Starting a new RV campground...

OP is near enough Nashville to have year-round tourist traffic. And there is a big shortage of sites in that area. There are lots of people on here asking about sites near/in Nashville.

WTP-GC wrote:
It might be expensive, or it might not. It might be difficult in terms or regulation, or it might not. It might be hard to finance, or it might not. Too many unknowns for any one person to suggest affirmatively one way or another. The cost and impact is really dependent upon what you're willing to put into it.

One idea would be to start small. I was looking at a campground just last night on the internet with less than 20 sites, but it appears to stay near capacity for most of the year. And only some of the sites are full hookup and some don't even have water. But there's only 3 other campgrounds in the area that aren't for members only, so perhaps that area is considered under-served as well.

If it were me, though, and I owned a nice piece of land in a heavy RV area, I'd build a storage facility. I feel that's way more bang for your buck right now.

But since this is mostly speculative at this time, I'll mention this. We stay at a particular place that has an extremely ideal location near the beach. There's over 150 sites at this park. They have a full staff, pool, and some other misc facilities. As a business owner, I used my knowledge to come up with some approximate $$ numbers. At 75% capacity year round (though most of the year they're at 100% capacity), the NET profit would be somewhere around $1.5 million. That's taking into consideration all maintenance costs, employee salaries, taxes, etc. Even if I were 50% off on the number, that's still one heck of a profit. Note that this place is very well established and also started at only a fraction of this size.

valhalla360 wrote:

Reality is there is no ideal location. If it was ideal, there would already be a park there. Undeserved areas are typically undeserved for a reason.

This is quite frankly untrue. What you're basically saying is that there's no such thing as an available market. If that were true, then no new businesses would ever be necessary or successful. When Amazon started selling textbooks, it wasn't like that was the easiest or best way to buy textbooks. But over the course of time, they became dominant in that market sector and moved on to bigger and better things. My community has been under-served for years in terms of local retail and eateries. It wasn't because people didn't try to come in and open an establishment, but rather they did so with poor planning. Many came and went, and one might suggest that such businesses were not needed. But those who came and stayed have proved otherwise. It has as much to do with the owner and how its managed as it does with the location (within reason of course).

While starting small sounds like a good idea, it probably will not work unless you already own the property. The economics of building on only fraction of your land investment just won't work. Also, you will be adding significant costs to the final project. It will cost much more to tie into the first phase and upgrade the facilities and infrastructure from the phase than it would be to build it all to begin with.
Underserved markets may be a illusion. Most of us travel during peak times (there is a reason peak season is peak season). An area that is appears underserved to an outside observer may only be underserved for a few days or weeks. It would be economic suicide to build a facility that was only full during the absolute peak usage. If you did, most of the sites would site idle most of the time. You would never make up the construction and land costs of those fallow sites in the few weeks it was truly "peak". You really need to be able to fill sites for multiple months, not multiple weeks. In the example above, a park on the ocean, in warm climes, is an exception to normal parks regarding occupancy. And such a land parcel would cost multiple millions as raw land, they really need that $1.5 million a year to justify not putting condos on that prime property and walking away rich.
If this is something you really want to do, buy a run down park and rejuvenate it. At least the public opposition, governmental permitting, and basic infrastructure will be less of a hurdle. An existing park can be financed, a new one no way unless you have a long, stellar development history with your financial institution. Great credit and a strong net worth isn't enough to get development financing for a park.
Finally, figure on three years for any new park to become anywhere close to occupied after it is opened. Advertising takes time to reach the masses, even with the internet. Organic search results take months to years to become optimized. Paying for hits will eat up a lot of money. With no reviews out there, you will not get as many guests taking a chance on your new property. You will have to budget the fact that positive cash flow won't happen right away. Have sufficient reserves or that nice new park you build will be owned at a discount by a savvy operator like me who will swoop in and gobble it up at a fire sale price.

You biggest hurdle is going to be getting a permit for a multiple use sewer system.

I wouldn't invest one thin dime until I was assured that the county would approve/issue a permit for the sewer system.

They have really clamped down on issuing septic fields and in some instances even septic tanks when associated with numerous open dump lines.

Way too many variables with only one post by the OP although some realistic advice on the permitting and cost. 20 years ago I didn't find ARVC much help, hopefully that's changed.

About the only reason I'd build another CG is for the same reason you see Hunt Public Storage facilities...a short term use of what hopefully will be a prime location in 20+ years OR a way to grandfather in higher residential density for down the road.

A close to the Interstate, automated, no frills, pull through, overnight CG might meet the above goals.

It might be expensive, or it might not. It might be difficult in terms or regulation, or it might not. It might be hard to finance, or it might not. Too many unknowns for any one person to suggest affirmatively one way or another. The cost and impact is really dependent upon what you're willing to put into it.

One idea would be to start small. I was looking at a campground just last night on the internet with less than 20 sites, but it appears to stay near capacity for most of the year. And only some of the sites are full hookup and some don't even have water. But there's only 3 other campgrounds in the area that aren't for members only, so perhaps that area is considered under-served as well.

If it were me, though, and I owned a nice piece of land in a heavy RV area, I'd build a storage facility. I feel that's way more bang for your buck right now.

But since this is mostly speculative at this time, I'll mention this. We stay at a particular place that has an extremely ideal location near the beach. There's over 150 sites at this park. They have a full staff, pool, and some other misc facilities. As a business owner, I used my knowledge to come up with some approximate $$ numbers. At 75% capacity year round (though most of the year they're at 100% capacity), the NET profit would be somewhere around $1.5 million. That's taking into consideration all maintenance costs, employee salaries, taxes, etc. Even if I were 50% off on the number, that's still one heck of a profit. Note that this place is very well established and also started at only a fraction of this size.

valhalla360 wrote:

Reality is there is no ideal location. If it was ideal, there would already be a park there. Undeserved areas are typically undeserved for a reason.

This is quite frankly untrue. What you're basically saying is that there's no such thing as an available market. If that were true, then no new businesses would ever be necessary or successful. When Amazon started selling textbooks, it wasn't like that was the easiest or best way to buy textbooks. But over the course of time, they became dominant in that market sector and moved on to bigger and better things. My community has been under-served for years in terms of local retail and eateries. It wasn't because people didn't try to come in and open an establishment, but rather they did so with poor planning. Many came and went, and one might suggest that such businesses were not needed. But those who came and stayed have proved otherwise. It has as much to do with the owner and how its managed as it does with the location (within reason of course).

If you look at franchise, assume they are lying to you. Their goal is to sell a franchise. This doesn't mean it might not work in the end but be very skeptical. You are probably in love with the idea of opening a park and they know it.

Reality is there is no ideal location. If it was ideal, there would already be a park there. Undeserved areas are typically undeserved for a reason.

Just for kicks, I've run the numbers on parks we've been at and at best, you bought yourself a job. To actually invest a couple million, you would be far better off economically to invest that money and get a separate job.

cooljim wrote:
What would be the best way to go, and what are the benefits and downfalls of starting a newly constructed campground in an underserved area?

Franchise vs. Independent
urban vs. rustic
restrictions vs. inclusions
pets vs. no pets

Thoughts?

We've never based our campground choices on "franchise", it is by internet searching, location, and word of mouth. Actually, we've only stayed in a franchise campground (KOA) once in approaching 20 years of campground camping.

"urban" (meaning near cities?) only if you are near things that are a big tourist draw - otherwise, we always prefer out in the woods.

"restrictions" - assuming you mean more strict rules? - yes. Unfortunately. People just seem to take advantage of everything they can, and always push the line when it comes to rules.

Pets vs no pets - every private campground we've been to allows pets, most state parks we've been to don't allow them. So, you opening a "private" campground, allowing pets will get you much more business at higher rental rates - but, with strict rules. Again, because people always push the line when it comes to rules and being good campers.

Ideally, a fantastic private campground would have BIG sites like so many state parks we've been to, with full (or at least water/electric) hookups, while being near or next to something like a lake or attraction - AND not cost a fortune per night. Like I said, ideally!

Since we don't own or manage a C/G, will keep it short and simple... I agree with Travelon and SDcampowneroperator: Go to ARVC and get ALL the info you can !! Also there are quite a few C/G's that are for sale. I'm sure they would have that info as well. Good Luck and Happy Camping !!

SDcampowneroperator wrote:
attend the ARVC convention in Raliegh, NC in Nov. There you will meet up with industry professionals, franchise and otherwise.
Now is a very good time to build a park, as the gov. parks are not expanding, rv sales outpace availability.
Feature is critical. On a lake? Near a destination? Land available, regulation reasonable? An inner city or an industrial area with housing needs for workers?
Too many ifs to ask here, most rv.net posters are unfamiliar with the tribulations.

See you there? In Raliegh?
Max

This is the ONLY advise you should adhere to for now. Go to ARVC convention in Raleigh, NC in Nov. Gather factual information there then decide your next move.

Travelon

Be careful not to buy a farm next to a smelly cow ranch, or so far from the freeway acess would be difficult.

One place I am thinking of is located at the bottom of a steep hill, 15 miles south of I10 in Banning. It's higher elevation is nice, and spring fed water supply, small man made lake. It has 800 sites, part of Coast to Coast.

Finacing a RV park is another thing. The closer the sights are to each other, the lower wiring and plumbing costs, less voltage loss to the sites. Lower internal pavement costs.

Do you want property near a river? How high above flood stage? The county might have regulaions about buildingd to low elevation near a river, and of course the septic draoin field must be at least 300' from the river, well above it, might require pumping sewage up to it, or to the local city run sewage district.

Being in a city, you probably can tie into city water and sewer, but check the cost in advance of looking for property. In Ramona, CA, a yogart shop wanted to add a triple sink to an existing shopping center. The sewer hookup fee was $54,900. Shocking! The store already had a bathroom. Ramona was expanding their sewer department, and calculated the store as producing 3.3 homes worth of sewage.

You will also need to plan the resort. How many sites? How much pavement? Pool or not? How much grass? Do you plan on buying a place with trees? Perhaps apple trees?

Where will the electric come from? Perhaps a 400 amp servive to the office, two laundry rooms and recreation building.

The Banning park has a 1000 amp 480 volt service, with transfomers around the park, and 50 amp service to each site. You can put 8 sites on a 125 amp 240 volt breaker, with #2 wire. A 200 amp panel can feed about 20 of the 30 amp sites.

If you go over 800 amps with a main panel, you. Musr have a GFI system on the main panel, that can get expensive. Also mosr rual areas do not have three phase power. With a 400 amp single phase panel, you will have 800 amps at 120 volts. With three phase, you would have 1,200 amps at 120 volts.

A 50 amp RV might consume a average of 20 amps at 240 volts, while 30 amp RV'S might average 25 amps at 120 volts on a hot summer day or cold winter night.

You might have a huge electric bill. Many campers say "that is why I paid $35 a night, to use unlimited electricity."

You might be better off buying a RV park. Check with owners of a few parks around the country. See how interested they are in running the park. Cleaning the restrooms, ect. If you see one for sale, lets say $2,000,000. Is it worth it? How much would it cost to build? How much to pay lawyers to get through the planning process? How much for electrical design? Buildings, plumbing, paving, pool, water fountain? Advertizing to find customers?

A apartment building value is about 100 times the monthly income after expences. So a 400 unit building with 3 employees, $1000 a month garbage bill, $2000 landscaping, $2000 bill for irigation water (that is what our 140 unit condo on 5 acres in Garden Grove CA paid in summer monthly) and other expences such as property tax. Say rent is 400,000 a month, tax and other costs are 25,000. So the buildings would be worth about 37,500,000. (The actual value is 92 - 96 times the net income, so would be less). Don't overpay, expecially if the resort has been on the market for a while.

You should enforse a 15 year old RV rule. Older RV'S sometimes are bought by drug abusers to live in. They are not as likely to take good care of a site.