Buying an Existing Campground or RV Park.
Many people will decide that it is easier to purchase an existing park rather than going through all of the hoops required to build a new park. This is entirely a personal decision and to a certain degree depends upon your strengths and background. If you are used to developing property and construction projects don’t bother you then you can usually build a park for less money than you can purchase one. On the other hand most financial institutions don’t understand the campground business so it is a little easier to obtain financing for a business that is already operating than it is for new construction. Some of the decisions you need to make are:
- Do you prefer to purchase a franchised campground like a KOA or Jellystone or do you want an independent operation?
- What type of park do you want to own and operate?
- Do you want to be open 365 days a year or would you prefer to work hard for nine months and then take the winter off?
- Do you prefer one part of the country to another?
- Are you good with your hands and want a fix-r-upper or do you want a first class operation from the start?
- Do you want a destination type park where your customers stay for a long period of time or do you want an overnight type of facility?
Once these personal lifestyle questions have been answered the work begins. You can expect to review at least one hundred parks on paper and then will have to visit a dozen or so before you find the one that is just right for you. Dont be afraid to ask questions, both of the present owner and the real estate agent handling the sale. Campgrounds for sale can sometimes be found listed with a local real estate agent in the area you desire or you can ask the owner of a park you like if he would consider selling it. However, most campgrounds are sold by a few real estate companies that specialize in the resale of campgrounds or RV Parks. You will find links to some of the better companies at the end of this section. When you think you have found the park of your dreams the biggest question of all comes up.
The other day Homer Staves was talking to a banker who had just started to look at financing the improvements on several campgrounds. He told Homer, One of the biggest problems Im seeing is parks that have had to use their credit cards to finance repairs to the park that they purchased within the last couple of years. All too often the person purchasing an existing campground or RV Park just doesnt know what to look for before they sign the deal. The seller isnt going to volunteer the information and the real estate agent probably doesnt know if anything is wrong. Just a few of the problems Ive seen over the years are:
- Campsites were built on the neighbors property without permission.
- The state health department has given the park two years to modify its sewage treatment facility.
- Last summer the septic system failed from overuse.
- The park has more sites than their zoning or health permits allow.
- Every spring the river floods the park.
- They have extra land and the buyer plans to expand the number of sites but too late he finds out that the extra property is zoned wrong.
- The Forest Service plans to build a modern low priced park one mile away next year.
- The sewage treatment plant is grandfathered in but is about worn out and the new laws will not allow anything except a major new treatment facility which will have to be built within the next five years.
- A new road will be built within three years that will eliminate the best access to the park.
- There was an illegal gasoline storage tank buried on the property that had to be removed and the contaminated soil corrected.
What do I do now?
Once youve purchased the property its too late.
You need to check all of these things and a lot more before you sign the buy
sell agreement and either walk away from the deal or include the cost of correcting
them in the purchase price.
Staves Consulting can be retained to offer you an onsite inspection of the property before you make the purchase. While we cant guarantee that nothing will go wrong, our extensive experience will help you identify potential problems.
Links to campground oriented real estate companies:
- Parks and Places, Inc
- Campground Brokers, Inc
- Darrell Hess and Associates
- Rocky Mountain Properties
- KOA Kampgrounds of America
Links to other useful resources:
Please check out our free report outlining over 20 important things to watch out for when selecting a building site or evaluating a campground for purchase.