Hotels Without Walls
March 1, 2025
Since I’ve been dealing with them lately I thought this would be a good time to talk about how RV parks can be a great way to increase your Financial Momentum.
What Is An RV Park?
Basically it’s a hotel without walls where the guests bring their own rooms. If you’re looking to invest in a business or commercial real estate RV parks can be a great choice and can be much easier to own and operate than a hotel.
As a broker I’ve listed and sold RV parks in the past. Recently I’ve been helping a client find investment properties to buy. His property type of choice is RV parks. An RV park is one of those properties that is both a business and commercial real estate. At the time this article was written there are approximately 140 RV parks listed for sale in Texas alone, and 430 nationwide.
What’s The Difference Between RV Parks And Hotels?
1. Hotels have an expensive building and parking lot to maintain.
RV parks have pad sites with electrical service, and sometimes water well and septic systems. Some parks are on city water and sewer. And they have driveways to maintain. Overall, much less maintenance.
2. Hotels are labor intensive, requiring housekeeping staff, maintenance staff, and front desk and management staff.
RV parks in many cases can be ran by one person. The larger parks might require maintenance staff but can be contracted to local contractors.
3. Hotels have equipment to maintain – elevators, boilers, kitchen equipment and sprinkler systems.
RV parks – no elevators, no boilers unless it’s a large resort type park with a spa and large shower and laundry facilities. No kitchen equipment unless there is an onsite restaurant. No sprinkler systems. Many parks do have laundry machines which are an extra income source.
RV Park Management
A well managed RV park can provide a great net operating income, usually much higher than other real estate investments. And the properties are easily expandable if the extra land space is available. That would increase your return and increase the value of the property making it fairly easy to increase your profit when you exit.
Like hotels, there are management companies that specialize in managing RV parks if you plan on being an absentee owner. Another option is to hire a part time or full time manager to live onsite.
Financing
Since an RV park is a business you can use SBA lenders for financing. That could mean a low 10% down payment instead of 30 to 50% required with conventional lending.
There can also be seller financing involved. Many owners are retiring and will be willing to seller finance for three reasons.
1. Deferring taxes. They can spread their taxes due from the sale over the term of the loan rather than having to pay all of it up front.
2. By using seller financing they can still earn an income from the park for several more years without any of the responsibility.
3. They will get a higher return on the sale because they are charging the buyer interest on the loan. They’ll not only get the profit from the sale but they’ll get the profit the bank would normally have gotten from the interest payments.
In a seller finance situation it is possible for the buyer to benefit by getting better terms on the loan than a conventional lender would give. Everyone wins.
Types Of RV Parks
There are different types of RV parks. Some do only daily or weekly rentals and cater to the traveler who stops for the night and moves on or the vacationer who stays for several days to visit a nearby destination or event. These short term rentals will always be at a higher rate.
Sometimes the park itself is a destination. Many parks are RV resorts with all the amenities that a hotel resort would have but without the rooms.
There are extended stay parks that only rent by the month. These are usually found near a place where there is a housing shortage like around a booming area with large construction projects, construction workers, oilfield workers, etc.
And there are some parks that do a combination of short and long term rentals.
If you have questions about RV parks feel free to send me an email. Just reply to this email or send to paul@financialmomentum.co. I’ll be happy to answer your questions.
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