There’s a good chance longtime RVers will see many new faces when they check into their favorite campgrounds this summer. Campground owners are handing over the keys.
Many campgrounds—just like houses—have been selling well above asking prices and sparking bidding wars among potential new owners. Seasoned campground owners are pulling the plug, cashing out, and heading to retirement or other business opportunities.
Join the campground-purchasing fray?
So, should you sell your house, cash out your retirement accounts, and join the campground-purchasing fray? Many individuals are doing just that, even if they must compete with big corporations and outside investment groups.
While campground prices may be beginning to stabilize, it’s still more of a seller’s market than a buyer’s market.”
Mark Whitworth, president and associate broker of Parks and Places, recently told the RV Industry Association that while his firm has sold more than 150 parks in the past 12 years, it has seen the rate of sales increase to 33 campgrounds in 2021 alone. The company already has 13 more ready to close in 2022.
“I’ve never seen a market like this,” Whitworth said. “Just like in home sales, everyone wants to sell while the market is hot. But we’re still seeing a lot more buyers than sellers. For properties that are priced right and are making money, sellers are getting top dollar.”
Mom-and-pop campground owners
Some RVers fear that most new buyers are either faceless corporations or private investment firms, but that isn’t always the case. Whitworth said there are still smaller “mom-and-pop” wanna-be campground operators out there ready to enter the market. Larry Brownfield, Assistant Vice President of Franchise Development Services for Kampgrounds of America Inc., agrees.
“We still are seeing strong interest from the traditional buyer, which is typically a family-based business seeking to purchase a single unit and manage the day-to-day operations,” said Brownfield. “At KOA’s most recent buyer’s workshop held in April, most attendees could be described as fitting into this category. At our ownakoa.com website, the traffic is up again over last year and we receive numerous requests for information from the traditional (family) buyer.”
KOA has been conducting Buyer’s Workshops for potential new campground owners since 1979. The workshops have had more than 200 attendees since 2020. The next workshop is set for Oct. 8-9 at the Fort Collins, Colorado, KOA.
Yet while interest from traditional mom-and-pop owners remains high, Whitworth and KOA’s Brownfield both said they are also seeing an uptick in larger corporate or investor buyers looking to purchase multiple campgrounds.
“We are certainly seeing a steady increase since about 2018 of those who wish to purchase multiple campgrounds, which traditionally is a corporate buyer or investment group,” said Brownfield. “I will say we have seen an acceleration of this type of buyer over the last couple of years.”
Easy money but a softening market
Buying a campground is considered a good risk for many lenders. Running a campground is far from easy, but it essentially involves renting a slightly improved piece of land. Banks and other lending institutions see the wisdom of loaning money to campground buyers entering a very hot market because the owner’s main asset—the land—continues to rise dramatically in value at the same time owners can realize up to 20% profit margins through rate management.
Brownfield said while he is still seeing campgrounds being added to the “for sale” inventory, he is beginning to sense a softening of the market. He said Cathy Reinard, a realtor specializing in RV park and campground resales and the designated realtor for the Own A KOA Resale Program, is reporting that the market currently isn’t as strong for sellers as it has been. “While campground prices may be beginning to stabilize, it’s still more of a seller’s market than a buyer’s market,” Brownfield said.
“What Cathy is seeing is buyers offering less money than last year for similar income opportunities, but also noted that she continues to work with a lot of eager buyers,” Brownfield said.
