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How Much Does It Typically Cost to Build an RV Park?

How Much Does It Typically Cost to Build an RV Park?

11/15/2023 6:14:13 AM   |   Comments: 0   |   Views: 37

How Much Does It Typically Cost to Build an RV Park?

Thinking about starting your own RV park? It’s a great way to make money, especially with so many people enjoying RV travel. But before you dive in, there’s a lot to think about.

Building an RV park isn’t just about buying some land and calling it a day. You’ve got to figure out costs – like buying the land, setting up things like water and electricity, and making the place nice for your guests. And don’t forget about picking the right location.

The price tag for starting an RV park can really vary. It all depends on how big you want your park to be, what kind of cool stuff you want to offer, and where it’s located. Plus, things like getting the right permits and setting up sewage systems can really change how much you need to spend.

In this article, we’re going to walk through all these things – the costs, the planning, and the little details that make a big difference. So if you’re ready to turn your dream of owning an RV park into reality, let’s get started…

Key Takeaways

        
  • Building an RV park requires careful planning and understanding of costs
  •     
  • Factors like land acquisition, amenities, and location impact overall cost
  •     
  • Success relies on proper budgeting, marketing, and customer satisfaction
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Understanding RV Parks

As you consider entering the RV park business, it’s important to understand what an RV park is and how it can differ from other recreational vehicle accommodations.

An RV park is a dedicated space for, you guessed it, recreational vehicles, including motorhomes and travel trailers, and is designed to provide travelers with a comfortable and convenient place to park and connect to necessary utilities.

RV Park Amenities

An RV park typically offers various amenities to its guests, such as electric, water, and sewer hook-ups, as well as other facilities like restrooms, laundry rooms, and sometimes Wi-Fi access.

The basic parks might only provide essential services, while more upscale options, known as RV resorts, can offer a broader range of amenities such as swimming pools, fitness centers, and even daily activities for guests. Some of these are over the top with lazy rivers, wave pools, and weekend concerts.

Here’s an RV park in my neck of the woods (Louisiana) that has its own private beach

Park Resources

As a potential RV park owner, you should know the many organizations and resources available to assist you in this venture.

One such organization is the National Association of RV Parks, which is dedicated to helping RV park owners establish, manage, and grow their businesses.

Why You Should Start an RV Park

If you have a passion for the great outdoors and want to help others experience the joys of nature, starting an RV park can be a great idea. A well-designed RV park can offer a comfortable and convenient way for people to rest, recharge, and explore the beautiful surroundings.

The good news is that the demand for RV parks has been steadily growing in recent years. As more people discover the freedom and flexibility of RV travel, they are searching for great places to stay and enjoy their adventures.

By running a successful RV park, you can provide a much-needed service to these travelers, and perhaps even become a member of the Good Sam network, which can enhance your park’s visibility and reputation.

RV Park Advantages

#1. Recurring Income

One of the biggest advantages of starting an RV park is the potential for steady income. Many RV owners prefer to stay in well-maintained parks, where they can enjoy amenities like electrical hookups, water, and sewer services, and laundry facilities.

By offering these conveniences, you can attract a loyal customer base that will return again and again, leading to continued revenue.

#2. Make the most of your location

Additionally, you have the opportunity to make the most of your unique location. Whether it’s nestled in the mountains, by a lake, or near popular tourist attractions, promoting the features of your region can increase your park’s appeal and attract even more visitors.

#3. Be your own boss

Last but not least, starting an RV park allows you to be your own boss and create a business that reflects your personal values, goals, and interests.

You can choose how you want to manage your park, from offering eco-friendly services to creating family-centered events and activities.


 

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Initial Considerations in Building an RV Park

Here are some important aspects to consider when getting into the RV park business.

                                                                                                                                                                                                                                                                                                                                                               
StepDetailsKey Considerations
Understand Local RegulationsResearch zoning laws and permits for construction.Ensure compliance to avoid legal issues. Consult local officials or experts.
Create a Business PlanOutline vision, objectives, target market, and financial projections.Provides a roadmap and assists in securing funding.
Choose the Right LocationSelect a site near attractions or scenic areas.Consider accessibility and availability of utilities.
Offer Attractive AmenitiesPlan amenities and services to attract RV enthusiasts.Differentiate from competitors and cater to target market needs.
Budget for Construction CostsPrepare a detailed budget for all expenses.Account for land acquisition, infrastructure, and maintenance costs.

Securing and Utilizing Land for an RV Park

When planning to build an RV park, securing the right land is critical to the success of your venture. Consider the location, size, and quality of the land when estimating costs and budgeting for your project.

Land Cost

Firstly, let’s talk about the cost of land. The price can range from $10,000 to $50,000 per acre, depending on factors such as location, accessibility, and amenities offered. Rural areas tend to have lower land costs, but you should weigh this against the potential demand and accessibility of your target market.

To calculate the approximate purchase of land cost, you can multiply the land price per acre by the total number of acres you plan to use for your RV park.

For example, if you want to build on a 10-acre plot and the land costs $20,000 per acre, you’ll need $200,000 to purchase the land.

Site Development

Cost To Build Rv Park

Once you have acquired the land, it’s time to consider the layout and site development.

In terms of dimensions, you should consider the:

        
  • size of the entire camping area
  •     
  • positioning and number of individual sites
  •     
  • overall landscape of the park

Remember to allocate space for recreational facilities, picnic areas, and other amenities to enhance the camping experience for your guests.

As a rule of thumb, allocate a significant portion for each site, with a parking pad and a camping pad that have enough room for a picnic table, a grill, and a fire ring or pit.

Keep in mind that parking spaces should be designed in a way that supports different types of vehicles, such as back-ins, pull-thrus, or pull-ins. Optimize traffic circulation and accessibility within your RV park to ensure ease of use for your guests.

RV Park Cost

It’s also important to consider the cost for developing the land for individual sites. This includes excavating, grading, installing utilities, and paving.

For example, a 16' x 40' x 6? concrete pad might cost around $6 per square foot, which amounts to $3,840 for one site.

Infrastructure and Amenities

When planning your RV park, you’ll need to consider the infrastructure and amenities that will make your site attractive to travelers. These features will directly affect construction costs but also play a crucial role in your park’s success.

Offer a mix of sites that include full hookups with water, electric, and sewer access to accommodate most RVs. 

                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                          
FeatureDescriptionImpact
RV SitesOffer full and partial hookups, including 30-amp and 50-amp electric connections.Caters to diverse needs of RVers, enhances accessibility.
Swimming Pool & Hot TubLuxury amenities for guest enjoyment.Increases construction costs but enhances guest experience.
Children’s Play AreaFamily-friendly environment for guests with kids.Attracts families, adds value to the park.
Laundry FacilitiesConvenient on-site laundry options for guests.Adds convenience, reduces need for off-site laundromats.
Waste ManagementSeptic tank and dump station for waste disposal.Essential for park cleanliness and health code compliance.
Storage SpaceSpace for extra gear and tow-behind vehicles.Enhances guest convenience, adds value.
Office SpaceArea for check-ins, information, and purchases.Creates a welcoming atmosphere, essential for management.
Cable TV & Wi-FiEntertainment and connectivity options for guests.Increases costs but can make the park more competitive.

By considering these infrastructure and amenities aspects, your RV park will be better positioned to attract guests and ensure a successful venture.

Choosing the Right Location

As with any type of real estate, selecting the right location is critial to its success.

As you consider various places, weigh the pros and cons of different states, the vicinity to state parks, and the popularity of tourist attractions in the area.

You should keep in mind the potential draw of natural attractions and the appeal of small towns versus more popular tourist destinations. Consider the benefits of choosing a location that offers unique experiences and an abundance of activities to attract visitors.

Selecting a remote location might bring tranquility and a unique charm, but it could also reduce your potential visitor count.

Ensure that your chosen location has adequate infrastructure and accessibility to accommodate all your park’s needs, including water, electricity, and waste disposal systems.

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Marketing and Promoting Your RV Park

In the competitive world of RV parks and campgrounds, the success of your business relies heavily on how well you promote it and connect with your target audience.

Online Marketing

Firstly, establish a strong online presence. This starts with building an attractive, user-friendly website that showcases your park’s unique features, amenities, and any nearby popular attractions.

Include high-quality photographs, facility maps, and booking information to make it easy for potential customers to find the necessary details.

Cost To Build Rv Park

Social media platforms like Facebook, Instagram (you are following me, right?), and Twitter can offer powerful ways to engage with your audience.

Share stunning images of your park, post about upcoming events, and interact with RV travelers to create a sense of community. Encourage customers to share their experiences through social media to tap into word-of-mouth marketing.

Offline Marketing

In addition to online promotion, consider offline marketing strategies. Create partnerships with local businesses, such as restaurants, shops, and attractions, to offer special deals and discounts to your park guests.

Sponsor local events or host on-site gatherings, like barbeques or game nights, to create memorable experiences for your guests.

Customer Service

Providing exceptional customer service should be at the forefront of your marketing efforts. Invest in well-trained staff who can assist guests with any concerns and ensure their stay is enjoyable.

Offer a warm and welcoming atmosphere and proactively address any issues. Happy guests are more likely to leave positive reviews online and recommend your RV park to friends and family.

Understanding the Cost of Running an RV Park

When you’re planning the development of an RV park, it’s crucial to understand the costs associated with running and maintaining the park.

Beyond the initial investment in land purchase and infrastructure development, several ongoing expenses will affect your overall budget.

                                                                                                                                                                                                                                                                                                                                                               
AspectDetailsImportance
Utility Bills, Taxes, InsuranceInclude expenses like electricity, water, property taxes, and insurance in financial planning.Crucial for accurate budgeting and profitability analysis.
Employee WagesFactor in the cost of hiring and paying staff for operations and maintenance.Essential for smooth park operations and customer service.
Maintenance CostsRegular upkeep of grounds, facilities, and amenities.Key to customer satisfaction and repeat business.
Internet ConnectivityPartner with ISPs to offer reliable Wi-Fi service.Increases appeal and competitiveness of the park.
Security MeasuresInstall security cameras and ensure compliance with privacy regulations.Enhances safety for guests, employees, and property.

Purchasing or Upgrading an Existing RV Park

When considering building an RV park, one option to explore is purchasing or upgrading an existing RV park.

This approach (the one we frequently do for our Passive Investors Circle Group) can offer certain advantages over starting from scratch, such as lower initial investments in infrastructure and a faster turnaround time to generate profits.

Buying Existing Parks

Purchasing an existing RV park may cost you between $100,000 to $2 million+, depending on the size, location, and condition of the park.

Keep in mind that investing in an already established campground might have higher upfront costs, but your potential revenue can be higher as well, as the park is already operational and may have a loyal customer base.

Additionally, buying and operating an existing park can have lower permitting requirements and less construction work compared to building a new RV park.

When upgrading an existing RV park, focus on the amenities and services that you can improve or expand. These can include:

        
  • Site improvements: Leveling or repaving sites, installing new electrical hookups or updating existing ones, and adding or upgrading on-site sewage systems.
  •     
  • Common area upgrades: Improving shower facilities, playgrounds, or outdoor gathering spaces, adding or repairing picnic tables and BBQ grills, and upgrading or expanding laundry facilities.
  •     
  • Recreational or entertainment features: Adding new amenities such as swimming pools, game rooms, Wi-Fi, or cable TV.

Operations

Remember to consider the operational side of running an RV park, including maintenance, marketing, and staffing. Upgrading the park’s management software, online presence, and marketing materials can help you attract new customers and maintain a good relationship with existing ones.

Also, investing in staff training and development will ensure that you provide excellent customer service, which can be crucial for retaining clientele and garnering positive reviews.

Due Diligence

Finally, before purchasing an existing RV park, be sure to conduct a thorough due diligence process. This should include reviewing the park’s financial records, occupancy rates, market trends, and potential liabilities. Understanding the park’s strengths and weaknesses will enable you to make an informed decision and ultimately maximize your profits.

Check out this video on the 3 reasons RV parks are outperforming the rest:


 
 

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Predicting Returns and Profitability

Your initial costs will significantly influence your overall return on investment, average price of your RV sites, and the cap rate you can achieve.

Cap Rate

A key metric to assess the profitability of your RV park is the cap rate, which is calculated by dividing the net income by the property value. A lower cap rate often indicates a higher property valuation.

For instance, if you buy an RV park at a 10% cap rate at a price of $500,000 and can lower the cap rate to 9% by improving the park’s appearance (without increasing the net income), your property’s valuation would be $56,000 higher.

Most cap rates are calculated by taking the net operating income and dividing it by the market value.

cap_rate_formula

Estimate Costs

To predict your potential returns, first estimate your total costs. This should include the average cost of land acquisition, permits, utility installations, and other necessary factors to build an RV park.

Remember that these expenses can vary depending on your location and the scope of your project.

Area Price Ranges

Next, research the price range of RV sites in the area to get an idea of what you can charge guests. Be sure to consider factors such as location, amenities, and demand in your region.

Once you determine a rough estimate for costs and potential revenue, you can establish a good price for your RV sites.

Keep in mind that long-term guests, special events, and additional amenities like laundry facilities can generate more income and increase your profitability.

Always strive to offer the best deal to your guests without sacrificing the quality and appeal of your RV park.

Legal and Compliance Aspects

When planning to build an RV park, you must consider the legal and compliance aspects related to the development and operation of the park.

This includes familiarizing yourself with local regulations, obtaining proper permits, and ensuring that your park meets all required safety and environmental standards.

Legal Requirements

First, research and become familiar with the legal requirements imposed by your local campground association. They might have specific rules and regulations about the development and maintenance of RV parks, such as minimum lot sizes, layout requirements, and permitted amenities.

Adhering to these guidelines will facilitate a smoother construction process and prevent any legal issues down the line.

Permits & Approvals

Next, you’ll need to obtain all necessary permits and approvals from local and state authorities.

This may include:

        
  • land-use permits
  •     
  • building permits
  •     
  • environmental permits
  •     
  • business licenses

It’s also important to stay updated with the latest zoning, health, safety, and fire regulations that govern the construction and operation of RV parks in the area.

This ensures the park will be built in compliance with local laws and regulations and helps to avoid potential fines or legal issues.

Liability Risks

You should also consult with legal experts and insurance providers to ensure that your RV park is adequately covered for liability and potential risks.

This includes obtaining the appropriate insurance coverage, setting up the proper legal business structure, and establishing clear policies for guest usage and safety. By taking these precautions, you can protect yourself, your investment, and your future guests.

Frequently Asked Questions

What is the typical expense for septic systems in an RV park?

Septic system costs in an RV park can vary greatly depending on factors such as size, local regulations, and soil conditions. However, it is important to consider that a complicated RV park septic system can increase overall construction costs dramatically. It is advisable to consult with a local septic system expert or engineer to get a reliable estimate specific to your location.

What are the general requirements for RV park zoning?

Zoning requirements for building an RV park vary widely depending on the jurisdiction you are working in. Some general zoning considerations might include setbacks, minimum lot sizes, height restrictions, building codes, and design standards. It’s crucial to research and understand local zoning laws and permits before beginning the construction process to ensure that your RV park is compliant.

How many campers can be accommodated on an acre of land?

The number of campers that can be accommodated on an acre of land depends on factors such as the desired layout, site size, and planned amenities. A general rule of thumb is that you can fit approximately 10-15 RV sites on one acre of land, although this number can vary. Careful planning and efficient use of space can help maximize the number of sites per acre.

What are the estimated construction costs for campground amenities, such as restrooms?

Construction costs for campground amenities can vary depending on factors like the quality of materials, local building costs, and labor availability. For example, constructing a restroom facility can range from $15,000 to $50,000 or more, depending on the size of the facility, building materials, and plumbing requirements. It is important to research local construction costs and obtain accurate estimates to establish a realistic budget for amenities.

How profitable can operating an RV park be?

The profitability of operating an RV park depends on various factors such as location, size, amenities, pricing strategy, and management efficiency. While returns on investment can be substantial, it is important to acknowledge that the initial investment in land, construction, and infrastructure can be significant. To maximize profitability, research the local market, set appropriate prices, and ensure excellent customer service.

What are the key steps in creating an RV park from scratch?

        
  1. Research zoning laws, permits, and local market demand.
  2.     
  3. Select a suitable location and secure necessary funding.
  4.     
  5. Develop a site plan, including the layout of RV sites, amenities, and access roads.
  6.     
  7. Set a budget for construction costs and additional expenses like marketing, insurance, and licenses.
  8.     
  9. Hire a contractor or oversee the construction process yourself.
  10.     
  11. Market your RV park online and through local channels.
  12.     
  13. Create a pricing strategy, establish rules and policies, and employ efficient management practices.
  14.     
  15. Open for business and continually strive for improvement and customer satisfaction.
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