RV Park Expenses - How Much is it?

6 Replies

Hi everybody.

My family owns a 60 acre lot outside of the under-served market of Midland Texas.  I'm think about putting an RV park on it.  What I'm trying to find out is this: How much does one RV space cost per month with on site water, septic, and satellite TV.?

Thanks for any information !  

@Jonathan Johnson Check with zoning first to see if you can do that on the land you own. If you can, then you'll have to start getting figures together. You may want to visit a few other RV parks in the area. Talk to the owners and/or park managers. Many times I find them great sources of information when doing market research. If you can establish a good relationship, they may even send referrals your way when you're ready to develop the park. Best of luck! 

@Rachel H. , thank you for the information.  I have checked the zoning and it is no problem building an RV park on my place.

@Clint Shelley , I'm building an RV park and am trying to build an operation expense model.  I've been searching around trying to figure out how much electricity on RV consumes.

@Jonathan Johnson there are more variables than the basic expenses, so it is difficult to pin an exact percentage.  I have owned and operated MH and RV parks and find the expenses tend to land in the range of 40-60% of gross revenue. 

The lower end of that range would be appropriate for an RV park where the residents are full time, with little to no amenities, and no regular high cost items like landscaping.  (If you have to mow 40 acres of grass every week to keep the park looking nice, that would be a high cost item)  A park like this will require less staff to run it and there are less variables. 

The higher end of that range would be appropriate for an RV park with daily traffic and a full package of amenities (pool, clubhouse, sport courts, premium landscaping, etc). A park like this will require a lot more staff to attract and service the daily traffic and keep the amenities looking good.  

It might make sense to use 50% in your underwriting just to be safe and if you end up beating that, your return will be better. 

I have an eBook on building an RV Park you might want to check out. Is the Park going to be a "Man Camp" type park going after the Oil worker boom?  or are you looking for a longer term, prettier Park?

Lots of variables around this since Midland can get very hot and very cold thus driving up electric rates in those extreme months.  If you're going after workers, they sometimes clear out in December and January so be aware of the possible lapse in cashflow.

Building can be anywhere from$12k to $25k more per space from permitting to being rent ready.  Utilities are the long pole in the mix as getting water and then getting rid of it is the issue.  We've run into many cases where the local Water provider could not service a new Park and a new Well could take 8 or more months to get through the permitting process - IF they approve it.  If you need to do septic for every acre of park you'll be setting aside an almost equal amount for the septic.  i.e.  a 14 acre park with 7 acre of RV lots would need from 5-7 acres for your septic field.  That's not taking into account roads, drainage, overhead or underground power lines, etc.  Check municode.com to see what the ordinances are for your area.

Sounds like an an interesting project!  Keep us updated.  Contact me if you want to talk more .