Feels like a step away from owning a parking lot Have to provide some utilities or some such Rocket River
My uncle had the bright idea to start a trailer park with a side lot for RVs as a post retirement family business -- went well for a while but just too much stress and work even with a maintenance service. His kids didn't have any serious interest in helping him run it long term so it just became a hassle -- I haven't talked to him in a while but I believe he sold it. The park made money so overall a good investment (about 10 years).
A family member ( by marriage) has a park that is close to the beach in corpus. It’s a nice park with a great location and pretty high end RVs. I don’t know the finance details but it seems like they have good mailbox money. There is a communal hall and pool area to go along with the usual pads and hookup accessories. I guess like most things, location location location.
Spent some time researching this about a year ago. As I’m sure you’re aware you have your trailer park type RV park and your campground RV park. The former can be pretty sparse in terms of amenities and the latter is usually only a good idea if you are reasonably close to a river,’lake, ocean, etc. The upfront costs can be huge if you are just developing raw land. Primarily to run the utilities, and then you need to choose your pads and roads. Cement pads with asphalt roads tends to look great but is expensive. You’ll see a lot of parks with just crushed gravel which is cheaper but then you have weeds, etc. it can take years for new trees to grow and provide shade and that is highly desirable for tenants. Then you have to choose your common areas like bathrooms, laundry, an office, a pool, dog park, playground, storage sheds, etc. Will you offer WiFi? How will you charge your utilities? Septic? Propane on site? Ultimately if you look at purchasing an existing park you’ll pay around a 10% Cap rate or 10 times the profit. So a park earning a $100k a year in net income would on average cost about a million to buy. You could flip that around and say it would cost you around a million to build a park that earns $100k. If your projections don’t equate to at least 10% I wouldn’t do the deal. Higher cap rates are better as you are earning a greater ROI. We abandoned the idea because the upfront costs are just too high and the CAGR is too low. The ironic thing is you can make more $ on an operating business at far less upfront cost. But banks even the SBA don’t like to lend on collateral poor businesses even if they are very profitable. Explaining to a loan officer about Goodwill and they act like you are from Mars. So you’d have better luck getting financing on an RV park that costs more and earns less profit than an operating business in a leased building just because of the collateral. Anyway rant over good luck!
This…. The smell of meth, hamburger helper and gangrene….. ugh! The only thing worse are carnival folk.
I rented an RV once and found RV folks to be a pleasant surprise as they are friendly and kind. Think retired hippies. Now, trailer park folks, I imagine, is not the same demographic.
My best friend is in the process of building one. He bought the land 3 years ago,and has spent the first 3 years just getting permits. The permits are very expensive and they expire yearly, so if there are delays you lose that investment. Also, all the neighbors try to sabotage you because they assume everything is going to be a trailer park, when in reality, the average high end RV is much more expensive than their house. He is having difficulty gauging his costs with the massive inflation that is happening.
Put in a driving range. Credit card operated golf ball dispenser. Hire a kid to mow and scoop balls a couple of times a day. Even better make it coin operated....tax free $$$.
some folks near us just built a new one, kind of interesting to see an example of a newly-constructed park that just opened https://fingerlakesrvresort.com/#home
I have a good friend who put 4 short term rental cabins on 2 acres. https://www.expedia.com/Austin-Hotels-Julies-Cabins-Luxury-Retreat-1.h57916168.Hotel-Information He will pay off his investment in around 3 years and is looking to buy more land and recreate it on the coast. I am looking to invest in some as well if you are interested in partners... DD
All in with AC and build out they were around 60k a piece. The amenities there are killer he bought a 5th cabin and made it a small arcade and laundry room, so he does his own linens etc, and doesn't have to pay a service, he drilled his own well, and there are no kids or pets allowed. There is an outdoor kitchen, firepit and grill, hammocks, huge hot tub, and just everything you can think of.... The one thing he didn't do which he wishes he did was put solar panels on the roof or as a outdoor patio.... DD
