Investor · MI · Member since 2019 · 112 posts · 221 votes
Hi! Does anyone have experience with a seasonal park where the tenants are (mostly) long term (like 10+ years) and they pay annually? This particular park is on a lake. The homes are mostly RV’s, but they hook up to the well and septic and the place really runs like a MH park—aside from the fact that the tenants pay annually and the park is shut down for half of the year.
Just looking for any sort of pros and cons any of you have experienced?
@Nikki Closser I have several parks and one that runs very similar to what you have described. As long as the location is good and the demand is strong, parks like this are great. I will list some of the pros and cons here:
Pros:
Residents pay once a year for the entire year. This creates a high degree of simplicity from a bookkeeping perspective. It also removes any concerns related to slow-pays or no-pays.
The off season allows the freedom to do capital improvements while the residents are gone. This allows you to spend the time necessary to do major projects that will be noticeable when residents return for the season.
Managers can take a vacation. This is an often overlooked bonus to a seasonal park. Good managers deserve to take a break from the park and recharge their batteries.
Cons:
Residents pay once a year for the entire year. This will require you to budget for the entire year with no additional income coming in. If you are not detailed with your budgeting, you could be short at the end of the year. If you syndicate and are making distributions to investors, budgeting will be critical, as your distributions will need to be accounted for up front.
We love our park that runs like this and would invite another one like it! Again, as long as the location is good and the demand is strong, parks like this are great. If you can be diligent about spreading the income over the year to properly allocate for expenses for the year, you should enjoy your experience owning a park like this.