RV Park Investing Newsletter

Valentine’s Day is a time of romance. So why not let that extend to your love of the great outdoors and being your own boss? Owning an RV park can be your chance to improve your quality of life while, at the same time, create financial independence for you and your family. So why not expand the magic of Valentine’s Day to a year round adventure and own and operate an RV park? In a world which becomes more unstable daily, wouldn’t it be fun to actually own your own business and control your own destiny? If you are a smart shopper, do great due diligence, and simply ride the U.S. megatrends of over 10,000 Baby Boomers retiring per day, you should be able to make a successful investment and start a new life that is rewarding every day of the year.

Colleges are supposed to prepare their graduates for the outside world. They are entrusted by parents to introduce the basic skills and knowledge to obtain and succeed in a number of careers, from education to engineering to journalism and to medicine. However, there is not a single college in the U.S. that has a course on buying and operating an RV park. And that’s a terrible disservice.

Colleges only point students toward traditional careers

American colleges and universities have a wide range of majors, but they have remained static for around half a century. If you want to be a P.E. teacher, then they have that covered. But what if you want to look into alternative investments and unique sectors of real estate? No offerings. This focus on the same routine careers has not kept in touch with the reality that the world is rapidly changing, and what used to work in the old days is no longer a path to prosperity.

Professors come from academia and not entrepreneurship

Of course, it’s hard to find new careers that meet the changing times in the U.S. when your leaders are products of academia and not real-world experience. The old expression “those who can, do, and those who can’t, teach” is not far off the mark in many cases. As a result, many of the best concepts for making money and having a high quality of life are lost on the next generation.

There are no guaranteed careers today

As we all know, the standard careers that have been promoted for decades are no longer working out. Too many jobs are easily moved to other countries – the internet makes even high level careers, such as accounting, subject to being bid against labor rates in such countries as India. Even what was considered the safest and most profitable career sector of all – medicine – is becoming highly undependable thanks to Obamacare and health care consolidation. The average doctor in the U.S. makes around $125,000, and struggles to make that in a billing nightmare with the U.S. government.

RV parks offer economic stability

Colleges fail to understand that only people who own their own business have a chance of long term success. Working for others is no longer a suitable plan if you wish to have peace of mind. You must be master of your own destiny. And an RV park offers this vital form of financial stability to its owner. Business is based on the relationship between cash in and cash out. RV parks offer strong, steady demand, coupled with low operating costs. And that’s the foundation for economic happiness.

RV park owners have high quality of life

Beyond the financial benefits, RV park owners are also blessed with an extremely high quality of life. Many RV park owner personally supervise their investment, and this gives them the opportunity to have a varied work day both indoors and out. It’s a combination of being Mayor, ambassador, business owner, operations manager and troubleshooter on a daily basis. Because they are totally in charge and set all the rules, RV park owners have little stress and a whole lot of happiness.

RV parks are on the correct side of all U.S. megatrends

Another reason that “RV park ownership” should be a college course is that it sits on the right side of all U.S. megatrends. While medicine has nowhere to go but down, RV parks have some of the best positioning in America today. One of the biggest trends in America is the retirement of the Baby Boomers, defined as those born between 1946 and 1964. This is the largest segment of the U.S. population and are retiring at the rate of around 10,000 per day. Many of these retirees are buying RVs and travelling America in them, which is why RV sales are soaring. Other megatrends that are positive for RV parks are low interest rates, and the desire by younger generations to vacation more economically and with more of a focus on family time.

Conclusion

RV parks are a terrific asset to own. It’s a shame that colleges and universities don’t have them inside their curriculum. But then again, the lack of attention has given you a much better position to find the RV park that fits your budget in the absence of much competition.

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MSN.com has proven to be a big fan of the RV industry – they have a positive article on the subject at least once a month. Recently they featured an article on “Glamping” in an all-Airstream camping resort that costs $222 per night. “Glamping” stands for “glamorous camping” and features Airstream models that cost an average of $135,000 and have every luxury that a 5-star hotel provides. The writer loved the articles are great for the RV park industry and offer priceless public relations opportunities.

An RV park can serve a pretty selective audience. Some RVs today can cost up to a million dollars and the customers are getting discriminating in what they expect from the RV park experience. So how can you give that “luxury feel” to your RV park?

Welcome Kits

Consider creating a free “welcome gift” for your RV park. High end hotels have been doing this for years. All you do is get a gift sack, some decorative tissue to put in the sack, coupled with a couple bottles of water, some candy or crackers, and some brochures on the great things to do nearby (which are free from the local tourism office). The total cost of the gift sack is maybe $3. The dividends are huge. Every person checking in will give you immediate brownie points if you give them a free gift.

VIP Treatment

Sometimes the most luxurious gift to your customers is to simply treat them like VIPs. People love it when you seem enthusiastic to give them a great stay. If you need lessons on this, go to a high-end retailer like Louis Vuitton and you’ll see the difference in atmosphere when you are actively treated like royalty. Of course, this perk is 100% free to the RV park owner, and actually enthusiasm can be contagious and make your own day brighter.

Superior property condition

One way to give the aura of true luxury is to maintain your property to the highest standard. You see this at 5-star hotels and has long been the hallmark of a well-managed property. Here’s the good news: it’s not any more expensive to keep your park immaculate than it is just average. The difference is really in attitude. You have to be a leader by example that you want the RV park to be the best it can be, and then set the tone by picking up every wrapper and pushing your staff to let nothing slide.

Concierge assistance

One big role at most luxury hotels is that of the concierge. A concierge is defined as “a hotel employee whose job is to assist guests by arranging tours, making theater and restaurant reservations, etc.” and that’s pretty much the case. To achieve this, you essentially help people plan out their day and make reservations for them. It’s not really a hard job, but it can take a little extra time. If you ever use a concierge, you will notice that they have a “cheat sheet” of every possible activity, hours of operation and food number in a three-ring binder. If you build that type of guide, you can accomplish this task quickly and efficiently.

Never letting a customer leave unhappy

The Ritz-Carlton has a policy that they will spend up to $2,000 per day to make sure that all customers are happy in the hotel. That means they will comp rooms, comp meals, whatever it takes. We’re not suggesting that you take things that far, but it’s important to embrace the concept that no customer should ever leave your RV park unhappy. When you feel there’s a problem, resolve it, even it means writing off some of their charges. Negative reviews on-line can be very detrimental, and so are bad word-of-mouth reviews.

Conclusion

Even if your RV park is not 5-star, that does not mean you can’t bring luxury to your customers. People always appreciate it when you make a big effort, and happy customers tell their friends. And the good news is that bringing your customers a luxury experience is very inexpensive on the RV park owner’s part.

Koi fish can live to be 200 years old. A couple centuries is a really long time. But since you have no chance of matching the koi’s life expectancy, it’s a good idea to think about the future of your RV park when you are no longer around to enjoy it. So that begs the question of if your RV park is really an appropriate multi-generational asset.

Superior location

The first item that makes an RV park capable of being successful for future generations is the location. The old saying that the key to real estate is “location, location, location” is no different for RV parks. So what makes for a great RV park location? Being a destination is far superior to an overnighter stop along the highway. And even then, not all destinations are created equal. Areas in the south have longer RV seasons due to weather, and you can judge the highway traffic near your property by consulting the local state highway department.

Solid cap rate with room for growth

Numbers are what often keeps the interest up on a property, and you must make sure that your RV park has a solid foothold as far as net income. Remember that future generations may not be as good an operator as you are, so you need the property to have rock solid financials that can tolerate a small reduction in revenue or increase in costs and still be fine. Often this means being selective in what you buy and holding out for the deals that offer exceptional numbers.

Sufficient size to provide for multi-generational management

At some point, if you are going to make sure that your kids can run the business effectively, you’re going to want them to work with you at the RV park. This will mean that the property has to be large enough to support more than just you. Small properties don’t always make ideal RV parks to pass on as there will need to be the ability to overlap the payroll and still stay in the black. Shoot for properties that can support extra payroll for an extended period, as well as a division of profits with all parties experiencing a win/win.

Easy to finance

Most commercial loans are rarely over ten year terms before there’s a balloon payment due. As a result, it’s important to own an RV park that is easy to finance. That means it has to have the basic material as far as roads, water, sewer, electric, solid amenities and great location that will be a turn-on for banks. You would not want to pass on a property that cannot get a new mortgage – if it was paid off, it means that your heirs could not sell it for cash.

A property to that you are proud to own

One big ingredient in a successful multi-generational property is simply being proud to own it. This “pride of ownership” is a key part of being a happy and satisfied owner. You will find that most people respond favorably to the goal of keeping something at the highest level. If you are losing interest in day to day operations, it may be time to transfer the property to the next generation now – or sell it and find another property that gives you more mental satisfaction.

Conclusion

There’s no greater feeling than building an asset that can provide financial security to future generations of your family. Select the correct one, and manage it effectively, and it can be a source of happiness for generations and one of the greatest inheritance assets you can leave your family.

Most people don’t realize that the Airstream and the Spirit of St. Louis share one common designer: Hawley Bowlus. Bowlus was the Superintendent of Construction on the Spirit of St. Louis, the plane that Charles Lindbergh flew from New York City to Paris in 1927. In fact, Bowlus was Lindbergh’s flight instructor on how to fly a glider, and a frequent flying partner. Later, Bowlus had an RV manufacturing company which was purchased by Wally Byam, who is considered the pioneer of the Airstream. However, the Airstream was really just based on the designs and handiwork of Bowlus, who had already developed the distinctive shape of rounded polished aluminum back in the 1930s. If you look at a photo of Lindbergh’s plane and a standard Airstream, you will see many similarities, from the color to the rounded features. Although Bowlus has long been forgotten in the RV industry, he was inducted into the Soaring Hall of Fame in the 1970s.