Ralph Cramden wrote:
westernrvparkowner wrote:
Here's your barriers to entry if you own the land.
1. Permitting, plan on 2 years and $50,000 for engineering reports and environmental impact studies.
2. Construction will take a year and cost +/- $15,000 per site (roads, pads, utilities and landscaping).
3. Add another $100,000 plus for office, restroom and common facilities such as laundry basic and recreation like a goofy golf course and playground. (no pool, that would add $75,000)
4. After those three years, it will take at least 3 more years to build business. Your new business will have no web presence, no repeat business, no reviews, it will not be in any of the guidebooks and won't be shown on any GPS.
5. Unless you heard voices from above like Kevin Costner, you won't know for sure that "if you build it, they will come"
So you will be spending, rather than collecting for six years. Better have a long investment horizon and a whole lot of confidence you are doing the right thing. Building a new park can be profitable, but it can also be a money pit with no way out.
I think your numbers are on the extreme low side. (30+ years of commercial/Industrial construction and land development under my belt) They may work in Montana, here in South Central/Western PA you would not even be close on item #1. If you went to NY and other New Englad states start doubling stuff. Here you would need 70 plans before you could even make the applications for approvals, and I won't even go down the environmental or other roads that involve Fed EPA/State and County DEP's/Depts of transportation/ Conservation districts/ you name it, and if your not anywhere near public sewage get ready, even if its available and has excess capacity get ready with the fat checkbook.
Even a small, basic treatment plant capable of supporting 100 sites would run close to a million bucks, and possibly substantially more than that. The permitting process for one is even more involved than mentioned above, Plus your going to need an employed certified operator to run it, or a contract with a company to do so.
Add to that you would have every land owner / resident within 25 miles against it at public hearings and such.
I am talking rural PA, not anywhere near large urban areas. Get near those, add money.
Every privately owned RV park or Campground I know of is/was family owned and has been in existence for many years, even the ones now owned by Resort managing companies. They were all developed when putting in such a thing involved walking into a county office and throwing down a few bucks.
I'd guess investment horizon as you call it would be 20+ years.
And to top it all off you're going to be closed from November to April.
Personally, I think you are right, it would cost more. However, the premise is the land is already owned. My numbers would be for a relatively bare bones park with the idea of getting up and running. Also, it would have to be a somewhat rural area (cheaper costs and relatively less hurdles) because if you owned 5 acres in Manhattan NY, rather than Manhattan, KS you would never be considering building a RV park. There is a reason RV sales are soaring and there are very few RV parks being built. And you have hit upon many of them.
