Of all the important formulas that revolve around RV Park investing, there is one simple fact that explains how the business functions and what makes RV Park investing successful. In this RV Park Mastery podcast we’re going to review what that fact is and the many ways it applies to the business.
Episode 90: A Simple Statistic That Explains It All Transcript
What if I told you that I know a statistic that explains the entire RV Park industry, would you be interested in that? This is Frank Rolfe with the RV Park Mastery podcast. So here's the statistic that to me influences everything from A to Z regarding the power, the business model of RV parks. Here it is. There's about 300 million Americans, and 240 million of those Americans live on only 3% of the land mass of our country, while 60 million live in the other 97%. So think of that on a map. A map of density, 97% of the map is one color, which means very low density, and then that little tiny 3% is a different color, and that's where you have extreme density of population. It's such an odd phenomenon that we all live crammed on top of each other, but what it also means is that inherent desire to get away from each other, to experience nature and experience lower density and privacy and solitude, that is the bedrock of what really created the RV Park industry. Because whether people want a vacation away from others or simply live away from others, RVs are the fuel that allow them to accomplish that. If you live in the city crammed upon everyone else, how in the world can you escape?
How can you get away? And the answer is by owning an RV. If you go stay in hotels, you don't escape, you're still back in the city again, back on top of each other, literally. So only in the RV are you able to truly get away from it all, from people, their appearance, their noise, their smells, everything. If you just wanna get away and experience the lower density part of America, an RV is a perfect way to do it. Now, if everyone lived throughout the land, if all 300 million people lived under the identical density throughout America, you might not need RV parks, because we'd all live in like an acre of land, and so we wouldn't have any neighbors knocking on the walls. Instead, we'd all have peace and serenity and green space and fresh air and all those great things. But it's not the way it worked out. It's kind of crazy though, because if you think about it, when America began, it started on the East Coast, and then people kept pressing to the West. Why? They wanted to get away from everyone else. They didn't wanna live in the middle of the city, they didn't wanna have people all jammed upon them, they wanted to keep going west.
That's where expressions like, "Go west, young man," which meant basically, if you wanna have a better life, if you wanna have more land, more opportunity, you need to go away from everybody, keep pressing. And the way the country developed geographically, the west was the area of low population density and the East was where you had all the population density. And it's very important that it worked out that way really, because what makes the RV industry work well is the fact it's the 240 million people who need to get away from it all, and not the 60 million. So if you really think about it, it's the fact that 80% of Americans need... Have this innate desire to find lower density, that's really what fuels RV sales, that's why they're so high year after year. If it was just the 60 million, that 20% of the population, then the sales would not be nearly as strong. Also, it's this innate desire to get away, to have more space, that makes the RV Park industry work generation after generation. It wasn't that long ago that some people said, "Well, the RV Park industry is doomed because only the baby boomers are really, really into it, and when they die off, that will be it." And then what happened? Millennials came on the scene and they liked the industry even more than the Boomers ever did. Now, why is that?
It's because it's not just a cultural thing, it's our innate desire to find lower density for those 240 million people crammed upon each other in the city, who all wanna get away, it doesn't matter what age group you're in, it doesn't matter whether you're a Boomer or a Millennial or Generation X or Generation Z or whatever they call the generations to come into the future, it's simply the fact that we all like to have some peace and serenity away from others, and that will never ever change. That force will continue on absolutely forever. Another fact is that the RV Park industry, because of this issue with population, it is not a fad, it's a permanent foundation of US society because that's never gonna change. You're never gonna have those 240 million people who live in the city leave the city. They wanna be near their jobs, they wanna be near healthcare and shopping. And even though they may say, "Well, gosh, darn it, I really would like to have a little more privacy."
They're not gonna do it. They simply are not gonna pick up and move. Our country's map will look the same 100 years from now. You'll have at that point probably 400 million people living in 3% of the land mass, and then the bulk of the tiny minority left over, they will live in that 97%. I don't see that ever really changing. Look how many centuries America's been and that's the way it ended up. I just don't see that number flip-flopping, so this force will always, always be there. Also, the fact that the industry is based in rural America, that's where you find most of the RV Park, sure, there are some that are in cities, but by far the bulk are in that 97% of the land mass, and because of that, you have attractive financing programs through groups like the US Department of Agriculture.
It always blows people's minds when I say, "Oh yeah, there's really good financing available from the USDA." People think, "How in the world would the USDA be involved in the RV Park industry?" But the simple fact is the USDA is devoted to try and enhance rural America, that's where all the agriculture is, in that 97% of land mass, and when you go to buy an RV Park, as far as the government is concerned, you're doing your part to foster the continuation of the strength of rural America. USDA loans often are 30 years in length at a fixed rate, phenomenally attractive to RV Park buyers, and the only reason you can get that stuff through the USDA is because it's part of 97% of rural land mass. And then finally, the very fact that we all live on top of each other in the cities, 80% of the population does, is what makes it so very attractive for people to buy RV Parks and self-manage them.
Because who wouldn't wanna get away from the urban blight? And all of that high level of densities and everything that goes with it. Many people find one of the big advantages to the quality of their life in buying the RV Park is when they self-manage and live in or near the RV park as part of the deal. Many RV Park owners have, with the deal, fairly nice homes, typically inside the RV Park or right next to it, and they do that because they love that quality of life. The largest RV park in the United States is down in Myrtle Beach, South Carolina. The owners of that RV park, which is vast, thousands of thousands of lots, they live inside the RV park. Why? Because they like it. They like living in a rural area of Myrtle Beach, South Carolina. So to them, that is part of the asset of the property, and it has been generationally since they first bought it. The bottom line is it's a very powerful fact that 240 million Americans, 80% of our total population live on 3% of the total land, while roughly 20% or 60 million live on the other 97%. That simple formula is what drives the RV park industry and will continue to drive it many, many decades and centuries into the future. This is Frank Rolfe, the RV Park Mastery Podcast. I hope you enjoyed this. Talk to you again soon.