What Buyers Look For in a Campground or RV Park

What the buyer is paying for

The starting point is the site count and what kind of sites they are. A park with full hookup pull-through sites for large motorhomes earns differently from one built around tent pads and a few cabins. Buyers ask for a site map and a schedule showing, for every site, the type, the hookups, the nightly, weekly and monthly rate, and how many nights it was booked in each of the last few years.

Occupancy matters, but the shape of it matters more. A park that fills every weekend from Memorial Day to Labor Day and sits empty the rest of the year is a different investment from one with workers, travelers and retirees staying for months. Monthly and seasonal guests pay a lower daily rate and bring steady cash. Transient guests pay more per night and arrive in waves. Buyers want both numbers separated, because their lender will want to know how much income is there in February.

The second thing buyers look at is how the money is made beyond the site rent. Camp store sales, propane, firewood, laundry, rental cabins and golf carts, storage lots for boats and trailers, seasonal activities, and the electric and water charges billed to long-term guests all add to the income. Buyers like extras that carry good margins and need little labor. They are skeptical of extras that exist because one employee loved running them.

What raises or lowers value

Parks sell better when the guest relationship is not in the owner's head. If reservations run through software that holds guest histories, deposits and cancellation records, a buyer can see for themselves what the calendar looked like. If bookings come through a notebook and the owner's memory, the buyer has to take your word for it. Online reviews matter too, and so does the share of guests who rebook before they leave.

Condition is the other half. Buyers walk the park with an eye on electrical pedestals, which wear out and are expensive to replace, as well as roads, drainage, the bathhouse and shower buildings, the pool if there is one, and the septic or sewer connection. A park with a pedestal upgrade in the last few years and a maintenance log to match is easier to price than one where everything works but nobody can say how old it is.

Expansion room can add value. A few undeveloped acres that already carry approval for more sites may be worth something to a buyer who plans to grow, though only if the approvals and the utility capacity are on paper and current. Buyers will not pay for potential they cannot verify, and they will ask to see the permits.

Long-term residents change the picture. Some parks have guests who live on site most of the year. A buyer will want to know how those arrangements are written, how long the guests have stayed, what protections tenants have in your state, and whether the park is meant to serve travelers or residents. Rules vary by state and your attorney confirms what applies.

The records a buyer will ask for

Expect requests for tax returns, monthly profit and loss statements, a balance sheet and a daily or monthly occupancy report from the reservation system. Buyers compare the deposits in your bank account to the revenue in your reports, and the two have to agree. Parks that take cash at the gate, charge sales tax on store items or collect lodging taxes need those filings to line up too.

They will also ask for utility bills for electric, water, sewer and propane, along with any submetering records if you bill guests for usage. Payroll records, seasonal staff schedules and any workers who live on site in exchange for reduced rent or free hookups are common questions. Insurance claims history, including any incidents on the property, goes on the list. So do the contracts for waste removal, internet service, vending and any leased equipment.

Our guide to getting financials ready walks through what clean books look like to a buyer, and a park that has been run mostly on cash needs that work early.

What has to transfer, and the land question

Most parks are sold with the land. In that case the buyer is acquiring real estate, and the value of the dirt, the zoning and the water rights is a large part of the price. Our post on selling a business with real estate attached covers how that works. If the land is leased, the lease is the whole deal, and buyers will want the remaining term and the renewal options spelled out. See the lease is part of the deal for what to expect from the landlord.

Zoning and land use approvals come next. A park often operates under a special use approval, with conditions on the number of sites, setbacks, noise and hours. Some of those approvals stay with the property and some depend on the operator. Buyers also check the water supply, whether it is a well that must be tested or a connection to a municipal system, the wastewater setup, flood zone status and fire access. Health departments inspect bathhouses and pools, and inspection reports from past years are among the first things a buyer will request. An old problem that was fixed is easier to explain than one nobody mentions.

Seasonal staff, vendor agreements and any franchise or membership affiliation with a camping network may need consent from the other side to move to a buyer. Read them before you list, so you know which ones need a phone call.

What tends to sink a sale

The common problems are easy to name. The reservation system shows one number and the bank deposits show another. The water or septic system turns out to be near the end of its life. A permit is held in the name of a prior owner. The lease runs out in a short time. A cluster of long-term guests turns out to have rights that nobody wrote down. The best site manager quits as soon as the sale is public.

Confidentiality helps with that last one. Guests who plan their summer around the park and staff who live on site will worry if they hear the park is for sale. We market a business without naming it, and buyers sign a nondisclosure agreement before they see anything that identifies it. Our post on how we market a business confidentially explains the steps.

Getting the park ready

Start a year before you plan to list so you can show a full season of clean numbers. Move reservations into software if they are not there, tie the reports to the bank, and write the rates for every site type in one place. Fix what a walkthrough would find, including cracked pedestals, soft spots in the road and rusted fixtures in the bathhouse. Get the permits, inspection reports and zoning letters into one binder. Train an on-site manager who can run a weekend without you.

Business Advisors of America starts with a valuation built from your records, prepares the materials a buyer and lender expect and screens buyers for the experience and funding to run a park. The page on selling a campground or RV park shows how we approach this kind of business, and a short call is the next step after that.

This article shares our opinion and general information. It is not legal or tax advice. Always speak with a licensed attorney for legal advice, and a qualified tax professional for tax questions, before you act.