RV Park Showcase: The Wild Horse RV Park
Wild Horse RV Park is a great example of how an RV Park with minimal amenities and small lots can still be very successful, resulting in a net profit of around $4 million. Located in Big Arm, Montana, it is about a mile from Flathead Lake, and 11 minutes from the nearest town, Polson. This park only opened in 2021, and focuses entirely on the “Condo-ization” model of RV Parks. In other words, this park does not allow any renting of lots, they simply subdivide the lots and sell them directly to their customers. They have sold 12 lots already, which were quickly sold out soon after opening. They are currently building another 48 more, and are opening the park in phases.
Compared to other parks that are selling their lots, this park is unusual in both their lot sizes and amenities. They are 4,500 square ft, which is significantly smaller than a regular city house lot. Lots in tightly packed RV Parks can be as small as 1,100 square ft, but this is unusually small when selling the lots. In addition, the amenities are minimal, cost-wise. There is no clubhouse, lodge, or trees. There is a one acre common area, which includes pickleball, horseshoes, a barbecue area, and a small gazebo. These are all relatively inexpensive amenities, which helped keep the development costs down. They are fairly restrictive in the types of vehicles allowed. The only allow RVs, and do not accept any Tiny Homes or Park Models allowed. This significantly cuts down on their potential customer base, but these minimal amenities and restrictions on their customers don’t seem to dampen their ability to sell lots.
The most impressive part of this park is the prices they are able to command for these lots. These small, restricted lots are selling for $125-135K! Corner lots sell for even more. That’s more than the typical city lot in a nearby urban area like Polson or Missoula. These RV lots are selling out as fast as they can build them, and are currently pre-selling the next phase. You can see a map of their layout and phases below.
Part of the reason for the high prices of RV lots is that the Wild Horse RV Park allows for year round living. This is relatively unusual, as many of these types of RV Parks focus on vacationers, and are closed for roughly half of the year. The park recommends the heat taping of water faucets, as well as the use of RV skirts during the winter. In addition, to keep the RV pipes functioning, they recommend the heating of the underbelly of RVs. This ability to live year-round is a significant benefit to the lot owners, as these lots can be used as residences. Since seasonal RV Parks only allow residents to live in the lots for six months of the year, they can only be used for seasonal living or vacationing. Since the area is experiencing a serious housing shortage, the ability to live in the lots year round is a major benefit. As far as additional costs, the HOA for the park is $675 a year, taxes are $550 per year, and there is a charge for $420 per year for water.
With lot sales at such a high price, there is a substantial amount of profit for a park like this. The gross profit of 60 lots at $135K per lot is $8.1 million. Since this park was fairly minimal on amenities, and the land was flat, significant construction or leveling of the land was unnecessary. As a result, we can assume that their development costs were within the average costs of $30-50K per lot, which is the industry standard. To use the upper estimate of $50K, this works out to a development cost of $3 million. Even if we assume that they construction went 33% over budget, and round up the development costs to $4 million, that’s still a profit of $4 million. Not bad for a small park! Their nearest “Condo-ization” competitor is Shyrock RV Park, which is developing 300 lots. With a larger scale like that, their profits are significantly higher.
This deep dive into the numbers should give you a better idea of the profit potential of RV Parks, especially those that follow the “Condo-ization” model of selling off individual lots. These types of parks are growing in popularity, as the nationwide shortage of RV Parks has led RV owners to have significant issues with booking lots. Many RV owners need to book lots months in advance, giving them very little flexibility, which is one of the reasons they bought an RV. Every RV owner has had the experience of showing up to their reserved spot and finding it crowded, tiny, and noisy. This explains the growing interest in buying an RV lot, as it ensures they always have a place to stay, and a consistent experience.
The Upslope Group is focused on building RV Parks that are a win-win-win solution for our investors, our communities, and our residents. These lots can be occupied by Tiny Homes, Park Models, or RVs, giving our buyers a variety of options. Better yet, we can choose to sell or rent the lots, to match the current demand in the market.
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