Vulcaneer wrote:
As Bill.Satellite wrote seasonal rental is always and option. And does have the advantages he mentions. We also considered that. But we found some disadvantages to that too. So I guess the advice is...It all depends on what you want.
Here is why we steered away from the seasonal idea. First of all the campgrounds we researched were privately owned for profit campgrounds. And they varied quite a lot in their services, and style. But one thing we found was that for the most part the owners, were quite cost conscious. And would avoid spending money for landscaping, and maintenance. They were more interested in taking money out than putting money in. Basically they did the minimum they needed to. We didn't find any seasonal campgrounds that were nice enough that we really wanted to spend six months in.
This is your personal observation, but as scientists like to say, "the plural of anecdote is not data" We are on our second year of snowbirding in Fl. and have stayed in several beautiful, well landscaped and run private rental parks. In several, nicer parks we stayed in, the investment situation was quite the opposite, with owners dumping significant money in, to improve the facilities, every off season.
Location...The private campgrounds were typically very close to major roadways. Don't know why, really. But I suspect it to be because the cost of land was much more reasonable. The ownership campgrounds are generally developed with sales opportunities as the primary strategy. So they are in more desirable locations. Away from heavy travel routes, trains, airports, etc.
Again, you find what you seek. Want a nice seasonal rental location that is a peaceful area, spend the time to find it, there are countless opportunities.
And in the interest in building their revenues, private rental camps tend to squeeze campers in real tight. So the sites can be quite concentrated.
Because they are private campgrounds, you may have neighbors that are short term campers that are on vacation. Generally, not a problem. But sometimes you get what you get. And maybe not the best to your liking. This can happen in an owned site too. But the chances are much less.
Stuck with a jerk for a neighbor? Do you want a rental guest who is staying for week, or the one who just bought the lot next door. No reason to believe that the lot buying crowd is something special, there are jerks everywhere, and you aren't trapped next to one if you rent.
The owned campsite has the advantage of increasing in value if you ever need to liquidate. With a private seasonal campground, you don't have the problem of selling it. But once you spend your money, it is gone.
The is no reason to assume that any real estate will continually increase in value. The great recession proved this beyond question, and a significant portion of the owned resort lot segment took a huge hit. The other issue is liquidity. There are many members on the Escapee forums who end up listing lots for a year, or more, while constantly lowering prices and adding goodies, in an attempt to dump their lots. These lots sometimes sell at a significant discount under the "list price" that the developer is trying to move new lots for.
There are more considerations too. You have to be careful if selecting an ownership site. I will add those in another post.
You are correct, there is a giant consideration that many folks tend to ignore when making these purchases, that being lost opportunity cost, when you remove a significant amount of money from your invested assets, and spend it on a resort lot. There are many scenarios where renting a premium lot on a seasonal, or year round basis, costs roughly the same as paying the taxes, HOA fees and other costs of maintaining an owned lot. By renting, your nest egg continues to grow, and in the last few years at a very healthy amount for most of us. Renters do not own an asset that can be difficult to liquidate, and do not own an asset that may be depreciating, as many have been doing in the last few years. When it comes to ownership, IMHO the best route is to rent in the location you are thinking of buying, for at least a few seasons. Then, if you decide to buy, run the numbers and get a real idea of your true cost to own. Every time I do the math, it fails to add up.
