Frank has been involved in all facets of the RV Park business as an owner/operator of parks in four different states. His experience includes purchasing and operating over 25 mobile home and RV Parks as an investor, performing "due diligence" on hundreds of other mobile home and RV parks, speaking at mobile home park investing seminars and real estate clubs and telling it like it is! To see more articles written by Frank Rolfe visit RVParkStore.com
When first buy an RV park, you assume that everyone will check in for a night or two, and then be on their way. However, you soon find out that customers’ needs are anything but that simple. Many RV owners intend to stay in one spot for an extended period The reasons include:
Temporary relocation due to working on a project (building a Walmart, etc.)
Staying near a hospital during a surgery and recovery
Permanent tenancy in a RV (primary residence)
Temporary relocation due to winter weather (“snowbirds” that go south in the winter)
Folks who are traveling in their RV but like to stay in one spot during the whole vacation.
Although daily rates of $20 or more look attractive to you in these instances, they don’t look that great to the customer. Especially is you are in a market where a monthly lot rent in a mobile home park goes for $150. As a result, it’s important to have a special rate package just for this unusual but common subset of customers.
If you have mobile homes in your park that are permanent and paying you lot rent, then the fair thing to do is to offer this same rent to the RVs, provided that they will agree to stay for at least a month and set up and pay their own utilities – just like a mobile home customer.
If you do not have any mobile homes in your park, then you are going to have to do some research to find out a fair rent. Call all of the mobile home and RV parks in your market to see what they charge “by the month”. You will have to remain, to stay competitive, in this price range. However, if you have some real additional benefit, such as lake frontage, you can probably go higher according to how desirable your park is. Be sure and ask what utilities are included in the monthly rent – you need to compare apples to apples.
When suggesting that the RV customer move into a “by the month” lot, be sure to use the price as the big driver in your sale. If daily is $20, and monthly is $200, then the RV customer will save $400 per month (minus electricity) by changing over to a monthly situation. This is compelling to almost everyone!
Of course, it is important to leave your most desirable “overnight” lots available, if possible. These lots are what attract new customers. Tell the monthly RV customer that those lots are reserved for true overnighters. Don’t tie up these choice lots on a monthly basis – you will actually lose customers as a result.
What are the benefits of “monthly” RV customers over “daily” to you as park owner?
Stability of cash flow. $20 a day is O.K., if it happens every day. If it only happens for one day every month, then $150 or so looks even better.
Reduced damage. The number one cause of problems in an RV park is what happens when RVs move in or out. That’s when utilities get run over and ruptured, and ruts put in the ground.
Barrier to moving, after a while. If you’ve done a good job, you will just be too “easy” to consider moving to another RV park, even at a lower price. Sometimes on monthly RV, the city will require the tenant to “hardwire” the power service to the home, making it more like a permanent structure than an RV. Plus many RVs skirt their RV over time to improve pipe freezing problems, etc.
There is no better feeling than knowing that you have enough RV park revenues in just the “by the month” customers to pay your bills and note payment. The daily RV side of the business can be the gravy.
So be sure to convert your customer to the appropriate monthly opportunity – before someone else does!
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