RV Park Investing Newsletter

June is the official start of the Summer season, and that’s the most important date of the year for many RV park owners. Just as the retail industry has its “Christmas season”, RV park owners have Summer and warmer temperatures coupled with school vacations and just the general happiness of sunshine. So how can you best prepare your RV park for a successful year? First, organize a Spring Clean Up event that will steer everyone’s attention (staff and full-time residents) to getting the property in peak condition. Secondly, aggressively market like never before – and that includes internet marketing if you’ve failed to get that up and going yet. Finally, make staff adjustments if you’re not convinced that you’re fielding the best team possible. Remember that many RV parks make the bulk of their revenue between now and Winter and you better bring you’re A-game if you want to move the dial and beat your budgets.

Most people think that the only way to make money with RV parks is to collect daily, weekly or monthly rent. But there’s another way: by selling each space off to the end user. This is often doing a “condo” conversion to the RV park, and it can be highly profitable in the right instances. For example, instead of renting a space for $30 per night, why not sell a customer a 99-year lease on that space for a one-time payment of $30,000? It’s a win/win as they save money over the long run, control their own destiny, and you get an immediate profit. So what are six important considerations to assess whether or not doing a “condo” conversion would work with your RV park?

It has to have the right raw material

To do a successful “condo” conversion you need the right material to work with: 1) a strong destination location 2) the ability to subdivide the park into lots or to receive the correct licenses and permits to sell perpetual rights to utilize the RV lots 3) the correct purchase price that allows you to profitably sell off the lots and 4) a huge amount of demand for the idea itself. Only a select number of RV parks meets these conditions.

You have to bring them in the door first

Before you can even sell someone on the idea of paying a one-time amount for a lifetime use of an RV lot, you first have to have an interested customer. And more importantly, a whole bunch of them. To get a “condo” operation off the ground, you have to have an extremely aggressive marketing program. You have to make the phone ring constantly. This will involve a concerted internet effort coupled with strong signage, direct mail and print advertisements.

Hitting that first 50% is essential

If you start the program and fail to get to 50% of lots sold fairly quickly you have a very low chance of being successful. It’s the same as the fabled “no man’s land” in World War I – once you start you can’t turn back and you must hit at least 50%. Once you hit that threshold, you have the momentum to typically finish the project successfully.

Fantastic salespeople need only apply

When you are selling something that is a big ticket item and that people are not familiar with, it requires an exceptional skill set. An average sales person can only sell average things at average prices. So there are only a couple options to make a go of a “condo” conversion: 1) you (since you have everything to lose or gain and know the importance of success) and 2) a person with great sales skills. Any other selection will result in failure.

Give residents incentives to push the occupancy

This an extremely important maneuver that many people don’t think of. The best way to get from the early phases to 100% sold out is to get all the existing buyers motivated to push occupancy by giving them a financial incentive to do so. Not a commission. But the addition of amenities based on hitting pre-established sales targets. For example, if you hit 70% you upgrade the pool with a slide and waterfall. At 80% you build a gated entry. This will get all your current customers pushing their friends and neighbors to buy a lot.

Offer bundling

This is another important sales tool. You offer the customer a volume discount. For example, if they buy one RV lot the cost is $30,000, but if they buy two it’s $50,000 – or a $5,000 reduction. This gets customers to push on their other RV owner friends to go in with them and lower their cost. Once again, the point is to get the customer to become your best salesperson and, in volume, that’s what really propels your sales to 100% sold out.

Conclusion

While doing a “condo” conversion is not the right step for every RV park owner, it can be a very profitable option for many owners. These six tips will give you an advantage, and help you in deciding if this is the correct path for your property.

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One of the great attributes of an RV park is that it is extremely adaptable. Whether it’s a tent or a $500,000 motorhome, they all stay at the RV park. And, as times change, this adaptability can be a very important trait.

The only place that non-traditional housing can go

The tiny home movement is extremely strong in the U.S. It features craftsmen building custom housing that is typically 400 square feet in size or smaller. And these housing units do not have HUD certification, so they cannot be placed in mobile home parks. Nor can they be placed on residential lots within a city limit. The only place they can legally go is in an RV park. In some markets, these housing units are already a growing source of RV park occupancy.

A history of everything from tents to $1 million motorhomes

RV park owners rent the right to utilize ground space. And, over the years, every site has been visited by everything from campers in tents to travel trailers, fifth-wheels, and motorhomes. It’s the ability to accommodate anything that can travel down the road that makes RV parks infinitely adaptable to consumer tastes and budgets. And this has been true since the 1930s.

A common interest in the outdoors

Regardless of the type of conveyance, one thing that all users of RV parks have in common is a love of nature and the outdoor experience. So what unites RV park customers is not what they arrive in, but what they do when they get there, which includes outdoor activities such as cooking on a fire. There’s really no barrier between participants based on what they own, but instead RV parks are a giant melting pot for those who share a common interest.

Conclusion

A great thing about RV park owners is that they are able to accommodate anything that can come down the road and that means infinite versatility. No matter what the future holds, it’s going to find a happy home at the RV park.

M.J. Vukovich is one of the top capital consultants in the industry. His specialty is to help you obtain bank or CMBS debt for your RV park. He charges roughly 1% of the loan for this service, and frequently pays for himself with lower interest rates and better deal terms than you can obtain. He’s paid only on successful completion of the loan.

For a free consultation, contact MJ at (612) 335-7740 and let him tell you what he can do for your property, or email him at [email protected].

There are two ways to approach things: 1) like everybody else or 2) over-the-top. And while your human nature may be to blend in, the best RV parks display true showmanship. So how can you “sell the sizzle” with your RV park?

Knock them dead with your entry

You only have one chance to make your first impression and yet many RV park owners fail in this regard. So how can you make your standard old entry remarkable? You’ve got to think big. A big sign, a big flag, a big special effect, a big landscaping feature. Think about the RV parks that you’ve been most impressed with – I’m betting they included something unique. The ones that come to mind include an airplane on a giant metal pole, a 20’ tall cartoon character made out of concrete and a 100’ tall U.S. flag.

Blow them away with your maintenance and attention to detail

Truly memorable RV parks are immaculate. On top of that, everything is in perfect order. To me, the first sign of a superior property is the signage. A great RV park has matching signs with the logo of the park on the top of them and the poles straight and with ornamental caps. Or immaculate paths that have not a single leaf on them or a single weed on the side. Or trash cans that are freshly painted and not overflowing. J.W. Marriott (the hotel founder) once said “it’s the little things that make the big things possible.” It’s as true in the RV park industry as it is in the lodging business.

Make them swoon with our enthusiasm to customer service

All great RV parks have a superior attitude. Have you ever been to Disney World in Florida? You will not find a single employee that is anything less than 100% enthusiastic and helpful. And few people know that all Ritz Carlton employees – even the maids – have the ability to make snap decisions that don’t exceed $1,000 to make any unhappy client a happy one. One big factor in creating this atmosphere is to hire people that really enjoy helping others, and then to make it known that happy customers are the #1 priority.

Conclusion

If you want to create a superior RV park, then put a little “Hollywood” in it. People enjoy things that are “over the top” and a memorable RV park is one that gets a huge word-of-mouth marketing boost.

One of the most interesting RVs of all time was the “Hunt Housecar”. Designed and built by Hollywood cinematographer Roy Hunt, these unique models were made between 1935 and 1945, and were the first RV ever to have a working shower. Beginning with a Ford truck chassis, Hunt used aircraft engineering to streamline the body, drawing the designs and having an auto body shop aid in the fabrication. There were approximately 50 Housecars built, making it an extremely rare item. Today most of the remaining units are found in museums.

While Hunt built his first Housecar for his own use while on location filming movies, the design was so popular that the other 49 were sold to mostly Hollywood celebrities and executives. Hunt was the cinematographer on such 1930’s classics as “Flying Down to Rio” and “Beau Gest” but he is best known today as one of the early pioneers of the RV industry. It’s hard to believe that Hunt’s education ended in third grade, and that he was self-taught as both a cameraman and an RV builder and designer.

Butterflies emerge from a decrepit cocoon and are much better than the caterpillar they started as. In this same way, many RV parks are brought back to life by new ownership that has the enthusiasm that the mom and pop owners lost. Of course, there’s huge profit in restoring these properties to their former glory. So how do you bring an old RV park back to life?

Make a list of everything to be improved regardless of price

The first step in bringing an old RV park back to life is to make an exhaustive list of everything that needs to be corrected. This is a wish list and nothing should be left off. It can be 200 items long if that’s what it takes. And don’t leave off items because “I can’t afford that” because that’s not the purpose of the first list. Put it all on there.

Prioritize this list based on your budget

Now take that list and highlight the ones that have to be completed to have the minimum required to properly run the business. For example, you have to have a professional looking sign out front, but you can probably wait a while on the new lake fishing pier. Once you’re highlighted the most important items, add up the total cost.

Come up with a capital budget that you can live with

How much can you comfortably spend on these capital improvements? That’s going to set your initial list of items to improve on. Your budget is set in stone, so you have to maneuver around it with your wish list prioritization. Write beside each item the rough estimate of what it will take to achieve. Then total it up.

Focus on the items with the most bang for the buck

If you can’t afford the total of these essential items, then put another mark by those that give you the most “bang for the buck”. For example, seasonal color in front of the sign is very inexpensive and creates a huge amount of positive vibes, while concrete repairs are not very sexy and customers will not even notice them.

Much of what you need to do to turn around an RV park is not monetary

Some RV park owners think that turning around an old property is all about the money. While it’s true that cash is king on making physical improvements, there is a whole additional list that you can’t buy – and that’s professional staff and caring about high levels of customer satisfaction. Most visitors would much rather have a friendly staff than a state-of-the art pool.

Make a commitment and don’t let anything or anyone deter you from completion

In every RV park turn-around there will be moments when you feel depressed and like you are failing. What’s important is to not let these moments change your destiny. Winston Churchill spoke about this during World War II when he said “when you’re going through hell, the important thing is to keep going”. Acknowledge that no great effort was ever achieved without the potential setback, but as long as you’re making progress, you will ultimately reach your goal.

Follow your gut feel

There is an art to turning around an RV park and some call this “gut feel”. It basically means trusting yourself and your ability to make good decisions. When you have to make tough decisions, always listen to yourself first. It’s your money and your destiny – don’t let others influence that.

Conclusion

There’s no greater feeling than bringing an old RV park back to life. You can feel the ghosts of those early owners and customer smiling down on you and your efforts, and the end result is highly profitable. These tips will get you started – now you just have to go jump in and do it.

We all have our own personal thoughts and beliefs, and that even extends to RV parks and how we advertise and operate them. While many RV parks follow the same traditional path and methods, others are truly original and stand out from the crowd. How does this work?

The lesson of the “Purple Cow”

“Purple Cow: Transform Your Business by Being Remarkable” was written in 2003 by Seth Godin. The book explains Godin's belief that creative advertising is less effective today because America is awash in advertising and no message really stands out. The book advocates that companies produce remarkable products and target people who are likely to spread word of mouth about the product. USA Today said of the book that it "reminds business people of the tried-and-true path to success: make a great product". Godin sums up his theory with the statement "today, the one sure way to fail is to be boring. Your one chance for success is to be remarkable."

You are at your best when you are 100% you and not that great when you fake it

To be original you can’t copy others. Just as many career books tell you to choose what you really enjoy and push that, the same is true with harnessing your original thoughts. Don’t be embarrassed to be different. The business examples are all around you. Apple computer sprang from a desire to be 100% original, as did Ben & Jerry’s Ice Cream.

How can you be different with your RV park?

So how can you be an original with an RV park? By putting your own stamp on the business. The selection of the name of the property. Creating a unique theme. Unusual colors that you prefer over the standard ones (a purple basketball goal – why not?). A desire to let the world know that you have the guts to brand the RV park as your personal creation whether people like it or not (but they will, of course).

Conclusion

Don’t just pull in a KOA Campground and think “OK, this is exactly what I’m going to copy with my RV park”. Instead, you’re far better off daring to be different. It’s the “Purple Cow” that creates the breakout word of mouth in today’s world.

This is an advertisement for RV rental in a British magazine. We all know that the American RV industry is booming, but is there a similar industry overseas? It turns out that there is a long association with European nations and recreational vehicles.

Europe

European RV parks are called “caravan sites”. The first RVs were wagons dating from about 1820. Today the Caravan Club has 1 million members in Europe with roughly 200 self-owned campsites and over 2,500 certified locations (CL sites). The Camping and Caravanning Club is a non-profit with around 100 camp sites and over 400,000 members. In Germany, RV parks are called “Reisemobil-Stellplatz” and in France they are called “Aire de Camping-car”.

Canada

The Canadian RV park industry began in about 1910, with the first units built on truck frames. Canadian RV parks are much more rustic than their American counterpart, and there are roughly only 10% as many in quantity than those in the U.S. That being said, there are still many membership clubs and there is significant attempts at applying modern methods of conservation to protect the natural resources.

Australia

Australia has a strong RV industry, under the name “caravan park”. Recently, there has been a growing trend towards a business model known as “holiday park” which features an abundance of on-site cabins (park models in the U.S.) and with much nicer amenities and clubhouses than a standard property.

Conclusion

While there is no country with as large or vibrant an RV industry as the United States, you can still find recreational vehicles and places to park them in many foreign countries.