Assuming this is a business and not a hobby, what is your business plan. I highly recommend taking as much emotion out of the process and treat as a cold heartless business deal. Assume the worst and be pleasantly surprised if you do better.
Assuming you put in $3million for 100 sites to get going:
- Let's assume a 30% occupany (breaking out long term makes a lot of sense and getting a market assessment from similar parks would be better) at $30/night.
That will gross you about $325kyr but that's gross, not profit. You need to subtract all the costs to run the place (below are some guesses, fill in more accurate info as you can obtain it):
- Electricity: $2k/month or $24k/yr
- Water/Sewer: $4k/yr
- Property tax: $35k/yr
- Insurance: $15k
- 2 equivalent full time staff (might be 4 part time or seasonal): $100k
- Savings for capital improvements and major maintenance: $50k
That leaves about $100k but ignores you and your wife's time which will likely be near full time. So you basically bought two $50k/yr jobs with $3million.
By contrast, if you just went out and got two jobs making $25k/yr each and took that $3million and invested it, you would only need to make 1.7% to do just as well and you wouldn't have all the complications, hassle and risk.
Now I only spent 10 minutes running thru this so some of my numbers are probably off but unless you can pay yourself a decent salary after expenses and still have a return on the $3million that beats other investment returns, it's not a good deal.
Now if you've simply done well, the $3mil isn't critical to your finances and you dream of running an RV park...go for it.
