The real estate market is dynamic, with trends and opportunities constantly evolving. With RV Parks Primed for Real Estate Investment due to the impact of sector growth megatrends, it’s vital that real estate investors understand the big picture. In this article we’ll explore the recreational vehicle (RV) park sector and what real estate investors should consider about potential opportunities.

The RV Lifestyle Megatrend

Leveraging megatrends is a crucial factor for consistently successful investing . The RV Park sector is ripe for investment because it is at the crossroads of a megatrend.

The 2023 Outdoor Hospitality Industry Benchmarking Report shows that 78% of parks and campgrounds are individual/independently owned small businesses. And, the biological clock is ticking for these mom & pop owners. Selling motivation increases as owners age creating a buying opportunities that will be harder to find once corporate ownership trends drive up costs.

Think about the timing – just ask those who bought Apple stock at $5 a share or sold their houses in 2006. The gears of the American engine are turning, and successful investments need to be on the right side of those gears to avoid being crushed. This is where the concept of “megatrends” comes into play – and the RV industry aligns perfectly with these trends.

Long-Term Demand Growth

Demand for RV park space is projected to grow exponentially. According to the RV Industry Association, 11 million American households own RVs and per-capita ownership is increasing. Baby Boomers keen on flexible lifestyles are retiring at a staggering rate of 10,000 per day and younger generations have embraced RV travel as normal in our new ‘work from anywhere’ economy.

RV enthusiasm reaches way beyond Boomers. RV Share’s 2024 Travel Trend Report reveals that 74% of Millenials, 56% of Gen X and 67% of Gen Z plan to hit the road in an RV in 2024.

RV use expands beyond camping. The flexibility offered by remote work has fueled a surge in interest for travel and experiential living, making RV parks an appealing choice for those seeking both adventure and a sense of home. The demand for affordable housing is high in industrial development areas. Often traditional housing solutions are either unavailable or unaffordable for the average worker. RV parks offer an affordable, flexible, and comfortable option. They provide workers with a private space and provide all the necessities of a home.

People are now free from the constraints of a fixed location, allowing them to explore new destinations while maintaining their professional commitments. This shift has led to a growing number of people embracing the RV lifestyle, using it as an opportunity to combine work with travel. As the trend of remote work becomes more entrenched, the demand for RV parks is likely to see a sustained increase.

Modern consumers are increasingly valuing experiences over possessions, and the RV lifestyle aligns perfectly with this cultural shift. RV parks offer a unique blend of adventure and community, providing residents with an opportunity to create lasting memories in a shared space. The experiential nature of RV living positions it as an attractive option for individuals and families seeking a break from conventional housing models.  RV park owners can leverage this trend by offering amenities and facilities that cater to the diverse needs of your guests. From clean and well-maintained campsites, to hiking trails, playgrounds, swimming pools, and much more, the options are endless when it comes to making your park stand out.

Long-term demand growth fosters a strong opportunity for park owners to rate for profitability, add fresh amenities, and expand facilities for decades creating an ideal investing environment for those seeking steady, long-term income with stable re-sale value down the road.

Economic Factors Driving Investment

Beyond lifestyle trends, several economic factors contribute to making 2024 an opportune time for real estate investors to focus on RV parks.

The cost of living in traditional housing markets has been a concern for many individuals and families. RV living provides a more affordable alternative, allowing people to enjoy homeownership without the high costs associated with traditional real estate. This affordability factor is likely to drive demand for RV parks, especially among those looking to downsize or simplify their living expenses.

Industrial development areas (IDA’s) are an often-overlooked area for RV Park development. Savvy investors know better. While RV lifestyle enthusiasts get the headlines, RV Parks renting to contractors, vendors or people working in an IDA get the benefit of low turnover from long-term occupancy. And, many IDA’s are built in areas with significant housing shortages such as the Mid America Industrial Park in Mayes County, Oklahoma.

An RV park’s location plays a crucial role in attracting customers. RV enthusiasts are always on the lookout for convenient locations that are close to popular destinations. When it comes to IDAs, RV parks can benefit from their proximity to these areas. With many industrial businesses situated close by, RV park owners can market their parks as being a convenient place to stay for business travelers. Moreover, RV parks situated close to IDAs can serve as a home base for contractors, vendors and even new employees that are unable to find local housing.

In order to attract customers, it is important for an RV park to offer amenities that matter to them. For instance, RV travelers usually look for amenities that make their stay comfortable, such as laundry facilities, showers, and electrical hookups. However, RV parks situated close to IDAs can offer additional amenities that cater to business travelers. Examples of such amenities include high-speed internet, conference rooms, and even on-site offices. By offering these amenities, RV park owners can increase their occupancy rates by attracting business travelers who need a comfortable yet functional space to work from.

Another way for RV park owners to leverage IDAs is by forming partnerships and collaborations with local businesses. For instance, RV parks can collaborate with restaurants, cafes, and other businesses in the IDA to offer discounts and promotions to their customers. Such collaborations not only benefit RV park customers, but also help local businesses by increasing foot traffic and revenue.

Marketing and promotion play a key role in attracting customers to any business, and RV parks are no exception. RV park owners situated close to IDAs can leverage this proximity by marketing themselves as a convenient and functional place for business travelers to stay. This can be done through targeted digital marketing campaigns, local advertising, and even flyers at businesses in the IDA. By increasing their visibility to potential customers, RV park owners can attract more business travelers and increase their revenue.

Finally, RV park owners can leverage IDAs by upselling and cross-selling their services. For example, an RV park owner can offer special packages to business travelers that include shuttle services to and from the IDA, as well as on-site workspaces and high-speed internet. These added services not only increase revenue for the RV park owner, but also offer convenience to the business traveler.

Potential for Passive Income

Investing in an RV park offers a unique avenue for generating passive income. And, RV parks are a relatively low-maintenance investment. Unlike apartment buildings or commercial properties, RV parks require minimal upkeep and repairs. Tenants bring their own homes (RVs) and are responsible for maintaining them. Basic facilities such as electricity and water hookups are provided by the park owner, but beyond that, the maintenance requirements are relatively minimal. This translates to lower costs for the investor and greater ease of management.

Demand for quality RV park spaces is on the rise providing investors with a reliable source of revenue while benefiting from the RV living growth.

The RV Park Association quantifies passive income generation by tracking RevPAR. RevPAR is calculated by multiplying the average daily rate by the occupancy rate. For example, if an RV park has an ADR of $40 and an occupancy rate of 50%, the RevPAR would be $20. This means that, on average, each site in the park is generating $20 per day in revenue.

Investors can use this data to evaluate the potential passive income generation of an RV park investment. By looking at the ADR and occupancy rate of a park, an investor can estimate the potential income from each site and determine the overall income potential of the park.

While RevPAR is an important metric to consider when evaluating an RV park investment, it’s not the only factor to consider. Investors should also consider factors such as the location of the park, the condition of the facilities, and the level of competition in the area. At a minimum, investors should conduct thorough due diligence that includes a financial review and a site visit.

Diversify RV Park income streams by offering additional guest services. This can be anything from food and beverage sales to retail shops, hi-speed vs standard wifi or laundry services. Maximize income and build steady revenue streams that are not dependent on campsite rentals alone.

Partnerships are vital. Given that a large percentage of your guests will be travelers, it’s essential to explore partnerships with travel-related businesses, such as tour operators, rental car companies and more. These partnerships can help you attract more visitors to your park, providing a win-win situation for all parties involved. Additionally, partnering with these businesses can lead to discounted rates for your guests, which will help to strengthen your customer relations.

Infrastructure Developments and Accessibility

Because of universal RV industry growth, significant infrastructure developments and improvements are underway that contribute to increased accessibility and enhancing the overall appeal of RV parks.

Road networks are expanding after years of neglect. This facilitates easier travel for RV enthusiasts, making it more enticing for them to explore different regions. Enhanced road connectivity contributes to the attractiveness of RV parks as viable living options, especially in areas with scenic beauty and recreational attractions.

Advancements in technology have transformed the RV park experience creating appeal to broader audiences. Smart amenities, online booking systems, and connectivity options have become essential features for modern RV parks. Investors looking to capitalize on the 2024 opportunity can differentiate their offerings by incorporating these technological innovations, providing a seamless and enhanced experience for residents.

Environmental Sustainability and Green Initiatives

The growing emphasis on environmental sustainability is reshaping consumer preferences and influencing investment decisions. RV parks, when designed and managed with eco-friendly practices in mind, align with the increasing demand for environmentally conscious living.

Investors looking to maximize the appeal of their RV parks in 2024 should consider incorporating sustainable design elements and practices. From energy-efficient infrastructure to waste reduction initiatives, environmentally conscious RV parks not only attract a growing segment of environmentally aware consumers but also contribute to the overall appeal of the investment.

Appealing to eco-conscious consumers is smart business. The RV lifestyle allows individuals to connect with nature and minimize their ecological footprint. RV parks situated in scenic and environmentally rich locations have a unique advantage, attracting those who prioritize sustainable living. Investors who position their RV parks as eco-friendly destinations can tap into a market segment that values environmental responsibility.

Regulatory Environment and Zoning Opportunities

The regulatory landscape plays a crucial role in the success of real estate investments. Understanding the regulatory environment and zoning opportunities is essential for investors looking to capitalize on the RV park trend in 2024.

Zoning flexibility for RV Parks is a priority for some municipalities. Investors should explore regions with zoning regulations that are favorable to RV parks. Some areas may have restrictions on the development of traditional housing but are more lenient when it comes to RV parks. Identifying locations with zoning flexibility can provide investors with a competitive advantage and streamline the development process.

Regulatory support for tourism by local and regional governments can be leveraged in the form of  RV park development incentives. Investors should keep an eye on regions where authorities actively promote tourism-related projects, as this can translate into a more conducive environment for RV park investments.

Mitigating Risks and Challenges

While the promise of opportunity for real estate investors in RV parks is obvious, it is crucial to be aware of potential risks and challenges.

As the popularity of the RV lifestyle grows, some markets may become saturated with RV parks. Investors should conduct thorough market research to identify underserved areas or locations with untapped potential. Differentiating the RV park through unique amenities or services can help mitigate the impact of market saturation.

The global economy is subject to fluctuations and uncertainties that can impact the real estate market. Investors should stay informed about economic trends, interest rates, and other factors that could influence the demand for RV living. Diversifying investment portfolios and maintaining financial flexibility are essential strategies to navigate economic uncertainties.

Conclusion

In conclusion, 2024 presents a unique and opportune moment for real estate investors to delve into the RV park sector. The confluence of lifestyle trends, economic factors, infrastructure developments, environmental consciousness, and a supportive regulatory environment make this year a ripe opportunity for those seeking to capitalize on the growing interest in the RV lifestyle.

Investors should approach this opportunity with a strategic mindset, conducting thorough market research, understanding local regulations, performing significant due diligence, have a good understanding of the industry and be confident in a full understanding of the risks. By embracing the RV park trend in 2024, real estate investors can position themselves at the forefront of a burgeoning market, reaping the rewards of a dynamic and evolving sector.

ABOUT CJ REAL ESTATE: 

CJ Real Estate is a full-service brokerage helping people across Oklahoma, Arkansas, Missouri and Kansas buy and sell residential, lake, land, ranch and commercial real estate with confidence.

 

MEDIA CONTACT:

Ronn Cunningham

1.918.550.8122

Info@CJ-RE.com

 

SOURCE: Cunningham-Johnson Real Estate