Column: Best Practices for Preparing to Sell an RV Park

Mike Nissley

Editor’s Note: Michael Nissley, vice chair of the Colliers Manufactured Housing and RV Group, focuses exclusively on MH and RV/Campground transactions in the U.S., Canada, Australia and Europe. Park owners can email [email protected] or [email protected] for more information on his team’s services. You can also learn more at https://www.colliers.com/en/services/manufactured-housing and follow his team on Linkedin https://www.linkedin.com/company/themhrvgroup/.

Over the last few years, investors have recognized RV resorts and campgrounds as a profitable niche real estate investment. People’s interest in experiencing RV life and camping has exploded. Sales of RVs have been at an all-time high over the last seven years (400,000-500,000 sold per year).

But despite the increased number of RVs on the road, new site development has not kept up and thus, demand remains high. This supply-demand imbalance presents a prime investment opportunity, in addition to various other factors such as technology, software, branding, price optimization and more. Owners who are considering selling their RV resort/campground need to better understand the sales process and take the necessary steps to prepare for a sale.

As an RV resort and campground transactions specialist, I understand that the decision to sell is multifaceted. Whether owners are seeking retirement, exploring new career paths or aiming to maximize their business’s value, there are numerous factors to evaluate when preparing to bring a park to market. Owners looking to sell must carefully evaluate their financial organization, enhance their Net Operating Income (NOI) and optimize their operational efficiency. Buyers are not only interested in the property’s physical attributes but also in its financial performance and growth potential. Demonstrating a well-organized financial record, a strong NOI and strategies for further revenue enhancement can significantly attract potential buyers and maximize the selling price.

A crucial step in the transactional journey is conducting thorough underwriting. To maximize the value of your RV resort/campground and attract the most qualified buyers, the first step is to carefully assess the park’s financial records and operations. By diligently evaluating its performance and potential, it lays the foundation for a successful transaction that garners optimal results. To achieve this, it is crucial to ensure that the financials are well-organized, current and accurate. The more historical data available, the smoother the underwriting process becomes. Specialized underwriters are adept at assisting owners through this potentially tedious undertaking. Thanks to modern technology, financial organization has become simpler and more accessible. Organizing and updating bookkeeping methods holds significance not only for owners looking to sell today but also for those considering a sale in the near future.

Additionally, increasing NOI for your RV resort/campground is important before bringing it to market. A higher NOI not only enhances the financial performance of the property but also maximizes its overall value, attracting potential buyers and investors. By implementing strategies to boost revenue streams and carefully managing expenses, owners can demonstrate the park’s profitability and potential for future growth. Prospective buyers are more inclined to invest in a park with a strong NOI, making it a crucial factor in positioning the property for a successful sale.

In situations where an RV resort/campground has recently introduced new amenities, such as a pool or high-speed internet, or expanded its capacity by adding new sites, it may be prudent to wait before listing the park. This allows sufficient time to demonstrate the expected increase in NOI resulting from these enhancements. By showcasing the park’s improved financial performance, owners can position it more strategically in the market, attracting potential buyers who recognize the added value and growth potential of the property.

Conversely, if owners are contemplating making these improvements while also planning to sell the RV resort/campground within a year, it might be more advantageous to proceed with listing the property as it currently stands. This approach allows potential buyers to evaluate the park’s existing features and amenities, offering them the opportunity to envision the property’s potential and make their own improvements according to their goals.

Optimize Operations

Next, optimizing operations prior to selling a park can be important for several reasons. First, it demonstrates to potential buyers that the park is well-managed and has the potential for continued success. By implementing efficient systems, streamlining processes and ensuring excellent customer service, owners can showcase the park’s profitability and its ability to generate a stable income. Second, improving operations can lead to increased NOI, which directly impacts the value of the park. Buyers are more likely to offer higher prices for parks that demonstrate strong financial performance and have the potential for future growth.

Finally, by optimizing operations, owners can identify areas for improvement and address any operational inefficiencies. This not only enhances the park’s attractiveness to buyers but also sets a solid foundation for long-term success for the new owners. In summary, optimizing operations before selling enhances its marketability, increases its value and positions it as a desirable investment opportunity. It is a proactive approach that maximizes the chances of a successful sale.

The process of preparing to sell requires careful consideration and strategic planning. If selling is on the table for you, partnering with a specialized and professional consultant can have the biggest impact on a transaction’s success. Collier’s vertically integrated group, with valuations and advisory, brokerage, underwriting and property marketing all in-house, has witnessed firsthand the impact that thorough preparation has on the success of a sale and the missed opportunities that come from misunderstanding or underestimating these factors.

Though the transaction process may be demanding, the potential rewards make it highly worthwhile. The last several RV resorts/campgrounds we have sold have achieved sale prices of 20-30% over the owner’s expected price due to Collier’s professional underwriting and competitive marketing process.

Source: https://rvbusiness.com/column-best-practices-for-preparing-to-sell-an-rv-park/