Starting small RV Park on Land I bought

Starting Out
8yFollow

Starting small RV Park on Land I bought

David SMith
Member since 2018 · 3 posts · 0 votes

Hi
New to forum. 1st timer getting started. I appreciate everyone's input on this. Not really even sure where to start on my current thoughs to here it all is...
I own a house NE of Dallas in a rural area not in city limits. Looking to downsize in the next year or two since daughter is in college and son is HS freshman. I have a $100k HELOC to contributed to college. Not planning on using most of it, but went ahead and got the mas HELOC I could. I can net between $180 and $200k from sale of house.
As part of my plan to downsizie, I recently purchased a 2.3 acre corner lot (about 1.5 acres useable due to creek) about 1.5 miles from my current house. It has city water and electric and an outdated septic which would have to be replaced in order to put a house on this land. The land payment is $789, I used about $20k of HELOC for downpayment.
Currently, on the land I purchased, there is a small mobile home on it that is currently being rented out at $600 a month plus water and electric with a least due in November and tenant will renew in 6 month increments.
Now the RV part. There are at least 3 10-30 pad RV sites in my area that are full, one was just built and filled up as soon as it was done. There are no industries around, I believe it is due to demographics and people not being able to afford to buy houses/propery but wanting to live in the area due to proximity to Dallas and or other cities close by which are booming.
An RV park I am talking about is NOT like most of the ones I see on the other forum questions. There are no amenities such as fishing, laundry, showers, rec areas, etc, just pads approx 30x60, an electric pedestal, and water, with crushed rock.
I have an idea to put some RV pads on the land I bought and rent them out. I have contacted a Sanitarian who used to work for the county appraisal office, he said he has quite a bit of experience with RV parks. One concern I had was septic. He did say that a setptic designed for up to a 3k sq foot house would service quite a few RVs. I would have to intall new septic any way if I build on the property so I see that as a wash.
A few other factors:

I am handy with electrical, plumbing etc.
I have 6 acres of land at current house, and can get a good supply of fill dirt.
I own a large tractor with a box blade and loader that I can work pretty well.
A neighbor has a dumtruck to haul fill dirt, and there is a place that delives crushed rock not too far away for a decent price.
Need some advice, any questions welcome.
thamks!
ds

0Reply
67 views

Most Popular Reply

Belinda Lopez
Specialist · Houston, TX · Member since 2012 · 579 posts · 301 votes
8y

Hi David,

  it sounds like you have the start of a great plan for retirement!  Many long-time owners started modestly and used proceeds from the first few spaces to add on.  One owner adds anywhere from 5- 10 new spaces as that was manageable in terms of costs and also allowed the spaces to fill up pretty quickly instead of adding 20 or more and having empty sites.  It's a balance. 

There also seems to be a certain size where management becomes exponential instead of incremental.  Several parks we've been involved, once they hit the 72+ spaces, suddenly required a whole lot more hands-on management.  Under that size, the park was able to be managed by a single on-site manager and part-time maintenance.  Under that size everyone knows everyone and the park can self-regulate any problems.  Over that amount and the manager can lose track of exactly who is coming and going.

The park you describe is what I call a residential park versus a resort park with many amenities and seasonal guests.  Residential parks are very similar to mobile home parks as the owner can bill monthly and bill back electric and other utilities on a monthly basis.  We've seen some long-time "guests" stay 12 - 15 years in one park.  We regularly see school buses in these parks as well.  Folks just want a safe, clean and affordable place.  Some have pets that apartments won't allow.  Almost all prefer having their own space instead of an apartment.

Pricing to put in the pad sites will vary depending on your location but can run anywhere from$8k - $20k from raw dirt to finished site.  This includes your permits, utilities, pad materials, labor etc.  Yes, you can save some but doing it yourself but there are also price breaks when doing multiple sites at a time vs. just one. 

We also learned that concrete or paved sites are not worth it to folks if there is a huge price difference.  What they really wanted was well draining, level sites with shade being the only other thing folks would pay more for a premium site.  Some of the most profitable parks are not "pretty parks" but have other features that make folks come and stay.  

2Reply
See this reply in the discussion

6 Replies

Jump to latestLatest
  • Belinda Lopez
    Specialist · Houston, TX · Member since 2012 · 579 posts · 301 votes
    8y

    Hi David,

      it sounds like you have the start of a great plan for retirement!  Many long-time owners started modestly and used proceeds from the first few spaces to add on.  One owner adds anywhere from 5- 10 new spaces as that was manageable in terms of costs and also allowed the spaces to fill up pretty quickly instead of adding 20 or more and having empty sites.  It's a balance. 

    There also seems to be a certain size where management becomes exponential instead of incremental.  Several parks we've been involved, once they hit the 72+ spaces, suddenly required a whole lot more hands-on management.  Under that size, the park was able to be managed by a single on-site manager and part-time maintenance.  Under that size everyone knows everyone and the park can self-regulate any problems.  Over that amount and the manager can lose track of exactly who is coming and going.

    The park you describe is what I call a residential park versus a resort park with many amenities and seasonal guests.  Residential parks are very similar to mobile home parks as the owner can bill monthly and bill back electric and other utilities on a monthly basis.  We've seen some long-time "guests" stay 12 - 15 years in one park.  We regularly see school buses in these parks as well.  Folks just want a safe, clean and affordable place.  Some have pets that apartments won't allow.  Almost all prefer having their own space instead of an apartment.

    Pricing to put in the pad sites will vary depending on your location but can run anywhere from$8k - $20k from raw dirt to finished site.  This includes your permits, utilities, pad materials, labor etc.  Yes, you can save some but doing it yourself but there are also price breaks when doing multiple sites at a time vs. just one. 

    We also learned that concrete or paved sites are not worth it to folks if there is a huge price difference.  What they really wanted was well draining, level sites with shade being the only other thing folks would pay more for a premium site.  Some of the most profitable parks are not "pretty parks" but have other features that make folks come and stay.  

    2Reply
  • Chris Szepessy
    Catskill, NY · Member since 2018 · 636 posts · 668 votes
    8y

    I had a similar idea, but I was looking more into an AirBnB type of RV rental instead of long term. Buying a piece of land and putting old, but restored (retro) travel trailers on it. The only issue I see is that RV's aren't exactly well built and we all know how hard a lot of tenants can be on a house, imagine what they can do to an RV. I'll be following this thread to see if others have some useful advice. 

    1Reply
  • David SMith
    OP
    Member since 2018 · 3 posts · 0 votes
    8y

    Thank you so much Belinda! I am still in the process of closing on the land. Since there are tenants on the land already, I am starting an LLC and using an accountant friend of the family to put it all under well I am still renting it out.
    I have been doing some more in-depth research on the RV park aspect. 

    Water: I have to draw up a plan of the maximum number of RVs on the land and submit to the water company (a SUD). $500 maximum fee. According to my calcs, current meter SHOULD be sufficient for number of RVs. If not, new meter is $7500 and I get a $2800 credit for old.

    Electric: Meeting with utility early next week. Currently 200AMP service at site. I have been scouting out a nearby park and it looks like they get 8 RVs on a 200AMP so we will see.

    Waste: I can get our trash service to set a covered dumpster with weekly pickup.

    Septic: Going to wait on this till I clos on land.

    Dirt work: Lots of 'free fill' it seems if I put up a sign. Will have to arrange with tenants. 

    Will keep posting! thanks

    0Reply
  • David SMith
    OP
    Member since 2018 · 3 posts · 0 votes
    8y

    Met with electic company. Looks like 600 AMP service required to be on safe side in Texas.

    0Reply
  • Thomas S.
    Member since 2016 · 13k+ posts · 12k+ votes
    8y

    You need to sit down and seriously crunch the numbers on the costs and time line to realise a positive return on your investment. Realistically you are going to spend far more money and time than you presently think before you see any positive cash flow, if any, and depending on your final numbers this business you are about to grow from nothing may only be of value to your children after you pass.

    Starting a business from nothing will take 5 years to determine if it is viable and may not show a return for another 5 or more after that.

    Be realistic...crunch ALL the real numbers. Get some professional assistance and draw up a proper business plan before spending any more money. You are presently lacking in research, knowledge and experience.

    0Reply
  • Patricia Mangham
    Investor · West Palm Beach, FL · Member since 2018 · 64 posts · 15 votes
    6y

    Just checking on this to see if any success from anyone on this because I”m planning on buying land for that purpose.

    1Reply
Join the conversationCreate a free account to reply, vote on answers and follow this thread.
Log InJoin for Free