Changing over the park to RV rentals?

mobile home university
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OK… here is a question.
I am looking closely at a park that has about 14 of it’s 40 lots now converted to RV sites. They claim they only rent to long-term renters. The rest are all single-wides of varying condition and age. Lots all rent for $200 each. Does not appear to be in flood zone on first look (will learn more in diligence phase). Rents appear to be at top of market level.

Question: Other than the obvious fact that they can move on a moments notice, what else would be the problem ?

I am told the current owner bought the property and discovered he had many tear-downs, so started removing them, and bringing in the RV’s instead. I’m a little cautious about this change-up in home styles.
What’s the trap here?

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I am working on doing the same thing – opening up to RVs.

I have 26 vacant lots. My goal is to fill them with owner occupied homes. But, obviously it will take a long time to fill them all. So, in the mean time, why not get some money out of some of them with RVs. I can beat the prices in the RV parks around my parks and still bring in more then if a home is there. I’ve put together a simple website for each of my parks for the RV space rentals and once I get some hookup installed, I will link it to Google Maps.

I don’t have daily rates on the web site, just 2 weeks and monthly.

The objection Frank gave to having RVs at the boot camp was that the managers will be stealing from you with short term RVers. The idea is that your manager will be pocking the cash from over-nighters and you will never be the wiser. But that problem has been solved by the technology of Smart Meters. I will have the electricity for the lots with RV hookups in my name which will allow me to check online which days someone is drawing off of them. The manager will know that part of the monthly accounting is matching up the lot billing with the daily electrical usage.

Anyway, I would love to hear about your experience if any of you have tried this in your parks.

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Randy_CA… I like some of your suggestions, such as 2-wk minimums, and the Smart Meters. Very shrewd! I should look into the Smart Meters for certain…
I was told that RV’s must have a 50-amp box, and thus must be changed out from the MH version of 200 amp. Is this correct?

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I don’t know yet about how much it costs to have a RV hookup installed. It can’t be that bad. A few of my vacant lots already have RV hookups along with the MH hookups, so it is a matter of adding a special RV plug to the box and not replacing the MH hookups. I should make some call to get the numbers.

The smart meters are what utility companies are using to read the meter remotely. I just sold an out of town theater I owned that I had some guys running and renting out weddings and quinceaneras. I could keep an eye on what was going on just by looking at my account’s daily electrical usage online on the Southern Edison website. Sweet.

CraigsList doesn’t have a category for RV parks but I am guessing that a lot of RVers just go to Google Maps – which is free and all you need is a $30 website. We shall see how that works out.

It seems to me to be a no brainer – sure, having a MH in place is better then a RV, but until you can fill up your lots with MHs, why would you turn up your nose at the income you could be getting from RVs?

Why has it taken me three years to realize this? Jeesh.

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I found an almost empty MHP that I was having trouble getting the numbers to work. Gave the deal over to my Dad who turned it into a long term RV park. We changed out the electrical and cleaned up the sites and he is making some awesome money. He kept the RV lots as large as the original MH lots and the residents love it. Extra space, yards, ample parking. He has a list of people waiting to get in to live full time. Two snow birds are paying him the lot rent to keep the spaces open for them when they return. Space rents are $150 more per month than if they were MHP spaces. So proud of him… he may not get around as well as when he was younger but he is wicked smart. Just an awesome deal…

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Sounds like Florida is an no-brainer for RV rentals, but does anyone else have any experience or ideas about RV lots working better or worse in in non-vacation states?

in other words, where would RV lots NOT work or not work as well?

Thanks in advance!

(Randy, great idea about the smart meters verification!)

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I had done some RV’ing with the family last year through the winter in TX and seemed like a good chunk of the parks we visited in TX ( between east TX, Austin, Houston, Dallas , San Antonio metros ) seemed to have good occupancy. When you looked at them also, seemed to be some longer term tenants. I think if your city will allow RVs and you have the pads to take advantage of it, i would.

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In RV park, location is everything. Is the park near a major highway or in a resort area? If not, you may have difficulty filling the lot. The cost to install a pedestal is around $2 - 4K, depending on who does the work.

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You don’t need a pedestal, you just need an RV outlet on the MH pedestal.

This 50 amp one from Home Depot costs 27 bucks.

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Thanks for clearing that up, Randy!

What about costs for RV utilities other than electric?

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I have been considering converting some empty spaces to long term RV also. In the Mountain West, there are a lot of people who full time in a 5th wheel etc. More and More I see RV’s with skirting in parks. A Monthly RV Rental in our neck of the woods is $500, Mobile Home Park rents are between 250-350. I understand that the business model for mobile home parks, with tenant owned mobiles, is ideal. However, if I can move in a tenant owned RV, vs. rehabbing a ridiculously overpriced single wide, I find it hard to not go with the RV. Maybe I’m missing something?

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JoelE,

For water, I believe they need to hook up to a garden spigot, which all my lots already have, and I guess all of your’s also have.

For sewer, they need to drop a line down your sewer pipe. I don’t know the details – I really need to take a trip to a RV center and poke around and ask a lot of question. I have never had any interest in RVing and know next to nothing about it. So there may be some kind of coupling fitting needed but if so, it can’t cost much.

As for cable hookup – I am not going to offer that, unless there is some very low cost option, which I doubt. I am going for the low hanging fruit – the construction worker who is going to be in the area for 6 months and wants the cheapest, no frills option.

Do they offer cable at State Parks? I don’t even know that.

Coguy,

“Maybe I’m missing something?” That is what I’ve been asking myself. It seems like such a no brainer, once you get thinking about it – RVs may not be ideal, but they sure a lot better than vacant lots just sitting there until you can reach the ideal of 100% lots filled with owner occupied MHs.

The reason I started posting about this is to see if anyone out there knew the “missing something.” I have not heard it yet. And once you realize the objection of dishonest managers stealing from you, is not longer an issue, now that utility companies have switched over to Smart Meters, it seems like it is time to start pulling things together; especially after reading Propboy40’s post.

**MY EXPERIENCE IN THE RV BUSINESS SO FAR**

As it turns out I have already been in the RV business.

And I hardly even noticed it.

I own a park about a mile from Louis and Clark Lake, which is a big recreational area in south east South Dakota. There are RV parks all over the place around there. When I bought my park 3 years ago there was a corn field next door. Now there is a RV park where the corn field was which is filled with 78 RV’s on an annual lease.

But I have never had an RV in that park (that is going to change this summer.)

I have another park about 20 minutes West of Lincoln, NE in a little town with not much going on that would be attractive to vacationers. But that is were I had an RV. It was a construction worker who was in the park for about a 18 months. He came to the park and talked my manager into hooking him up. When my manger told me about it I did not think much about it, thinking it was a freak situation that would only last a month or two, but in the end it put about $3,000 in my pocket. When the guy moved out about a month ago, I asked an old timer in the park about RVs and he told me that back before the guys I bought the park from had it (for just a few years) there were always RVs in the park.

Wow that was the big news that put me on this path –

So maybe you don’t need to be in some big resort area to be getting RV revenue. And maybe you don’t need a club house, pool and play area. And maybe having a mobile home with a motor in it, is not forbidden in my parks.

SO WHAT DO YOU NEED?

You need to have at least one vacant lot with the RV plug on the pedestal, and whatever is needed for water and sewer. I am guessing this will cost less than $200.

A website asking for the business hooked up to Google Maps. And while you are at it, clean up your Google Maps business listing so it looks decent. I made my own and already have a GoDaddy site (which pays for the hosting) so it only cost me about $20. But if you can’t do it yourself, it might set you back $300 or so.

Some kind of contract. And having thought through the management system and policies.

Can you guys think of anything else?

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We are looking at a park that has 7 RV’s in it, the Manager let them come in to fill the lots, doesn’t seem like a bad deal. We are full time RVer’s and some RV’s have 30 amp service and some have 50 amp (they make a converter that looks like a short industrial extension cord). RV’s can easily hook into your sewer and a water hose is all that’s needed (unless it freezes).

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RVer’s use a flex sewer hose, usually it will hook up to the ABS sewer pipe, it comes with different adaptors but we have 3" opening at our park.

Our RV park started out as seasonal, but we are converting to permanents, usually month-to-month. There are also park models on annual leases which is similar to mobile homes, but just with a small footprint (<400sf).

You will need to have a reservation system, hopefully online, since guests want to reserve a stay in advance. This process is fairly labor intensive, since you will need someone with good customer service skills and manage a cash drawer.

Randy, thanks for the pointer on RV plug on the pedestal!

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The changing over the park to RV rentals is a major topic to discuss here and there are lot of RV sites but here is amazing website to find RV Rental sites you can click to open.

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I have a mix of RVs and MHs in my park (POHs and TOHs). My park was mostly an RV park when I got it and I have converted all the lots possible over to MH lots. I still have approx. 14 lots that are RV lots and will stay as such because they are too small to install a MH on. I am also a Certified RV tech and we had an RV parts store on the park for many years. Two different businesses for the most part , but they can be combined.

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Can you tell us more about the decision to convert? There are definitely some gems out there if you buy a distressed RV Park and convert to a MH Park…assuming allowed by the city.

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Factors in my decision… I prefer 12 months of steady money. Simple as that. RV site rentals are not as stable, take more management and I think are less attractive to buyers should I ever sell. Forget renting an RV itself should I need to go that route. Most people do not know how to live in an RV properly and that can destroy them quickly.
There are a lot of considerations involved in deciding which route you want your business model to take you. I will say the education I had from the school of real life was priceless! Lol

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We have been renovating vintage RV’s and renting them with good results. Latest was a 1984 Fleetwood Avion currently renting for $675 per month. You’re right though about finding the “right renter.” We have spent a good bit of time educating the tenant how + when to dump the grey and blackwater, switch propane tanks. But otherwise no real complaints. These have new appliances, plumbing, etc so they are fairly dummyproof other than the aforementioned.

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I love doing that stuff but I might switch out the tank systems and go with direct plumbing if I ever go that route. Same with RV refrigerators to regular apartment sized ones. If the RV is going to be stationary… I would prefer that idea.