Starting an RV Park: How much is an on site sewage treatment plant?

[Mike Gennaro]

Hey there BP community,

I'm obtaining quotes to develop an RV park, and I want to know how much should we expect to pay for an on site sewage treatment plant.

Has anyone gone through this before with mobile home or rv parks in rural areas?

We have industrial plant workers that need seasonal housing in our area. Any and all advice would be much appreciated from those that have succeeded in this niche.

Best,

Mike Gennaro

[Matthew Paul]

That all depends on the size of the park , and the type of park , a rv park requirements are different than a mobile home park . Rv parks can have sites without sewage , but must have a dump station ,  the parks will have the honey wagon come by and pump the campers holding tank.  You may be able to have a very large septic tank with large drain fields .  You realy should consult with a civil engineer and your local officials to see what is allowed and required .  My neighbor looked into opening an rv park near annapolis md and with all the rules and regulations it was going to run $ 40,000 per site for roads , utilities and site work , excluding land costs .

[Walter Pape]

@Mike Gennaro  welcome to BP!! 

I believe @Jim Johnson would the person who would be able to answer your question about MH Parks. Keep posting on BP to share how starting a MH park goes. I would be interested to see how it goes. Best of luck!! 

Walter 

[Jim Johnson]

Hi Mike,

Walter- thanks for the inclusion. 

So sewer treatment plants. Tricky subject. There are 4 aspects to water / sewer. Where does the water come from? City, well, stream, spring, truck etc... Who makes it clean- so do you need a water treatment plant, and if you do, what are you adding or removing. You should pre test the water, and then engage the state to see what they require. This can be very expensive depending on the state, and (I am not making any political statement or judgments here)- and the president is changing some of the epa regulations through executive order that mandate some changes on ALL public water supply and treatment systems regardless of the size of the community they service. These same regulations do not apply to businesses. So while I might serve a few hundred people with water daily, and the strip mall / gas station etc up the road might serve water to the general public, our water is not treated the same- so be careful when you read the regs your reading the right ones. We have 10s of thousands of dollars of treatment equipment, while the place across the street that pumps 5 times the water, has zero. The regulations are not evenly placed. Now the water runs through your system and you need to treat it, and then- dispose of the treated water and dispose of the heavy solid waste that is left. So I use a 'packing plant'. Sewage enters a tank, it is run through a pump and grind system and moved to an aeration tank. This is a huge tank- 15' wide x 50' long by 12' deep that has lots of air bubbles in it. It looks like a roaring, bubbling hot tub. This tank had chambers that separate the water that no longer has solids in it, from the water that still is holding solids. This tank is loaded with 'bugs'. Little microscopic bugs that eat / treat the raw sewage. Well- this tank has 4 total chambers- the last is a narrow well that takes the 'clean' water through a pipe where chlorine is added. Later in the pipe the chlorine is removed and then the water goes to a finishing pond. The pond, about 50' round and 10' deep allows any solids left over to settle, and lets the sun treat the water prior to the water being pumped about a mile to a stream. There is one more tank set off to the side, where 'heavy' solids are skimmed from the aeration tank and allowed to settle. We pump air into this tank, then stop, allowing the water to rise and separate. The water is pumped back into the aeration tank, while the solids- well they are really solid. Like very, very heavy mud. These solids must be pumped out of the tank and disposed of. 

So- a few costs involved. Engineering and environmental impact study's and reports. Then the hard costs of the equipment. We service 76 home sites- and if I needed to just replace my system today, without the cost of the initial permits, engineering and impact study's, it would set me back $300,000. Maybe up too $400,000 if I had to increase sizes due to new regs. From scratch- my system would cost 450,000 to $550,000. 

This is just the sewer plant- not my water treatment system. If the stream was closer- that could knock off 50 - 75K. 

Every state is different in what they allow, but what is tricky is the EPA. You do NOT want to make mistakes. My plant has a certified operator- required by law. So does the water treatment system. I spend- $40,000 yearly on just salaries to have these guys show up and watch over the systems. The state requires our water operator be onsite like 2 hours daily, while his duties only take him about 15 minutes. The sewer plant needs to be checked daily- though we check it a few times a day. 

Lastly... there are large self contained systems that can be bought to do the treatment. They might be military surplus, or some other use like man camps. I have looked at them as backups in case something went very wrong and I needed a quick fix. Ebay sometimes has some listed. They run between 50,000 and 500,000 depending on what they really do, and how much water they treat. Remember when dealing with the EPA you will be sizing for the heaviest use. So if you service 76 sites like I do- they size me for the 4th of july, when they figure EVERY home has EVERY relative and the community looks like a grateful dead outdoor free concert venue. So the system is oversize and underused- which creates other issues but this is now a runaway post and I best stop... 

That is probably more than you wanted to know about packing plants... but look at all 4 aspects- where water comes from, what needs to be done prior to drinking it, how to treat it, there where does the finished product go. 

one more thing- what do the water rights cost- and can you even purchase them. If your park was in Colorado- the water rights would probably cost more than the system. 

[Leslie A.]

Hi Mike,

We've been trying to develop a small park on our land.   For a 20 site park our septic system was going to run about $17,000.  You can go to the county office that permits septic systems and they can tell you what kind of system you will need.  Then you find a certified installer to make the plan and get the permit for you.

We've pretty much decided to not go through with our plans, since the nearby city says we have to comply with their RV park ordinance (even though we're not in the city!), which will add tons of costs.

[Joel Owens]

So it sounds like this RV sound good until you really get into analyzing it. Then it sounds like a regulatory nightmare and constant money pit.

The money would have to be really high on these things versus alternative asset investments to place your capital unless it was just a labor of love.

[Jay Hinrichs]

I made a loan on a RV park and ended up owing it .... 40 pads  on site septic system was degraded and basically useless.. redesign and to build a new one was about 250k all in.

Water was private well water so we got that up and running fairly easy.  When I sold my Mobile home park in Vancouver WA  the new buyer hooked it up to city sewer and will only buy parks that have city sewer... maintaining private systems is a real pain.. unless they are old and grandfathered in. But that's not the case when your building one in todays environment as has been stated above in great detail and is spot on based on my personal experience.

[Leslie A.]

@Jim Johnson   Is the info you're talking about for Mobile Homes rather than RVs?  From what I understood from my county a MH required about 10 times more septic capacity than an RV, making an RV system much cheaper.

@Jay Hinrichs That seems really high for RVs.  I'm sure you know what you're talking about, though.  Do you know why it was so expensive?

[Jay Hinrichs]

@Leslie A. 

actually in my experience in the state of Oregon it was the opposite.. Because RV's generally dump very toxic stuff into the system from their self contained systems. As opposed to residences who just have the normal grey water... When your doing your own on site system you also need to have room for and build an over flow or replacement drain field as well... Now our system was light a giant septic system.. NOt a self contained seweage system ( package plant) like you see in other areas especially in Hawaii

[Jim Johnson]

My info concerns mobile home parks. I am not in the RV business- as that is a very different type of business to own. 

[Mike Gennaro]

Thank you all for the overwhelming response in valuable information. To answer the most basic question, I obtaining quotes on 30 pads/sites and one sewage treatment plant. The location will be just outside of city limits. I'll let you know more about the process as we move forward.

Best and many thanks,

Mike

[Mike Gennaro]

@Jay Hinrichs

Your tip about only your friend only buying within city limits to save on treatment costs is much appreciated.

In our area, we are trying to service oil and gas workers and plant personnel. I've noted a few "pop-up" RV parks that are possibly operating under the regulatory radar. A bar-b-q restaurant rents out it's parking lot, for instance. And an empty plot of cleared land has about 20 RV's parked on a daily basis. A gravel dealer has a hand scribbled sign allowing RV parking as well.

In that light, the goal is to affordably develop a 30 pad RV park within city limits while still best serving clients and meeting regulatory requirements.

Are there any more do's and don't from those that have failed at this and eventually succeeded?

[Jay Hinrichs]

@Mike Gennaro 

  Sounds like these other RV parks are only allowing self contained units.. with no dump facility.. you would need to check with your city to see if that is allowed... Its common in the RV business to have one central dump. and no hook ups at the pads.

Also common for all RV's to be self contained and they need to drive to a dump station.

[Harold Anderson]

@Mike Gennaro ,  

We haven't owned RV or MH parks but have owned a water utility for a community of 550 homes in northern Arizona.  While we don't have much experience with sewage other than residents whose septic systems were bad and threatening the water system, you do need to be concerned about water as well.  The simplest thing would be to tie into your city system if you can.

I don't know if this is applicable but just to get a rate increase required $15-20K to hire a negotiator to negotiate with the state.  We had private wells and storage tanks but had to do daily tests and submit monthly reports.  Like others have said, we had to have a water operator on staff.  And a water system requires constant attention.  They tend to leak;-)

As a city planning commissioner, I would add that you should have open communication with any planning dept and, if you go before a planning commission, go with an open mind.  If a park is in need as you suggest, the planning department and commissioners will do what they can to help you.  We've helped new business owners to get around roadblocks in ways that benefit both the city and the business.

Harold

[Mike Gennaro]

Thank you @Harold Anderson

Water is definitely an issue as well (no pun intended). It would be ideal to find a piece of land within city limits. You are saying that even if we find a rural tract that has well water, it will need to be tested regularly at great expense?

Yikes, I'm beginning to feel more and more naive. Nevertheless, I don't wan't to give up on my idea of providing oil field housing in some form or another.

Please help if you have any better ideas BP community...

[Jay Hinrichs]

Reality is much like a gold minning town back in the gold rush days. . I think much of what goes on in these temporary housing situations is just do what you can get away with.

I see all sorts of Australian and British marketing companies hawking what amounts to hotel rooms in North Dakota to unsuspecting investors and telling them they are buying a room , Like it was a condo or something.. totally out there and who knows were it will end.

End of the day its temp housing unless you plan on keeping these long term

[Harold Anderson]

@Mike Gennaro 

We were regulated by the Arizona Corporation Commission.  I suspect that your state has similar regulation.  I would start with them to find out what your state requires.  

Obviously, the state has an interest in protecting it's citizens from water born illness.  I suspect that the same regulator handles sewage as well.  

As to finding a rural tract with a well.  I can't say for your state or number of sites what's required.  I can only speak to Arizona and the 550 homes we serviced.  We had to have wells that met the state (and industry) standards as to size and configuration.  They are much more involved than residential wells.  I've no idea what they would cost to do from scratch as they were on the land we invested in.  I suspect other investors/developers here have better information on that.

The regular testing isn't real expensive nor is the simplest water treatment.  However, if you have a problem with your water, treatment costs could skyrocket.  In AZ, arsenic can be a problem and maximum ppms were recently dropped causing private water companies a lot of pain.

[Mike Gennaro]

@Jay Hinrichs

Do you know the average life of an oil rig or further, an oil town? I have been trying to find that missing piece of the puzzle. North Dakota's Bakken is a relatively new play, right? Are you noticing trends of the workers leaving the town high and dry with no long term economic growth? My exit strategy was to "mobile out" my RV park as the workers begin to thin in 10 years or so or sell the land when it may or may not appreciate, as a town grows around it.

Closer to home, we have the Eagleford Shale Play in Texas. I called around various RV parks in that area to find out what happens at the end of the oil activity, and no one knows yet.

I always remember the ironic antidote of those who got rich in the gold rush, those who sold the shovels. I'm not a get rich quick type, preferring to buy and hold. But even shovels become unnecessary at some point.

I was born in 1982 and don't know much about the history of oil trends and their effects on economies. Can anyone fill me in?

[Jay Hinrichs]

Nope have no clue..

agree with the gold rush mentality though

[Leslie A.]

@Mike Gennaro 

  I know this is an old thread, but wanted to add one thought.

If you develop your park with cash or pay it off quickly with profits, I think it's worth the risk.  If you're going heavily into long term debt, that may not be wise.

[Lynn Currie]

@Mike Gennaro 

Did you ever make any progress on this?

[David Krulac]

The newer RV parks have individual hookups for water and sewer and electric at each site.  An RV park with only a dumping station would typically be either older or smaller.

State rules and regs apply and with hookups a MH park looks much like an RV park.  In some parks there is a mix of MH and RV.  And some RVs are full time occupants, or seasonal like snow birds in FL TX & AZ.   

[Tiffany H.]

Can anybody shed light on the topic of "sewer lagoons"? I learned this term recently when looking at a park and I have no idea what the concerns or costs might be to maintain. The agent said it's on city water so it could probably be hooked up to city sewer pretty easily. I think that was probably an ignorant remark (but I'm a bit ignorant so I don't actually know.@Jim Johnson do you have any insight here?  I know the best plan is to stick with city sewer and water, but if a good deal came across that wasn't, what would I need to look out for?

Thanks!

[Jim Johnson]

A  lagoon is a big evaporation pond. Sometimes they have sprinkler system that spray the water into the air or on plastic lining the banks of the pond. They also use fountains to increase the evaporation rate and aerate the water. So really what happens here is everything flows into the pond after going through a 'pump and grind' system. Sort of like a garbage disposal. The heavy solids settle to the bottom of the pond and everything else evaporates. At some point they fill and the bottoms need to be reclaimed or a new lagoon needs to be dug. The problem is- what do you do with the sewage while your reclaiming the bottom of the pond? You can use a tanker and haul everything to a treatment plant... you get the idea. Sometimes they fail. I looked at a park for someone a few years back in Nebraska and the pond was ejecting directly into a stream. Can you as- Hello EPA. 

So maybe the park can be linked to a sewer system, you would need to do some research to figure that out. 

I would also check with the state agency that regulates the pond and see how much longer before the permit needs to be renewed. I would also want to know, if the pond needed to be replaced what the state says your options are. Some states are not allowing them to be put back in. Then your looking at connecting to a public system, a large sand filtration system, or a packing plant. All of those options are probably '6 figure' issues... 100,000 - ? 

[Tiffany H.]

Thanks @Jim Johnson !  Helpful info!!!

[Belinda Lopez]

Just wondering if the original poster ever went forward with his plans?  Were you planning on living on-site and managing yourself?

For MHP, they say it's the 2nd owner who makes the most money but I'm not sure on RV Parks.  It's certainly a different prospect if you borrow a great deal of money to start the business.  It's certainly easier to buy an existing Park and then add-on b/c the property is already cash flowing - or it should be. 

Be aware that all the "Mom & Pop" Parks were built incrementally and management costs were low b/c the owners lived on-site.  Those owners are now cashing out by owner financing the Parks to new owners.  Works well b/c the owners still get a nice income and the new owner gets a cash flow property on whatever terms they can negotiate.  Much easier than building from scratch but these deals are rare and getting harder to find.