the fact that you will miss many family events especially in the first years of business.
The hard truth is that most of your families will celebrate weddings, birthdays, anniversaries, graduations, etc on the weekends when you’re the busiest. Until you are able to get your campground solidly on its feet, this is a reality you will have to live with.
3. You may not breakeven the first year
Depending on your location and the kind of publicity you use, you may very likely not break even within the first year of starting the business. This is because Campers already have parks where they are loyal to and you have to prove to be exceptional before they can trust you to try out your services.
You may have to do a lot of promos and offer various incentives, and these usually don’t look good on the balance sheet on the first year, though it is for the greater good.
4. You need loads of back up cash
For your campground to be successful, you will need to have back up cash. You will need to have plenty of money to support the park for quite some time.
Don’t expect to start raking in the cash because it does take time to get your name out and there will likely be times when you have almost no one in your camp and yet you are still paying for utilities, your workers, insurance and your loans. There will be lots of money flowing out and not much return for quite some time, so you need some back up.
5. You need to develop tough skin
If you are going to be successful in the campground business, you have to develop thick skin because you would have to take tough decisions. One of these decisions is evicting errant campers. If you are all soft with a lot of human feelings, you may have to keep on tolerating obnoxious campers that can drive away your clients.
While there are a lot of factors to consider before buying and owning a campground, the end result can be tremendous. The work that goes into owning your campground may seem daunting, but it is all worth it for the benefits that come with it.
As a cash business that is busy through the summer while also providing you with cost-free living arrangements on the property, owning a campground can be a smart investment that can provide you an avenue to earn huge profit.