The current post Brian T has going about buying an RV park has rekindled a long standing goal for our property in Montana. Any thoughts or feedback on the subject would be appreciated. I'm reading Brian T's thread as well, so I've got a general idea of some feelings on the board towards the idea.

As the subject states, how much is too much when deciding on the size of a RV park? When does it turn from a small manageable business into a full blown headache that nearly owns you? (I realize proper planning and control makes all the difference in any business like this).


Here's the general points of our situation.

-We have a substantial section of land we purchased several years back in Montana. It is directly off an interstate and equally as close to BLM hunting land, the Missouri River, and 10 minutes from a large recreational developed lake. The rolling terrain in the lower section will require minor excavation for utilties, site pads, and the ground cover requires minor upkeep as it is.

-We have installed 2 RV pads on the property to date, they have basic ammenities, nothing special, but the privacy of the sites is good for those who would want to be left alone with a family for the weekend or long term.

-We have an opportunity to purchase an adjoining parcel of land next to our own in the near future. There is no rush to sell it by the current owners. We can do without it if we stick with a small campground, but the opportunity to acquire more land later will be limited. (and likely more costly once an obvious income potential is apparent to the seller).

-We have several income properties already, strictly residential homes, long term lease. We are fully aware of the headaches that landlording entails and the upkeep of ownership. We don't want to stack and pack RV slots on top of each other, so hopefully this will attract full timers to the area in the summer months on monthly terms primarily.

-We have looked into the zoning issues, taxes, permits etc. None are daunting, and are actually within in our means financially without huge debt. Since we already own our land free and clear, and have been saving for this for a while now, loans are not a huge issue for us. We have enough capital to set up probably 10 slots without digging in too deep. Our one unknown we're still working on is a main guest building, which could be built with other plans in mind if the RV park does not become a viable income source.

-My main reasoning for RV slots is the low initial investment compared to cabins, not to mention the reduced maintenance RV sites have compared to cabins or cottages. (Long term, we do want to build cabins into the plan, but not until we have a few seasons under us)

-We have a reliable & steady income to rely on already, so this will not be a sole income issue for us. We have every intention of living 100% of the time on the property in the upcoming years. We also have reliable property managers to cover our absence that we use already. (Even with the reality that daily cash income is less traceable than monthly rent deposits)

-We are approaching an opportunity to move back to the Northwestern Region in the upcoming year, so we are back planning for this once again. We are very slow and conservative in decisions like this, so we need to start considering any unexpected pro's and con's now.

Would we best to look at small initial occupancy, or just get multiple rows at the road front to allow more occupancy/income? The sizing of a controllable and enjoyable park is one of the things I am having a real hard time visualizing.


Thanks for any advice you may have, in ANY amount that can help with this.

This message has been edited. Last edited by: Dave K.,

You seem to have well done your homework.

'Build it and they will come' is not always true in business. The size of a park should be based on it's real potential.

You need to look a who will be your clients and who are your competition?

You should look at all campground within a couple of hundred miles from you.

How full are they? When ?
To see what kind of client they have.
Are they what your looking for.
Is there enough of 'you kind' of client
Why would they choose your park
What are the competition offering that you can't

You have what most people wanting to start a small business don't have, experience and funds.



Lynn
This advice is given for free and probaly worth what you are paying for it

I worked at a park in Idaho off of I80 for a summer - you probably remember that Dave. It was 50 RV sites + tent sites. Small bath house - Mens: 2 showers 2 urinals, 2 stalls. Womens: 3 showers, 3 stalls. 2 sinks in each. It was about right for that campgrond because of the large tenting population. A smaller campground could get away with 2 showers each, 2 stalls each. No problem.

Owners were non-resident, although they worked at the campground nites/weekends. One owner was there every day by 2-3pm. But the campground was basically run by the workampers. It took 3 couples rotating shifts of office/maintenance, plus another person part-time to clean restrooms. And the owners on weekends.

This campground had lots of grass. This required at least 16hrs of labor a week, even with a good zero-turn commercial mower. So watch the amount of grass - it looks good but can kill you on labor and equipment.

We served basically transients off the interstate. We could easily have 40 rigs come in between 3pm and 7pm on a fairly typical "busy" day. The income from such a park is good, because you have lots of "daily" rates. At the time, several years ago, the overnight rate was $28. There was not a weekly or monthly rate, although the owners would negotiate one. There were NO seasonals taking up valuable real estate.

A park that started with 10-15 sites with 50 amp service on 40-45'x80-85' gravel pullthru sites could probably self-finance the next 10-20 sites within the first season. A rough figure of $6-8K per site for infrastructure/site development once you have the basic sewer service established will get you going.

I just put in "new" electric service here - two 200 amp service panels, a pole, and a transformer/entrance setup by the power company. The power company charged $8K to bring the line in about 400', set up the service pole and upgraded transformer. It was 40 hrs labor to put up the service panels (2), the framework, grounding and connect to the service. Plus the equipment cost, which was the least of it. If you get to the stage that you want it - I can figure your electric needs for the size you want to do if you can not do it yourself. RV parks have special code requirements. If you do not have a code book do not be tempted to use your commercial or residential knowledge to figure it. The power loading factors and wire requirements are different.

Sewer service is a roll of the dice. It depends on county requirements, how you are zoned, and what your skills are. In the campground referenced above, we had an elevated field that we pumped up to. This was sufficient to service the 50 sites. (there was a topographical reason for this layout...not relevant here) It was pumped from a double holding tank setup - one flowed to the other, then pumped to the field. The holding tanks were pumped once a year, which was sufficient.

I know you have the skills to run your own sewer/electric. IF your zoning allows it. Some places are very strict about it. Some places allow owners to do it with inspections. Some places require licensed people to do ANYTHING. And some places still allow you to do anything you want....but not many, anymore.

To directly answer your question....a park with 50 sites is easily managed by an owner couple that is on-site. But you will need workampers to help. A park of 140 sites can be easily managed by 3 workamper couples rotating shifts. That is what we do here in CO. 2 days on/4 days off. Bathhouses are cleaned by another person. In CO, where we are now the campground is truely run by the workampers...the owners are only here on weekends. But it does require GOOD help.

Anything more than 150 sites you need fulltime staff, IMO.

Dave, I think there is a tipping point somewhere. The question you asked in the title of this thread has an answer. Will you stay full enough to pay help?? In my case only 48 spaces, it is feast AND famine. When it is full (not often) you must be there 18 hrs a day. When it is empty you don't have much to do so I start other projects that I don't have time to finish(my wife says). I can do the mowing here in 3 hrs on a $12k kubota. What I need and do not have the funds for is office attendants. Some one to answer the phone all day. There is just not enough money taken in with the occupancy we have. Now, on the other hand if you had 150 full sites you would need several folks to help and you would possibly never have to work it your self. I know of some parks like that in destination places that don't have to worry about occupancy. The worst part of my park owning experience was having to get over other people taring up your stuff you worked so hard installing and paying for. I still don't like it. People are the nastiest animals on the planet and do stuff for meanness only. I still don't like that. I keep in the back of my mind that I do have a good backhoe and several bags of lime if needed.

There is nothing of significant size near us. We are in a recreational area, but most of the land is developed into single family dwellings, large acreage lots etc.

There is a small 10 to 15 slot RV park behind a little tavern/restaurant about 5 miles from us. It is nothing I would want to stay in myself, open bare lots with gravel, sewage, electric, water and a picnic table. I think 1 or 2 of the lonr term slots have small lean-to structures over the picnic tables. They are well over 20 years old, easily. It is usually utilized by day campers to access the Missouri River for fishing. Once in a great while we have seen overnight/ long term users, but not the type of campers we are looking to cater to.

I am not snobbish, but we do plan to restrict the access to courteous vacationers/ full timers who aren't out to get drunk, loud and disturb other guests. There is plenty of opportunity for the idiots to tear up the river bank parking lots down the canyon, which is where most local good ol' boys end up by days end.

I've checked on the sewage permits, and drain field requirements, which due to the size of land we have, will not be too much of an issue. I think I'll be sticking to 50 or under slots total. The traffic of a larger campground may be too much for us to tolerate. We literally have our own interstate access turning directly onto our private road in one direction, so impact to neighboring homeowners is little to none. There are a total of 3 homes on our side of the interstate. The initial impact/ feasibility study we looked into a few years back was good. The county developement office looked positively at our plans, no real red flags to deal with. The biggest thing that made the difference was our layout plan, secluded, set back, and not turning the place into a mobile home park.

Pump stations are rarely if never approved in our county anymore, natural gravity septic systems are about all that will get by the health dept. Thankfully, the soil is excellent, so perk tests are not a problem and the slope will allow for good fall in main lines.


We had planned for 3-4 work campers in the summer months in our initial plans, plus a full time onsite caretaker position throughout the year.

Montana is somewhat still relaxed on property maintenance issues for light commercial property, especially if it is owner occupied. I have enough contractor friends that can cover the licensing issues for the few repair items I am not able to handle as a General myself.

quote:

Originally posted by Jamey Heatherly:

Will you stay full enough to pay help?? In my case only 48 spaces, it is feast AND famine.

Jamey,
That is about where I was/am planning to build things to. I don't want things to get too deep too quick. There is plenty of room for expansion on nearly 200 acres if we choose later. With the additional parcel of land, we'll be over 400 combined, which will also allow for more secluded cabin setups if we make it a full time commitment.

I have a few rather intolerant friends in the local area who enjoy digging holes for tourists and low life types, Cows not Condos is the goingg motto in MT. I understand exactly where you are coming from with the frustration of tenants tearing up our rental homes. We unfortunately lived in each of them while renovating, so it always ended up becoming a personal grudge towards them when things went bad. Thankfully, I've learned to laugh off the bad mostly and appreciate the good tenants we've had and the friends they have become over the years.

Make sure you build a spot to fit our trailer! I can work on tractors and mowers in exchange for a reduced rate!

I am certainly not a financial analyst, but a conservative investor. The rv scene is in the middle of a revolutionary change, with the outcome being unpredictible - due to fuel costs. I would wait to make decisions for a few years until things become more clear.

While the above post certainly raisies some correct issues, I think Dave has an advantage in this situation which makes development of a SMALL park a good thing for him.

First, he owns the land free and clear. Second, he is AT a major freeway exit, so there is not travel/gas associated with staying at his park. This makes it more of a "no brainer" to choose his place instead of another.

Third, he has the skills to build the park himself, in a phased fashion. The skills he does not have he can barter with friends for.

Fourth, there will continue to be people that will travel despite the gas situation. Many will just stay closer to home, but many will travel to the "premier" areas of the country. Which he is located in. So I don't think he will suffer for business. To back up this statement - the park I current work in is having a record season so far. Why? for the above reasons....

If he builds a self financing, phased implementation, starting with 10-20 sites then I think it could be a winner. Assuming you want to be in the park business, and assuming you do not build an overpriced "clubhouse" - which is a major capital investment. I would build NO CLUBHOUSE. I would cater to travelers and monthlies, with a lounge built off the office with fireplace and sitting area with couches and easy chairs. Library on one wall. Free coffee, and pets allowed in lounge if well behaved. Free wifi, too, of course. A single bathroom. This makes for a homey environment that people remember and like. JMO, but I've been fulltime and working in parks for 8 years, so it is based on a "little" knowledge of what seems to work for a small park.

I'm not very concerned about fuel prices effecting things. The type of guests we are hoping to attract are going to travel regardless of fuel costs. I am actually looking forward to the newer trends of RV'ing that some feel is coming. Longer periods at each location to reduce fuel costs is a good thing in my eyes, less turnover and lower taxes to pay out. (30 days or more and the recreational hotel taxes on a slot dropp off, good for me, good for the guest This is what I dealt with when deciding between weekly, monthly, yearly rental setups with our accountant years back. Our area is brutal to nightly/weekly recreational property owners. Several outiftters in the area have bought homes specifically to rent out to fly fishermen, a few we are well aquainted with, and they HATE short term renters due to tax burdens.

I am planning on a Small main office building like Jack mentioned. We will probably erect a shower building on the front side of a maintenance building, something with an adaptable floorplan to allow for a Kitchen to replace one of the shower rooms for a caretaker suite later on.

I like Jack's setup of a lounge area in the main building, clubhouses are rarely worth the money in my eyes. I'd rather see my guests and get a chance to know what they are missing or enjoying, face to face lounges and front desks are the only way to do that. The mainbuilding will be designed to allow for a fallback to a cabin residence in the event we turn sour to public access camphosting.

I have considered long term lease or condo developement, but so far, I can't get the specifics lined out wel enough to feel comfortable with it. We have the zoning allowance for it, just not sure if it will work for us for some other reasons. I've considered incorporating the park and allow for shareholders to address that, then there is no condo fees, homeowners association headaches, just minority shareholders who have access to lots for personal useage. A family member is looking into this for us in more detail, he speaks "legalese".

Due to our location, we have an advantage for several types of clients through out the year. Interstate access is the main reason we selected the property we have in the first place. I can be in 2 major cities of Montana within 45 minutes of pure interstate driving year round. Our property requires less than 1 mile on a private road to access the interstate, a single turn to the onramp one direction and only the overpass and a turn to access the other direction. We are in a canyon valley, so wind and weather is buffered, along with the interstate traffic. I can not hear a single thing from the interstate except the infrequent muffled jake brake far off in the distant down the canyon grade. The timber helps alot as well, which in Montana is rare to have all these in a single location.

This message has been edited. Last edited by: Dave K.,

Dave, let me know a year ahead of time when you are going to build, and I'll come help you if you want a "workamper". I can probably do everything you need...

Jack,
Don't sweat the workcamper scenario, you've got an open invite at the private section 265 a year 365 if you can get in and out in the deep of winter, but I doubt I'll see your pretty white VN camoflague itself into a Montana winter
There will always be projects to do in the upcoming years, I just need to get west of Nebraska to make monthly trips home realistic again. You'll want to be around when I start building another castle, it will be similar to the one in Eugene from the 90's I sprayed. I promise a fun time I'll likely be restricted to the jester's suite by the time I get home though, the southeast is driving me insane, I can't wait for wide open spaces again.