Editor's choice: Lendio business loans
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- 10 types of financing available
- Positive reviews of customer service
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For those who don’t want to rough it in a tent, an RV is the way to go. You can find RV parks and campgrounds in prime locations and vacation spots right around the country. If you’re thinking of buying an RV park, either to manage yourself or as an investment, there are several things you need to consider before signing the contract.
You can finance the purchase of an RV park with a commercial loan that’s secured by the property. However, as these properties are generally seen as specialized security, some lenders may classify them as high-risk investments. That means higher down payments of 25% to 30% of the property’s value.
If you’re buying a lower cost RV park and want to pay for it completely upfront, you may be able to use an unsecured, fixed-term business loan. Lenders often require that you provide evidence of your financial situation, details of your relevant management experience and a business plan that shows revenue and cash flow forecasts.
If you have existing RV parks in your business portfolio, your chances of approval will likely be higher. Your accountant can help you draw up comprehensive business statements that could help improve your chance of approval and get you a decent rate.
What you’ll pay for an RV park or campground varies and can depend on if you buy both the land and the business, buy the business and lease the land or buy the land and start the business from the ground up. Generally speaking, small RV parks in less popular areas could cost as little as $300,000 while the most successful RV parks can cost over $1 million to purchase.
Other considerations may include:
This is far from an exhaustive list. Accurately valuing a business is complicated. Beyond the purchase price of the property and business, determine if you need money for immediate improvements and repairs. With this in mind, consult with your accountant or business advisor to determine a fair price for your RV park.
An RV park is a big investment that takes time, so consider these factors before making your purchase:
If you’re buying an RV park that’s up and running, it could make it that much easier when transitioning owners. But before you decide if it’s a worthwhile purchase, dig into its finances. Consider these points when evaluating a business’s worth:
Buying a campground or RV park can be a solid way to earn a steady income and own a business, but because of the different regulations across states and within counties, you may have a hard time pinning down the right property. Once you’ve built up your savings for a down payment and found a business you want to buy or the land you want to use, you can find a business loan to finance your purchase.
Interested in purchasing a different type of business? Check our guide on business loans to buy existing businesses.
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