This post is written to be an aid to Owners of RV Parks and Campgrounds who may be thinking of selling. Buyers should have a look at it as well just to understand how Sellers think (and how they themselves will view it after they buy a park).
First of all, very few sellers come by ownership of an RV Park or Campground accidentally or without some serious effort to acquire, manage it, and grow it!
Most owners spend years searching for a park, negotiating the deal, and closing the sale. Afterwards, they may rebuild, operate and expand their parks. It’s not easy work, but it is a rich payoff duly earned when they do sell and go down the road!
Even if a park is inherited, and the younger family members reap the benefits of their parents who built it, the transition into full-blown ownership and management can be a challenge! So, everyone who owns and runs an RV park comes face to face with all the joys and challenges that go along with it. The joys are obvious: seeing your hard work pay off with a growing business that brings familial wealth, and the freedom to work for yourself instead of punching a time clock are among some of the joys. And then there are the challenges that can be too many to name…but that is for another Post!
So, back to the original subject of this Post:
Assisting sellers who might think they are ready to sell their RV Park. But are you really ready? I cannot help you with the decision of being emotionally ready to sell or not…that is yours alone. What I can tell you is if your PARK is ready to be sold!
When you are considering selling, the first thing that comes to mind is “How much is it worth?” And that is where things get interesting! Some sellers fix an artificial price on their park: “I won’t sell unless I can get $4 Million dollars for it!” My response is: OK, it may be worth that, but we don’t know if we don’t ‘work the numbers’ on it.
At that point, I will ask 8 questions to start that conversation:
- How many spaces/cabins do you have?
- What is your occupancy rate?
- What is your Gross Income?
- What is your Net Income?
- How do you take Reservations?
- What is your Marketing Plan?
- Is your website well branded or does it need improvement?
- Who handles your Social Media Marketing?
The first 4 questions are the basics. These answers will reveal enough information to form some basic calculations as to Today’s Value. But that is only half the job.
The second 4 questions are the Opportunity. Sometimes just uncovering issues within these 4 that can easily be corrected or updated makes ALL the difference! Fix the little things and reap the bigger rewards!
It is within those 4 questions that I can lead RV Park owners to a bigger sales price eventually and an easier sale when they are ready. The answers lie within what we named the “VALUE MATRIX”, a step-by-step plan to build your park’s income, build your ongoing revenue and create a higher sales price when you are ready to sell.
Some people ask: “why not just sell the park now and earn your real estate commission?”
And my response is: “that can be done if that is what the seller wants and needs”
But my other answer is: “why not do the better job for the seller, using what we know how to do, creating a higher revenue for the park, and ultimately a higher sales price in the end?”
What seller (unless they need to sell now) wouldn’t want to take a bit of advice, make minor operating adjustments, enjoy extra income from it now, and get a higher price in the end because the park’s revenue is higher?
“I think most owners would like to do that and appreciate the opportunity to build more value in their park.”
If you are an RV Park or Campground owner, we invite you to get more information about the “VALUE MATRIX” and we look forward to speaking with you in the future and helping your dream of RV Park ownership pay off!
