Most people own RVs because they want the comfort of home without putting down some roots. However, whether you own an RV or rent one, you know there are some benefits to having an RV lot. This is particularly true for people who live in their RVs or frequently travel in their RVs.
Over time, renting is more costly than owning, which is why people prefer buying rather than renting. If you’re looking at RV lots for sale, I’ve explored all the pros and cons of lot ownership in this article.
Reasons to Own an Deeded RV Lot
First, let’s see why buying makes more sense than renting. There are both good and bad sides to investing in an RV lot. However, in the past few years, there has been a significant rise in RV lot investment.
Here are some reasons why this is so:
Lot Owners Have More Control
First and foremost, people buy RV lots because they have more control over the space. This is true for any type of real estate ownership. As a lot-owner, you can do whatever you want. If you want to add an outdoor kitchen or landscape, you can do so without worrying about permission from your landlord.
Moreover, if you only use your lot for a few months throughout the year, you can easily rent out the space when you’re not using it to make some money. If you’ve made some renovations (such as an outdoor kitchen), you’ve only increased the value of the lot and can charge more per tenant.
It’s More Practical
In essence, most people buy an RV lot because it’s simply more practical. For example, if you use your RV as a vacation home, it’s cheaper than owning and maintaining a separate vacation property.
Additionally, while some people find RVs attractive for their mobility, others can get tired of the constant travel. Of course, you can always use an RV to take a family road trip, but if you’re tired of constant driving, a simple family camp out in an RV lot may be just as fun.
Consequently, you don’t have to pay for fuel or off-site utilities.
It’s Cheaper in the Long Run
Also, if you buy an RV lot, you don’t have to pay for storage. Depending on how much stuff you have, storage can get very expensive. Having a permanent space for your RV lets you store your belongings on sight.
Moreover, as mentioned above, owning is cheaper than renting in the long-run. For example, the average price for renting in Palm Springs, California is $750 per month. If you rent an RV lot for half a year, the cost becomes approximately $4500.
On the other hand, the average cost for buying a lot in Palm Springs is $2600 per year.
What Is the Cost of RV Lots for Sale?
Many factors determine the cost of an RV lot. They are as follows:
In essence, the cost of buying an RV lot differs from area to area. Some areas (including Palm Springs) are prime vacation spots, making RV lots more expensive. For example, Las Vegas has RV parks that have property prices as high as $200,000.
Las Vegas is highly popular because of its tourist facilities and famous vacation sites.
Moreover, popular RV parks also offer several amenities such as golf courses, sports complexes, gyms, spas, and various dining options, making them more expensive. Not all parks have these, only those that double as resorts.
If you need/want any amenity, look for an RV park that offers it. Amenities also include basic utilities such as electricity, gas, and water. You should invest in a lot with on-site electricity and water supply (rather than having to use portable water tanks and electricity generators.)
Thirdly, most RV lots have fees and taxes imposed on them. These fees have to do with maintenance and range from $50 to $500 per month (depending on the location). Taxes, on the other hand, depend on the value of the land.
Another factor affecting cost is climate. RV parks in harsh climates are cheaper. Some of these parks have lot-prices as low as $10,000. However, buying a cheaper lot with harsh weather conditions isn’t the answer as you won’t be able to utilize the lot as often as you want.
All these things (location, amenities, taxes/fees, and climate) dictate how much an RV lot costs. If you’re looking to invest, find one that meets all your needs. The answer is to find the right balance between these factors according to the area you live in.
Things to Know About Buying an RV Lot
Before you settle on a purchase, what things should you know? Buying an RV lot requires a lot of thinking. We’ve explored what factors affect the cost, which is part of the thinking process. However, what else is there?
To help you out, we’ve made the following checklist. Make sure to look at all of these factors when looking at any property:
- Local Home Owner’s Association (HOA) regulations
- Annual or monthly HOA fees
- Age limit for your RV (if any)
- Size limits for your RV (if any)
- RV type restrictions (either requiring Class A or pull-up trailers)
- Lot time limit (whether it’s available throughout the year or for only part of it)
- Also, the cost of amenities
- Cost of utilities such as electricity, water, gas, sewerage, trash (if available)
- Upgrades needed on the lot (if any)
- Amount of taxes on the property (real estate tax, property tax, other hidden fees)
- Mowing/landscaping fees (if any)
- Other prohibitions such as visitor restrictions (as some parks don’t allow children or pets)
- Speaking of, restrictions for pet owners and pet fees (if any)
Everything on this checklist tells you whether a lot is suitable for you or not. Therefore, carefully go through every step (if applicable). I also recommend hiring a real estate agent to help you filter through your options rather than answer online ads or newspapers.
Pros of Lot Ownership
Now, let’s get to the main event. What are the pros of lot ownership? As mentioned, people buy lots for many practical reasons. It’s easier to make renovations, landscape, and you cut down on storage and fuel costs.
What are the other advantages of lot ownership?
Firstly, if you’re looking for more financial stability, owning an RV lot will help you do that. Most people spend tons of money on their vacation homes. RV lots are not only cheaper, but they’re also easier to rent out, particularly during high seasons.
Even a simple RV lot with limited amenities is sought after in peak camping season. If you’re looking for a way to make year-round cash, you can with strategic investment in developing RV parks.
Camping seasons depend on where you live. For primarily cold climates, peak camping season falls somewhere after August and before December. Peak months are also the most profitable. With a strategic launch, you can rent out your lot when the demand is high and reach profits within your first year.
Overall, owning an RV lot is a very profitable business. In fact, RV parks are the most profitable real estate assets out of all real estate asset types. The average return for owning an RV lot (or two) is 10% to 20%,
Being Your Own Boss
As mentioned, as an owner, you have more control over your property. Consequently, you can do what you want without hesitation (as long as it falls within HOA regulations). If you’re good at management and looking for an entrepreneurial opportunity, owning an RV lot may be a good idea.
Since renting out RV lots is a seasonal business, you have more flexible hours. During peak months, the job will keep you busy, but in the off-season, you have lots of free time to recharge.
With current real estate prices, it’s nearly impossible to buy a house on an average worker’s income. In addition to whatever savings you have, you need to take out loans and mortgages, all of which have set interest rates.
RV lots are a different story. Again, depending on their location, they can be very expensive. However, they’re cheaper than other real estate asset classes. Consequently, RV lots are relatively affordable investments, which multiple generations in your family may utilize and/or expand.
Cons of Lot Ownership
Everything has a downside. RV lot ownership is certainly no exception. If you’re investing your hard-earned money in an RV lot, you need to know the possible downsides to make an informed decision.
Here are the cons of lot ownership:
Trouble With Financing
If you’re buying an RV lot, you’ll find many hidden fees and taxes. This depends on where you are and what state you live in. However, almost all RV lots need to be financed by a bank, but it’s tough to find one willing to do so.
Generally, banks don’t spend resources on financing small properties like RV lots. However, if you make it a priority, you can find an RV park with its bank and financing facilities. This is particularly preferable if you live out of state.
Frequent Utility Costs
Some RV parks and campgrounds don’t offer connectivity to on-ground electricity, water, and gas supply. Consequently, you have to fend for yourself with RV generators, water tanks, and heaters. The cost of running and maintaining these appliances accumulates and becomes very expensive over time.
You constantly need more fuel, water, and gas cylinders on hand. If you run out, it’s very inconvenient for you and your guests. If you’re renting out the space, you’ll need to lower the cost to account for these facilities.
Therefore, you can’t charge tenants what you could for on-ground utilities and maintenance.
No Summers Off
If you’re renting out an RV lot, you’re signing away your vacation time. Peak camping seasons coincide with summertime because everyone is off from work and school. Consequently, running an RV campground takes your time away from crucial holidays and summer events.
Of course, you have the off-season months to make up for it. However, if you or your family members’ birthday falls in peak season, you probably won’t have the time and energy to celebrate.
Is Buying an RV Lot Worth It?
Looking at both the pros and cons, is buying an RV lot worth the hassle? For people living full-time in their RVs, the cost is more desirable than renting an RV lot. In the long run, RV lots are easy to maintain (since they’re small properties). This makes them easy to renovate and cheap to live in/rent out.
Consequently, people looking to profit from owning an RV lot will find more pros than cons to the process. However, for those that use their lots occasionally, it’s probably a better idea to rent.
For example, if you’re looking for a place to go camping in the summer months, you can easily rent one out at the time. Buying a lot requires maintenance and property taxes, which for occasional campers, may be inconvenient.
In essence, full-time residents and business owners may find the idea profitable. Occasional campers and vacationers may not. The financial processes are simply undesirable if all you want is to relax and be outdoors.
To sum it up, buy RV lots for sale if you’re looking for a long-term cut down on costs. If you have the funds and are willing to make a long-term investment, buying an RV lot for sale is a good idea. However, to make a profit, you need to focus on the location and climate of the space.
It’s a matter of strategic investment. Even if it’s more expensive, try investing in a place you know people will visit. At the same time, don’t underestimate developing RV parks. With time and resources, developing RV parks may reach higher property value and increased popularity.
With this article, I hope you’ve learned everything you need to know before buying an RV lot. Make sure to go through our checklist while looking at possible options.