Donna Bourdeaux walks through buying an RV park or campground: price it right, assess the actual condition and realistic upgrades, value it on current income not future promises, match amenities to who you want as guests, and do your homework before you fall in love with the deal.
If you're interested in buying a campground or an RV park, I want to give you a few tips when looking at the process. First off, one of the things that's really going to help you analyze these are to look at the pricing and make sure that is right before you even begin. If the pricing is out of range for the campground, it's kind of like going out to shop for a Jaguar. When you make $10 an hour, it's just not going to work. So make sure that the park is within the range that you're shopping for and can afford. Secondly, looking at the park's condition, you'll want to make sure that the park has some room for improvement. Kind of make a little list of what you think you would do to that park to improve it and to be able to increase the revenue. So increasing the rates, what would you need to do to be able to increase the rates and make a better experience for your guests? Thirdly, look at how quickly this park could turn around. If the park is currently making money, you'll want to be projecting out how much more you think you could make. What is its potential revenue? When you're looking at your potential revenue, don't forget you're not going to pay for the park in its valuation right now based on potential. Never pay for potential. Is that clear? You always want to look at a park and assess where it's at right now. That is where the selling point should be. That owner got it to a certain point. That's where they are going to be paid for it. You're going to assess mentally what you think the potential is and use that in your decision making going forward. But you're not paying the prior owner because there's potential. Okay. And also, when you're looking at the park and looking at amenities, make sure that you're comparing based on who your average guest would be to the amenities. I was recently talking with somebody who's looking to buy a park. They said, we'd love to put in a pool. All right. Do you think that's a good idea? Well, my response is it depends. Who are your guests? If you're on an interstate park and you're gonna have overnight guests coming through, they're not gonna need a pool. So you may be just spending the money to create a pool for yourself and it may not make you any money, but if you're in a family oriented park and you're in an area that can support that pool and a fairly long season, not a really short season, you may be able to make that pool help you generate higher revenues by increasing the rates. So we offer services to help look at the assessment of buying a park, comparisons of different parks, looking at the due diligence process in buying a park, and looking at the numbers. If you are interested in buying a park, I strongly suggest that you take your resources and use them on the front end. Make a good investment in the due diligence process. Before you make a large investment in buying a park, make sure that it is the one for you. Don't let your emotions rule here. Do take some looks at the quantitative part of buying a park too. So I'm Donna Bourdeaux. If I can help you in any way with your assessment of buying a park, don't hesitate to let me know. SA.
