With the rise in RV and mobile home living, investing in RV lots has become an increasingly popular way to profit in real estate. RV lots provide a place for RV and mobile home owners to park their homes long-term and connect to utilities like water, sewer and electricity. For investors, RV lots can generate steady rental income with relatively low maintenance costs compared to other rental properties. However, as with any real estate venture, investing in RV lots requires research, capital and smart management. There are pros and cons to weigh when considering RV lots as an investment.
Evaluate location and amenities to maximize occupancy and rent
One of the most important factors when investing in RV lots is choosing the right location. Look for areas near major highways, tourist destinations and metro areas that are attractive to RV/mobile home owners. Parks with amenities like pools, clubhouses and laundry facilities can also help attract tenants and justify higher rental rates. Drive through potential parks and chat with current tenants to get a feel for the location. Avoid flood zones, remote areas and parks with high crime or rundown facilities.
Understand costs for lot improvements, utilities and maintenance
While RV lots don’t require major renovations like traditional rentals, there are still ongoing costs to factor in. Assess what improvements like gravel pads, utility hookups, landscaping or storage sheds may be needed upfront to make the lots rent-ready. Account for recurring utility expenses if not separately metered. Also budget for general maintenance like mowing, repairs, insurance and property taxes. Build a financial model with conservative rent projections and high cost estimates to ensure positive cash flow.
Research regulations, zoning laws and ownership considerations
RV parks involve more complex ownership and regulatory issues than traditional properties. Study up on local zoning laws, permits, lot size requirements and safety codes for RV parks. Also determine if the lots can be owned individually or if the entire park must be bought. Look into the park rules and how much control owners have over management, fees and rents. For fractional lot investments, vet the sponsor company thoroughly first.
Manage tenant screening, leases and rent collections vigilantly
The key to maximizing returns with RV lot investments is attracting quality tenants and rigorously managing leases. Require rental applications, credit checks and background screening to avoid problem renters. Use detailed lease agreements outlining rules, rents, utility costs and maintenance responsibilities. Charge security deposits and stick to firm late fee policies. Oversee all rents and collections closely, and follow procedures promptly to deal with evictions if necessary.
Develop exit strategies for selling lots individually or the entire park
It’s important to think about viable exit strategies when investing in RV lots. Individual lots can be sold for a profit if the market is strong. Or investors may look to sell an entire park they own to another investor or management company. Parks with strong occupancy and cash flow are most attractive to buyers. Working with brokers experienced in marketing and selling RV parks can help investors get the best sale price.
RV lots can generate stable income streams if purchased in profitable locations and managed wisely. But thorough research and financial planning are needed to account for all costs and responsibilities associated with owning RV lot rentals. With smart due diligence and active oversight, RV lots can ultimately prove to be a lucrative real estate investment niche.