RV Park ~ City Services, Permanent Guests = Cash Cow?

Question

Hi, I've never built/owned/operated an RV Park before, but I've done lots of research, have paid hundreds of dollars to the city for a 1 hour discussion on requirements, etc. Sounds very doable, city is on board. I would be buying a 4 acre commercial piece for ~$100 in the southwest part of Oregon, extending the city services a few hundred fee up the state hwy at a cost of about $70K  and starting with ~20 or so full hookup, gravel-finished pads with room for up to ~50 sites down the road. This is a depressed area but in a big way it has recently become a boomtown from the marijuana growing industry (kind of a perfect storm), and many folks are buying RVs and trying to find somewhere to park them permanently paying monthly rent. City says this is no problem to them. I figure I can buy the land and get 18-20 sites going for around $300K. This piece fully developed with 50 or so sites would have a $15K-$20K monthly gross potential. This revenue may seem small to some of you high rollers but this would be huge, life-changing in a good way, for me and my family.

I had previously been pursuing a 2 acre piece in the county where I  would have had to install my own septic and well. At some point I decided against that and that wherever I do a park I will make 100% sure to be on City water and sewer.

I have a friend in the same area who has a 40 space RV Park, nothing fancy, gravel pads, but he's FULL of permanent renters and turning people away! He says it's the best thing he's ever done and should have done it much sooner in his life. He travels the world now and  laughs all the way to the bank. While I've decided to go with city services, this guy refuses to touch the city due to their fees. I told him that to me having the city services is worth every penny of their fees so I never have to worry about a septic or well going bad.

Separate from the 4 acre project I describe above, I also have the opportunity to buy a 1 acre commercial piece in the city with city services already at the curb, asking price is $123K. I figure with city services this thing would just kind of run itself and be a cash cow. Am I delusional or can 1 acre, city lots with permanent renters really be cash cows? I figure if there are permanent renters, they're all on city services, there's not much to go wrong?? Correct? Or??

Thanks for any advice!

Aaron Mazzrillo · Answer

Sounds like you have a solid plan. I've heard the saying, "The person who makes money on a mobile home / RV park is the 2nd owner." LOL But, I think the main reason behind that is the cost to buy homes and put them in the park. I have a buddy here in the L.A. area who owns quite a few of these RV parks and all have permanent residents. He charges $500/space. Each have 20 spaces. When the average person drives by and sees all these dumpy travel trailers and 5th wheels, they probably never imagine the slab of asphalt is generating $10K/month gross. The only two laughing are him and his banker!

I agree with you on the city services. The upfront money and monthly fees are well worth never having a call from the water testing company that the well is no good or the sewer plant needs to be redone. I have different friends in the business who both have had those phone calls. The well owner is probably still in court because he was sued by all the tenants. They found arsenic in the water. The treatment plant owner wrote a $300K check to fix his problem.

I used to live outside of The Dalles. I heard many times that Bend is a nice place. An RV park in town sounds like a home run deal.

Matt Y. · Answer

Interesting thread...and I like your creativity!

Sounds like you are estimating $300-$400/mo in lot rent?  That seems high but maybe not in your area.  How far away are your closest competitors and what are they charging?

I would tend to think a 1 acre site is too small.  How many RV's can you park there?  And does the current zoning allow for it?

Lastly, I'm not sure what to say about the "there's not much to go wrong" comment.  There WILL be a thousand things that go wrong.  That's par for the course for any business owner.  Doesn't mean it won't be worth it, potentially.

Zach B. · Answer

@Jocelyn Hinz ... Thanks for asking. I just finally purchased a 3.82 acre property about 1 month ago. Getting ready to log it. Will develop gradually, in phases. Planning to license it with state as an RV Park but operate more like a tiny house community with permanent renters. Good luck with your project! Feel free to message me with further questions / updates. Would love to hear how your project progresses as well.

Jocelyn Hinz · Answer

Zach, how did this go for you? Were you able to build the RV Park? My husband and I are exploring almost an identical situation. Would love to chat!

Zach B. · Answer

Thanks, guys, for the input. Matt, Yes, I'm figuring I would charge $300/mo for a space and the guest pays their own water, sewer and electric on top of that. In addition to the 50 or so RV sites, I'd have room on the 4 acres for 10,000 sq ft or so of mini storage, hence the 15-20K /mo figure.

Aaron, Yes, sounds like my plan is very similar to your buddy in LA. An acre or so of asphalt in the right area, with city services and 20 or so permanent 'guests' is just simply a cash cow! This is the model I am going after.

Yes, we're just south of the Dalles here in Bend. And yes, Bend is on fire right now! Problem is, the dirt here is sooo expensive. Even just 1 commercial acre in town is upwards of $1Million. So, yes, I live in Bend, and if I could afford it I would love to develop something here, but due to the cost I'm looking to build RV Parks southwest of here in the Grants Pass / Cave Junction areas where the dirt is much, much cheaper but where there is at the same time a huge demand for low cost living spaces. Perfect storm!

RV Park ~ City Services, Permanent Guests = Cash Cow?

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