Earning Potential
RV parks are among the highest yielding of all real estate asset classes, with returns ranging from 10% to 20% over the course of a year. If your goal is to maximize the return on your money, RV parks are one of the best investments you can make.
Owners can potentially earn $50,000-$100,000 depending on the size and amenities of the campground. Diversifying revenue through stores and activities can also improve profits.
Costs and Investment
Starting a campground can vary widely in costs, ranging from $100,000 to $2 million depending on whether you’re buying an existing campground or building a new one. Initial investments may range from $26,750 to $4,462,925 for a Kampgrounds of America – KOA Franchise.
Typical Expenses
- New campground construction: $10,000-$30,000 per campsite.
- Insurance: $450-$1,500 per $1 million liability coverage.
- Initial KOA Franchise fee: $7,500-$30,000.
- Essential campground gear: $500-$1,000 per campsite.
- Additional investment for central building appliances and furniture: $50,000.
Financing Options
Many federal loan programs offer financing with down payment requirements that are half of traditional bank financing. State and local programs also offer low-interest loans to borrowers.
Popularity Factors
A good campground offers features such as easy-to-access and exit sites, shade trees, landscaping, and a pool, as well as resort-like amenities that combine modern perks with nature.
Planning and Guidance
Before starting a campground, proper planning is crucial. This includes:
- Understanding legal risks and creating emergency plans for safety.
- Researching permits, finances, and staffing needs.
- Hiring qualified staff to manage daily operations and maintenance.
The average campground business owner makes $75,000 annually, and profit can reach $30,000-$50,000 yearly, affected by factors such as location, size, amenities, and seasonality. Remember that navigating paperwork and permitting is often the hardest part of running a campsite.
Essential Steps for Success
- Ensure the campground has level pads with full hookups to accommodate RVs.
- Plan for around 75-100 sites with total build costs between $750,000-$1 million.
- Consider the number of acres needed based on local zoning laws, typically requiring ten acres or more.
Profit Factors
- Monthly overhead for 50 sites at 50% occupancy can yield over $273,000 annually, charging $30 a night before expenses.
- Climate and location can significantly influence occupancy and earnings.
With careful planning and consideration of the factors listed, owning a campground can provide substantial returns and the opportunity to work outdoors while being your own boss.