The Presidential election is over and it’s time for RV park owners to harness the power of Biden’s initiatives to make money. And, from all appearances, there a number of potential pushes by the new administration that can be a profitability driver for RV park investors. So what are the opportunities coming with the new administration?
Capital gains tax repeal and a big buying opportunity
Biden has said during the election that he wants to repeal capital gains tax and this will potentially double the tax paid on profits by sellers. This has not been on the table for decades, and the impact will be many mom and pop RV park owners wanting to sell fast and avoid the extra tax. This should make the next year or two a great time to find good RV parks to buy. But what about later, when YOU ant to sell? History has shown that capital gains tax comes and goes like a boomerang, and predictably will return with a future administration. Here’s a chart of how that works.
Forgiveness of student debt and higher RV sales
Biden has suggested he’ll be seeking a $10,000 forgiveness of student debt, while others in the Democratic party are pushing for $50,000. Any way you cut it, this will definitely give many potential RV park buyers better income-to-debt ratios and that will spur sales even higher. While many Americans think that student debt is a “young person” issue, it’s 35 year-olds that have the largest student debt in the U.S. with an average over $40,000. Since Millennials are the largest population segment of RV ownership, this will be a windfall for many RV buyers. And the more RVs on the road, the more nights of occupancy in RV parks.
Continued Covid “focus” as a positive force on RV park occupancy
Covid is all about “social distancing” and being ‘outdoors” and RV parks are the perfect fit for this mantra. Biden has been a devoted disciple to self-quarantine – including wanting a nationwide masking order – and this will only put positive force on RV occupancy in 2021 (and potentially beyond). Remember that many Americans poured into RV parks at the start of the Covid pandemic and it’s been a very powerful force for nationwide RV park occupancy ever since. Who would have ever thought the nation would be so focused on outdoor activities? Certainly nobody before March of 2020.
Conclusion
Every new administration brings winners and losers. Oil and gas appears to be the biggest loser of the Biden era and RV parks appear to be net-gainers from the change in leadership. Part of it is luck and part of it is just being a smart investor.