The RV lifestyle is more popular than ever, with over 1 million households now owning an RV in the United States. According to a report by the RV Industry Association, RV shipments are expected to hit 589,100 units in 2022, an all-time high and indicative of the growing demand for RV travel and vacations. With more RVs on the road, quality places for them to park are also in increasing demand.
Starting an RV park can be an extremely lucrative business opportunity for those looking to capitalize on this growing trend. Not only can park owners bring in steady nightly and monthly rental income, but additional revenue streams like utility hook-ups, convenience stores, and recreation rentals can also boost the bottom line. An RV park with 50 spaces could generate over $500,000 in annual revenue.
This guide will show you how to start a RV park. Topics include market research, competitive analysis, business accounting, obtaining business insurance, sourcing equipment, and more. Here’s everything you need to know to start a RV park.
1. Conduct RV Park Market Research
Market research is an important factor in designing a thorough business plan. It offers insight into your financial projections, target market, local market saturation, trends in services and products, and more. There are two types of market research, primary and secondary, both are required to start your own RV park.
Some details you’ll learn through market research include:
- Specific data on privately-owned RV camping park economics shows the immense earnings potential.
- The actual profit margins for RV park owners are also favorable.
- Profit margins typically range from 30% to 60% of gross revenue depending on amenities offered and operational efficiency.
- The return on investment timeline for new RV parks is also appealing. RV parks are versatile and can also function as AirBnB’s, but that does require consistent property management that you may or may not do yourself.
- Building a new park from the ground up can require 2-3 years from initial planning to opening.
- Most new parks are profitable within 3 years of opening and earn 100% ROI on the initial investment within 5-7 years.
Analysis of current market data indicates that the RV park industry is experiencing rapid expansion in tandem with the rising popularity of RV travel. With strong revenue potential, high-profit margins, and attractive ROI timelines, RV parks represent an extremely lucrative sector with immense opportunities for continued growth.
2. Analyze the Competition
Understanding the competitive landscape is critical for any new RV park owner. Competitive analysis gives you an idea of how other mobile home parks operate, what kind of RV park development is happening in your area, pricing guides, and more.
A few key ways to get started analyzing competitors include:
- Research existing RV parks in the immediate area and within a 60-90 minute drive.
- Identify the number of competitors, their sizes, amenity offerings, pricing, and occupancy rates if possible.
- Drive through parks and scrutinize site layouts, landscaping, and facility conditions.
- Review sites like RV Park Reviews and AllStays Camp & RV to see visitor commentary.
- Monitor feedback over time to spot improving/declining satisfaction trends.
- Google Maps and satellite view can provide additional perspective on surrounding property usage and zoning, flood zones, terrain challenges, and opportunities for differentiation.
- Search online review platforms like Google, Facebook, and Yelp to compile competitive ratings.
- Analyze competitors’ websites and digital marketing tactics using SimilarWeb and SEMRush.
- Examine search traffic, referring domains, keyword targeting, and online conversion efforts.
In total, the comprehensive competitive analysis will arm any prospective RV park owner with key intelligence to either carve out a niche or develop a superior park. It illuminates precisely where competitors are falling short and what they are executing well to properly position a new entrant park. With so much revenue at stake, the investment of time is well warranted.
3. Costs to Start an RV Park Business
Campground ownership requires a significant upfront investment. Key costs include land acquisition, utility access and hookup installation, land clearing and preparation, road and site development, permitting, and park amenities.
- Land Purchase – The land acreage depends on the planned park size, with typical parks ranging from 5 to 30 acres of real estate. Land suitable for an RV park costs $15,000 – $40,000 per acre, putting the total from $75,000 up to over $1 million.
- Site Work & Utility Installation – Transforming raw land into powered RV sites requires extensive site excavation, grading, drainage, electric, water, and sewer installation which can tally $15,000-$30,000 per site. A park with 50 sites may spend $750,000 to $1.5 million.
- Amenities & Common Areas – Most parks require shower/restroom buildings, laundry facilities, dump stations, an office, a pool, and recreation areas. These can cost $300,000 to $500,000 depending on sophistication.
In total, building a new 50-site RV park often entails $2 – $3 million in start-up costs. Purchasing an existing park with infrastructure in place substantially reduces upfront capital requirements.
In terms of ongoing operating expenses, RV park owners face:
- Staffing Expenses – Most parks require a live-in manager plus cleaning and maintenance staff tallying $50,000 – $100,000 per year or more for payroll.
- Site Costs – Water, electricity, internet access, trash pickup, and sewer service can cost $100 – $200 monthly per site.
- Maintenance & Repairs – Expect $150+ yearly per site for upkeep and periodic infrastructure repairs like asphalt overlay, utility repairs, or replacement amenities.
- Insurance – General liability and property hazard insurance typically costs $100-$150 annually per site.
- Marketing – Attracting customers through online ads, brochures, trade shows, etc. may require a $10,000+ yearly budget per 50 sites.
- Accounting/Legal – External professional services may tally $5000+ per year.
Considering these elements, owners should budget approximately 50% of gross revenue toward operating expenses. The remaining 50% covers debt payments, taxes, and profit.
4. Form a Legal Business Entity
Structuring your RV park legally is a key first step that impacts taxes, liability exposure, and options for growth. The main entity types each have pros and cons for park owners. Many RV parks choose to go with an LLC. Here’s a breakdown of your options.
A sole proprietorship constitutes the simplest framework – you and the business are one entity. Income and losses flow through to the owner’s tax return. This simplifies paperwork and tax filing. Sole proprietors have unlimited personal liability for business debts, lawsuits, or claims. For an RV park with extensive facilities serving the public, Exposure to legal claims makes this entity hazardous.
Forming a general or limited partnership can allow multiple owners to share investment and liability risk. Profits pass through to personal returns similar to a sole proprietorship. However, similar unlimited liability also exists for general partners. Limited partners enjoy liability protection but have limited control.
Converting to a C or S corporation better shields owners from legal and debt exposure but requires obs more complex tax filings. S-corps can offer some benefits of partnerships with corporate protections. Double taxation of income with a C-corp is also disadvantageous.
Limited Liability Company (LLC)
Most RV park experts recommend forming an LLC over other structures. As an LLC:
- Personal assets enjoy strong liability protection if properly structured. This safeguards owners.
- Adding additional partners is straightforward through issuing ownership shares called units. Family succession is also simplified.
- Taxation occurs at the personal level only, avoiding double taxation issues of corporations. This benefits profits.
While requiring formal registration and operation agreements, LLCs pair excellent liability shields with the pass-through taxation of partnerships and the simplicity of sole proprietors. Consult a business attorney to ensure proper setup. But for RV parks, LLCs make for a compelling business structure.
5. Register Your Business For Taxes
With an LLC formed, securing an Employer Identification Number (EIN) should become an immediate priority. The EIN serves as your business’s social security number for tax purposes. It is required for opening business bank accounts, paying employees, filing returns, and more.
Thankfully obtaining an EIN is free and fast directly through the Internal Revenue Service website. Simply:
- Navigate to the Online EIN Application.
- Select “View Additional Types, Including Tax-Exempt and Governmental Organizations” and choose “Limited Liability Company” as the responsible party.
- Answer the questions regarding LLC ownership structure, country location, reason for the EIN, and start date.
- Submit the completed form and your EIN will be provided immediately.
The entire process should take under 10 minutes. With EIN in hand, ensure to share with business partners, supply on state/local license applications, and use on all tax documents.
State-level tax compliance is also imperative. Most states levy sales tax on goods and services. The thresholds, licensing costs, filing procedures, etc. vary.
Research requirements for securing a seller’s permit, sales tax ID, and business license through state government departments. Factor any fees into launch costs and display tax licenses publicly onsite. Consider sales tax implications when pricing rentals and amenities.
Managing federal and state tax obligations keeps RV park ownership profitable while avoiding penalties. Compliance provides the necessary credentials to legally operate while allowing owners to deduct eligible expenses. Invest time upfront to register properly.
6. Setup Your Accounting
With multiple revenue streams from site rentals, utility fees, and amenities, accounting complexity can overwhelm new RV park owners. Establishing organized financial processes and controls is essential early on.
Open a Business Bank Account
Secure separate business banking and credit accounts. Never co-mingle company funds or expenses with personal finances. Mixing the two invites IRS scrutiny if audited. Have clients and vendors remit payments to dedicated business accounts only.
Online accounting software like QuickBooks can automate and simplify bookkeeping. QuickBooks sync directly with bank/CC statements to import and categorize transactions and track payables/receivables, inventory, budgets, and KPI dashboards. This eliminates manual entry and provides real-time visibility at tax time. Expect costs of $15-50 monthly.
Hire an Accountant
Supplementing with an external accountant adds professional oversight for finances and filings. Typical monthly retainer fees range from $200-500 covering activities like:
- Recurring reconciliations – Validating bank/CC statements to match company books. It helps identify discrepancies early.
- Processing payroll including payroll tax filings and annual W-2s
- Preparing financial statements – Key for monitoring current year performance vs. budgets
- Sales tax calculation and filings if charging occupancy tax
Additional year-end support filing business returns and sales tax recaps costs around $1000-2000. Worthwhile to ensure IRS compliance and maximize write-offs. Deduct fees as ordinary business expenses.
7. Obtain Licenses and Permits
While tedious, securing proper business licenses and permits is imperative for legal RV park operations. Find federal license information through the U.S. Small Business Administration. The SBA also offers a local search tool for state and city requirements.
Common RV park permits include:
- State Campground License – Nearly all states require a state-issued permit to open and operate an RV park legally. For example, California mandates securing a permit through the Department of Housing and Community Development.
- Building Permits – Constructing park infrastructure for bathhouses, pools, laundries, roads, utilities, and sites necessitates municipal and/or county building permits. Ensure to file proper permits with agency planning departments before breaking ground to avoid potential delays or remediation orders.
- Septic And Well Permits – Safely installing waste drainage fields, septic tanks, and potable water wells for the park requires adhering to state environmental department permit protocols during development.
- Liquor Licenses – If offering bar or lounge areas selling alcoholic beverages on-premises, active liquor licenses must be displayed as required by county or state alcohol control boards.
- Business License – Most cities and counties require annual business licenses for companies operating within their boundaries, including RV parks. Review local business tax requirements.
In addition, some locations may mandate additional permits covering signs, pools, fueling stations, food handling, events, and more. Verify specifics based on park amenities offered.
8. Get Business Insurance
With dozens of guests on-site daily, RV parks endure substantial liability risks from accidents, injuries, fires, crime, and natural disasters. Lacking adequate insurance coverage invites financial catastrophe for owners’ investments and assets.
Without coverage, imagine the following scenarios: an overnight fire sparked by an electrical issue guts the park’s laundromat facility and inventory, destroying the building and costing huge amounts of money in damage and lost revenue. Or, a child drowns in an unfenced section of park creek.
The parents rightfully sue for negligence without insurance to pay lawyers or a settlement, potentially costing untold millions. Or, one night, sewage from a damaged underground pipe floods multiple RV sites, destroying vehicles. Remediation and guest compensation absent insurance could tally hundreds of thousands in costs
Safeguarding against scenarios like these requires properly insuring the business. Standard policies to obtain quotes for include general liability – which covers 3rd party injury/property claims like guest falls, crime, or fire disasters. Often a minimum of $1 million.
Property insurance would reimburse repairs or rebuild from disasters damaging structures, fences, roads, and utilities and should insure for the rebuild value. Business interruption insurance provides reimbursement for income lost following disasters while closed for repairs.
Quoting specifics first requires tallying all park assets and risk factors. The Small Business Administration provides a thorough risk checklist and insurer guidance. Local agents can also assist in reviewing needs. Expect costs ranging from $5000 to $20,000+ annually based on scale.
While costly, comprehensive insurance reduces owners’ financial risk and makes recovering from the worst-case scenario possible. The adage rings painfully true – better safe than sorry.
9. Create an Office Space
Operating a thriving RV park mandates a dedicated office space for customer service, administrative work, and business storage needs. While site-based, small home offices often suffice initially, scaling space with the business proves vital over time.
During launch, owners can conserve costs by setting up a basic home office. Designating a room, basement, or garage area for an office and storage can meet immediate needs if space allows. Expect to budget $2,000+ for a desk, file cabinets, chairs, phone, business computer, and printer to start.
For many RV site owners, the most common office is on-site. This lets you remain close to clients for ongoing needs while maintaining a work area for administrative duties. Building an on-site office at an RV park could run $5,000 to $10,000 plus office supplies and electronics for a small modular space.
Most full-time or multi-location parks require standalone offices, especially if operating vacation rentals or other remote aspects requiring an off-site base. Budget accordingly in projections as scaling necessitates eventually transitioning from the dining room table. Consider coworking spaces like WeWork to avoid long-term leases.
10. Source Your Equipment
Launching an RV park requires considerable equipment and materials for clearing land, installing utilities, constructing amenities, and maintaining operations. Thankfully, businesses have options when sourcing necessary items.
For those financing development through investors or traditional loans, buying new machinery from commercial dealers ensures full warranties and longevity. Items like tractors, trenchers, road pavers, and site utilities cost significantly more but endure years of usage.
New amenities like pool heaters, playground sets, and building HVACs similarly last if properly installed and maintained. Shop options at Caterpillar and John Deere plus RV park specialists such as TengoInternet.
Purchasing refurbished amenities also saves thousands over new while adding lifespan vs items on secondary markets.
Another capital-conserving option includes renting bigger machinery needed short-term like excavators, trenchers, or road paving equipment. Home Depot’s tool rental department offers reasonable daily rates on common construction gear. Ask any hired contractors about their rental sources too and compare pricing.
11. Establish Your Brand Assets
Crafting a distinctive brand presence fuels recognition, trust, and customer loyalty for RV parks in competitive markets. Investing in professional brand assets grants credibility while allowing consistent marketing.
Design a Logo
An iconic logo sets the foundation. Consider bright, friendly designs that encapsulate the location and amenities. Looka provides affordable DIY logo maker tools to explore creative approaches.
Display the logo prominently on the park entrance sign, website, merchandise, and print literature. It quickly becomes a visual shorthand for the property.
Print Business Cards
Pair branding with custom business cards, flyers, and brochures from Vistaprint. Include photos of amenities, site maps, and contact info like the vital business phone number.
Get a Business Phone Number
Establishing a dedicated business line allows for listing key details in directories. Mobile messaging also proves more professional than personal phones. RingCentral offers flexible cloud PBX solutions to smoothly handle caller overflow from any device.
Obtain a Domain Name
Likewise secure matching domain names for the brand website. Good domain names mirror the brand name and slogan. Namecheap facilitates quick, affordable registrations.
Design a Website
Well-designed websites quickly convey the brand personality while enabling direct bookings. Those adept at WordPress, Wix, or Squarespace can craft great DIY sites. Otherwise, hire web developers on marketplaces like Fiverr to actualize concepts. Optimized mobile responsiveness provides the convenience travelers expect.
12. Join Associations and Groups
While competitive, the RV community thrives on mutual support and sharing knowledge. Tapping into local and national groups grants access to invaluable insider expertise when starting an RV park.
Local RV Associations like the California Association of RV Parks offer members-only education covering park best practices, news updates, and an insider network for advice. Annual events provide face time with owners and vendors. Neighboring state chapters merit joining as well to expand connections.
Attend area RV trade shows and rallies advertised on sites like Meetup. Subscribing to regional event groups keeps new entrepreneurs abreast of the latest gatherings. Talk to vendors about distribution partnerships, secure contractor referrals, and brainstorm with attendees.
RV owners and travelers congregate in prolific numbers on Facebook. Join relevant Groups like Must Visit RV Campgrounds and Free and Affordable RV Camping in the USA to engage with thousands nationwide. Pay attention to frequently asked questions and popular topics to identify current needs. Groups for specific states and brands offer targeted audiences too.
13. How to Market an RV Park Business
Effective marketing proves vital for RV parks to drive bookings and remain visible amid intense competition. With countless parks bidding for road-tripping guests across channels, those making the biggest impressions stand to gain the most travelers.
Tap into existing social circles first when launching parks. Word-of-mouth referrals from delighted visitors offer a powerful organic endorsement. Satisfied customers also voluntarily review sites like Yelp, Google, and Facebook, lending credence to newcomers. Seed early happy campers by inviting friends and family to experience the amenities firsthand.
Digital tactics then help parks scale impressions and bookings exponentially. Consider:
- Search Engine Marketing – Target those actively seeking local RV sites through Google/Bing ads plus search-friendly web content optimized for opportunities identified using tools like SEMrush. Prioritize traffic quality over quotas.
- Social Media Marketing – Create social media accounts highlighting sandy beaches, mountain views, and community events that make the park special. Share visually engaging lifestyle shots of families gathered around campfires or grilling under the stars. Geo-target summer road-tripping demographics.
- Email Marketing – Send occasional park newsletters with special discounts for repeat customers to incentivize direct return visits. Segment sending by geography, past stay frequency, and more for relevance.
- Influencer Marketing – Reach out to RV travel bloggers, photographers, and social media personalities to experience the park first-hand in exchange for exposure across their channels. Millions follow their journeys.
Traditional approaches are also successful in RV park marketing. Some common traditional marketing steps include:
- Print advertising in RV lifestyle magazines
- Flyers at travel centers
- Billboards along highways near entrances
These traditional marketing tactics have roles in driving awareness. Measure responses to gauge impact as you go. Keep messaging consistent emphasizing the signature amenities and experiences that set your park apart.
14. Focus on the Customer
Delivering exceptional customer service proves invaluable for RV parks in earning guest loyalty and securing referrals. In an industry relying primarily on word-of-mouth endorsement, ensuring vacationers feel welcomed and cared for keeps sites booked.
The RV travel community remains tightly knit with owners frequently consulting one another on quality parks worth visiting. A single disastrous stay with rude staff or faulty hookups gets broadcast quickly across regional forums and rating sites. First impressions matter.
Likewise, when guests thoroughly enjoy their stays, they excitedly share destinations with friends planning trips or even strangers met on the road. RV travelers covet insider tips on hidden gem locations.
Capitalize by training staff to proactively address complaints, handle maintenance emergencies promptly, and acquaint guests with the area’s highlights. Simple perks like welcome goodie bags, discounts in sundry shops, and social gatherings make visitors feel valued.
Stellar customer service earns fans who then eagerly endorse the park both online and off. Over time, recognition within the RV community grows to where travelers specifically route trips to experience the location for themselves.
For RV parks, delivering on hospitality serves both purposes of fueling word-of-mouth marketing and repeat visits. The initial investment in staff and training returns exponentially over time through retention and referrals. A little extra care goes a long way.