Hello BPers! Crazy question for anyone who cares to chime in. Has anyone had experience developing land for rv / trailer pads for short term vacation rentals?
If you've seen my earlier posts, we have a large property on the outskirts of Eugene, OR that I believe could be used as a short term vacation rental strategy. Large lake, fishing, canoeing etc. adjacent to blm land, hunting, hiking, shooting, outdoor types of recreation opportunities, as well as being situated in the heart of one of Oregon's wine countries, with 3 wineries within 15 minutes of the property.
We were toying around with the idea of developing a few pads with RV hookups for short term rental. I feel like it is low startup cost, low maintenance, and a way to bring in some high roi cash flow. Has anyone here had any experience with this, or willing to share your thoughts?
Thanks in advanced!
Hi @Patrick R Morrison ! That sounds like a fun project! I would take a look at the zoning for the area along with septic or sewer capacity or availability.
If all that is doable, it would be cool to do park models. There are a bunch of builders here in our general area and you can get them here and there, different styles etc. Create a resort type thing.
There will be some hurdles I am sure, but it sounds exciting!
Almost all RV parks are short term rentals
We’ve financed a couple of them. One was in the rural Indiana area, and got most of its RVers from Chicago. It offered numerous amenities, like swimming pool, tennis courts, clubhouse, retail store, fishing lake, etc. management was a full time job for owner, even with onsite manager. This is more of a business that has a real estate component rather than a real estate investment.
The other RV Park was near Lake Conroe in Texas. The composition of RV space renters were a combination of people coming to enjoy the lake and all its related activities and temporary construction workers (nomads) who travel from job to job and stay in their own RV. Other then the usual utilities provided with each pad site, and some sidewalks, the park offered no other amenities. The on-site manager was part time, and the owners had full time jobs outside of the park management. This one was more of a real estate investment than a business.
Interested, both operations were successful financially, though with highly leveraged financing they struggled to meet note payments during “off” years.
@Don Konipol i’m curious to know which RV park you’re talking about near lake conroe?
My parents have been thinking about building one in Willis ?
Build vs. is a common question. just b/c you own the land doesn't you'll be allowed to develop it into a park either. Lots of potential hurdles but it can be a great investment AND fun! I'll send you my ebook on Building an RV Park so you can get an idea of the pros and cons.
I personally love the RV Park business model. I put parks into two categories; resort or residential. Resort are the destination type parks while residential are just Mobile Home Parks full of RVs. Resorts can be seasonal so you need to plan your cashflow accordingly. Residential can be cash cows if managed correctly. They don't need any amenities other than being clean, safe and near an area with either large construction or in need of affordable housing (which is almost everywhere.
As Don mentioned being overleveraged is a problem if the owners don't understand how to manage the park and have true financials instead of trying to base off of pro formas. New Park owners often underestimate how long it can take to build and then fill a park. Existing parks, even with bad reputations, can quickly be turned around with the right management and ownership.
Remember, "The Park takes on the personality of the owners" so if you treat it like your personal ATM and let maintenance go,it will show. If you run it like the business it is and realize you are in the Hospitality and/or Housing industry then you can realize double-digit returns easily -well, if you buy it right.
It sounds like you got a great location for a seasonal park. Check out nearby park rates and occupancy to start your due diligence and also become extremely friendly with local permitting authorities. Meet with any pre-development team you can to get a feel for what they would require from you.
There is a site called "hipcamp.com" that lets folks rent or stay on private land. Some are just primitive camping, others have RVs or cabins. It's kind of like airbnb but for camp sites. Lots of considerations but don't let anything hold you back if that's what you want to do.
My wife is obsessed about that property, currently running a feasibility analysis.
Thanks for the insight everyone! And Thanks Belinda for the Hipcamp link. I was wondering how we could market this. Sounds like something we will try, as we already have a rental unit on the property, and making a space for someone to park an rv on a temporary basis should be fairly straightforward. As far as permitting is concerned where would be a good place to start to ask the important questions? The county? Thanks everyone!