7 Advantages to Investing in RV Parks over Traditional Multi-Family Properties

RV parks are a niche segment of the real estate market that offer some unique benefits for investors. RV parks are properties that provide spaces for recreational vehicles (RVs) to park and hook up to utilities, such as water, electricity, and sewer. Some RV parks also offer amenities like showers, restrooms, laundry facilities, pools, playgrounds, and Wi-Fi. RV parks cater to travelers who prefer to stay in their own vehicles rather than hotels or motels. They also appeal to retirees who enjoy the freedom and flexibility of living in an RV.

RV parks are often overlooked by investors who focus on more conventional types of properties, such as apartments, condos, or single-family homes. However, RV parks have some advantages over traditional multi-family properties that make them worth considering. Here are seven reasons why investing in RV parks can be a smart move:

1. Higher Return on Investment (ROI): Generally, RV parks offer a higher ROI than most other types of commercial properties. According to CXRE Commercial Real Estate¹, the average ROI for RV parks is between 15% and 20%, compared to 10% to 12% for multi-family properties. This is because RV parks have lower operating costs, higher occupancy rates, and less competition than multi-family properties.
2. Lower Maintenance Costs: RV parks have very little infrastructure and facilities to maintain compared to other investment property types. As an RV park owner, you are mainly responsible for providing the land and the utilities, while the tenants take care of their own vehicles. You do not have to worry about repairing roofs, plumbing, appliances, or flooring, as you would with multi-family properties. The only major expenses you may incur are for landscaping, paving, and security.
3. Higher Occupancy Rates: RV parks tend to have higher occupancy rates than multi-family properties because they cater to a diverse and growing market of travelers and retirees. According to the Guardian Liberty Voice², there is a high demand for RV parks in the US, especially in areas with natural attractions, historical sites, or seasonal events. RV parks can also attract long-term tenants who prefer to stay in one place for months or years, rather than moving around frequently.
4. Less Competition: RV parks face less competition than multi-family properties because they are a niche market that requires specialized knowledge and skills. There are fewer investors who are interested in or capable of operating an RV park successfully. Moreover, there are fewer new RV parks being built due to zoning restrictions, environmental regulations, and land availability. This means that existing RV parks have a competitive edge and can charge higher rents and fees.
5. Easier Tenant Management: RV parks have easier tenant management than multi-family properties because they have more flexibility and control over their tenants. Since most RV park tenants pay in advance on a daily or weekly basis, there is less risk of non-payment or late payment. If a tenant causes problems or violates the rules, it is easier to evict them from an RV park than from a residential property. You do not have to go through a lengthy and costly legal process, as you would with a lease or a month-to-month agreement.
6. Additional Profit Centers: RV parks have additional profit centers that can increase your income and diversify your revenue streams. For example, you can offer ancillary services such as propane sales, laundry facilities, vending machines, Wi-Fi access, or storage units. You can also host events such as concerts, festivals, or rallies that can attract more visitors and generate more revenue. Another option is to buy or lease the RVs yourself and rent them out to your tenants, acting as the bank and the landlord at the same time.
7. Potential Land Appreciation: RV parks have potential land appreciation that can boost your long-term returns and exit strategy. Depending on the location and the market conditions, your RV park land may increase in value over time due to gentrification, development, or scarcity. You may be able to sell your RV park for a premium price to another investor or a developer who wants to use the land for a different purpose.

Investing in RV parks can be a lucrative and rewarding venture for savvy investors who are looking for alternative ways to grow their wealth and diversify their portfolio. RV parks offer higher ROI, lower maintenance costs, higher occupancy rates, less competition, easier tenant management, additional profit centers, and potential land appreciation compared to traditional multi-family properties. However, investing in RV parks also requires due diligence, research, analysis, and expertise. If you are interested in exploring this niche market further, you may want to consult with a professional real estate analyst who can help you find the best opportunities and strategies for your goals.