One of the attractions to buying an RV park – for many owners – is to “self-manage” the property. But is this the right choice for you? In this episode of the RV Park Mastery podcast, we’re going to explore what it’s like to self-manage an RV park and some of the issues that should be considered in making that decision.
Episode 20: Should You Self-Manage? Transcript
Sure, RV parks are beautiful investments, but they're also in beautiful settings, and many people want to take advantage of that. They want to self-manage that RV park to give the maximum quality of life. This is Frank Rolfe for the RV Park Mastery podcast. We're going to talk about the concept of self-managing an RV park and whether or not that would be the right decision for you.
Let's start off by defining what self-management is. When you self-manage an RV park, what happens is you buy the RV park, but rather than having it as an investment far from your home, you actually live either in it or next door to it or very near it, and each day you run that RV park. You show up and you wear many hats. You're indoors, you're outdoors. At one minute, you are a customer relations expert. At the next issue, you're a problem solver. It's a people person job, but it's a very, very active and entertaining way to spend your time, so with that being the case, let's talk about deciding whether or not self-management would be right for you.
Number one, it gives you greater control of your investment. In fact, all the best RV parks in America, almost without exception, are self-managed. I'm talking the top of the top ones, and it's easy to understand why. Have you ever been to that really, really good Italian restaurant in your city and have you noticed there's always the owner going table by table saying, "How was your meal tonight? How could it have been better?" That's because that owner is so hands-on with that restaurant. He's involved in every facet, the selection of the food, preparation, everything, and as a result, the customers couldn't be more thrilled.
In fact, having the owner there itself imparts a little extra something to the meal, so if you want to truly have a top flight RV park, then living in it and self-managing typically is a big part of delivering that top of the top five-star experience. Also, it gives you a much greater ability to learn the business. There's no question that when you are managing the business hands-on, you learn so much more than if you do it remotely because you then master every part of it, and you're able to think through ways of cutting costs and raising revenue that someone from afar could not come up with.
Also, it gives you the highest possible cashflow on your investment because instead of paying someone else to manage, you're going to pocket that money, and with the manager being one of the largest line items in the RV park's expense statement, by eliminating that one item, you are going to be able to drive the highest amount of income out of your down payment. But the big one, perhaps the most important reason someone self-manages an RV park is for quality of life reasons. Let's face it. It's fun to be your own boss. You set your own schedule, you answer to no one, and at the end of the day, you reap all of the rewards.
Now, at the same time, that can be flipped around to a negative because you're responsible for everything, and as a result, every day you can't escape the fact there's bills to pay and people to log in, but it's that control mechanism. It's that ability to be totally in charge and answer to no one that's very inviting for people, particularly in times like this. In the new America, as unstable as it may be, people like the stability of knowing each day what they'll be doing and the fact that they control their own destiny, something many people obviously do not have in their regular day job.
On top of that, you have the fact that you typically are living in a very pretty area, an area that has a lot to offer. That's why the RV park is there in the first place, geographic beauty, weather, beauty, all kinds of activities, both right there and regionally, and so that's a big consideration. You only live once in life. If you're not completely happy with the way things are right now, this gives you a chance to do something completely different in a completely different setting. And also don't forget, it's really hard to live in the area some of these RV parks are located unless you have a built-in job like managing your own RV park.
There may not be any nearby jobs because you're in a scenic area and the jobs there are, well they wouldn't be that great, so there's all kinds of good reasons to self-manage, but now let's flip that around. Why would you not want to self-manage the RV park? Well, one reason is that you just may not want to do it. You may want to own an RV park and get to all the kinds of high rates of return that it offers, but you may not want to physically be the manager, and I fully understand that. There's some people who would say, "I just don't want that job. I would much rather hire it out and let somebody else do it, and I'll collect the money and I'll make all of the financial rewards, but I don't want to actually do the job," and if that's the case, well, then it's good to acknowledge that and there's certainly nothing wrong with that.
Another problem may be that your day job is just too valuable. Bear in mind, managers of RV parks, it's not a super high earning occupation. Typically, a manager might make 30,000 a year, $40,000 a year, but if you're an attorney making $250,000 a year, it's kind of hard to rationalize, if you're enjoying being an attorney, to give up that $250,000 job to get a $40,000 job. So another argument against self-managing would be if your day job simply can't, you can't make any sense with your current earnings against what you'll be earning as an RV park manager.
But the big one, probably, which is the same reason why that you might want to self-manage, is what you might not, and that's basically your quality of life. There's nothing more important in the world than living happy. We all don't really know perhaps the full meaning of life, but we know when we're happy and when we're sad, and to me, a high quality of life means that you're happy and satisfied with your life. And if it would not make you happier and more satisfied to self-manage the RV park, then why would you do that? You can certainly delegate it to somebody else. There's a huge number of RV parks in America that are clearly not self-managed, so there's no reason why you'd even consider doing that unless you feel that increases your overall happiness.
So if you say, "No, I really like my life in an urban environment. I don't want to live out in the environs, but I do recognize that it's a great investment. I just don't want to physically live there," there's nothing wrong with that. It just all is really going to come down to a matter of choice. Now, I will tell you that the largest RV park in the United States, in Myrtle Beach, South Carolina, that, despite its massive size, thousands of lots, an enormous amount of income, that's self-managed so definitely there's advantages to being self-managing. That property, they could easily hire somebody else to manage it, but the family manages it themselves.
Yet, there's other RV parks that are also high earning and they're not self-managed, and it really just comes down to your individual goals. There's nothing that says you can't buy an RV park being extremely successful and make lots of money and not self-manage it, and there certainly is no one who could ever say that self-managing the RV park was a bad idea because statistically that's not true. It's often a very good idea, but the big one is, it's an idea, a choice that you have to make. Only you know what is right for you.
So just think about it, think about the options, and you don't have to decide immediately. Many people buy an RV park, they own it for a while, and then they decide to self-manage it. Others buy an RV park during their career and then later when they want to retire, then they move in and self-manage it. It's not an all or nothing situation. You don't have to make that decision immediately. You can also make it over time, but it's always something that's on the table, and there are very few investments out there that offer that one additional rate of return, that quality of life.
This is Frank Rolfe with the RV Park Mastery podcast. Hope you enjoy this discussion of a very important point, the ability to self-manage, the benefits of self-managing, all the good things that can come of it, but all the considerations you need to have to make sure that it's the right decision for you. Hope you enjoyed this. Talk to you again soon.