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Last Updated on September 5, 2024 by Paul Clayton
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Deeded RV Lots: The Pros and Cons of Lot Ownership
Deeded RV Lots: The Pros and Cons of Lot Ownership is a topic gaining attention in recent years. This entails the buying and owning of a permanent site for your RV. Prepare to understand comprehensively whether this form of property ownership aligns with your lifestyle and financial goals.
- Offer total customization freedom without restrictions.
- It is ideal for consistent RV parking, avoiding availability worries.
- Rent out your lot for additional income opportunities.
- RV lots can be appreciated as they offer long-term investment potential.
- Ownership often costs less than frequent RV parks.
- The initial investment covers lot, utilities, taxes, and maintenance.
Most people own RVs because they want the comfort of home without putting down some roots. However, whether you possess an RV or rent one, you know there are some benefits to having an RV lot.
This is particularly true for people who live or frequently travel in their RVs.
Over time, renting is more costly than owning, so 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 a 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 real estate ownership.
As a lot owner, you can do whatever you want. If you’re going 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
Most people buy an RV lot because it’s simply more practical. For example, using your RV as a vacation home is cheaper than owning and maintaining a separate vacation property.
Additionally, while some people find RVs attractive for their mobility, others can tire of the constant travel.
Of course, you can always use an RV to take a family road trip, but a simple family campout in an RV lot may be just as fun if you’re tired of constant driving.
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-site.
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 of 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:
1. Area
In essence, the cost of buying an RV lot differs from area to area. Some locations (including Palm Springs) are prime vacation spots, making RV lots more expensive.
For example, Las Vegas has RV parks with property prices as high as $200,000.
Las Vegas is highly popular because of its tourist facilities and famous vacation sites.
2. Amenities
Moreover, popular RV parks 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 essential utilities such as electricity, gas, and water.
You should invest a lot in on-site electricity and water supply (rather than using portable water tanks and electricity generators.)
3. Taxes
Thirdly, most RV lots have fees and taxes imposed on them. These fees involve maintenance, ranging from $50 to $500 per month (depending on location). Taxes, on the other hand, rely on the value of the land.
4. Climate
Another factor affecting cost is climate. RV parks in harsh climates are cheaper. Some of these parks have low 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 want to invest, find one that meets all your needs.
The answer is to find the right balance between these factors according to your area.
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)
- There is a lot of 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, and 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 recommend hiring a real estate agent to help you filter 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 and landscape, and you cut down on storage and fuel costs.
What are the other advantages of lot ownership?
1. Financial Stability
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 do so with strategic investment in developing RV parks.
2. More Profits
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. RV parks are the best real estate assets out of all real estate asset types. The average return for owning an RV lot (or two) is 10% to 20%,
3. Being Your Boss
As mentioned, you have more control over your property as an owner. Consequently, you can do what you want without hesitation (as long as it falls within HOA regulations).
Owning an RV lot may be a good idea if you’re good at management and looking for an entrepreneurial opportunity.
Since renting out RV lots is seasonal, 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.
4. Multi-generational Investment
With current real estate prices, buying a house on an average worker’s income is nearly impossible. 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 costly. 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 expand.
Cons of Lot Ownership
Everything has a downside. RV lot ownership is undoubtedly 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:
1. 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 prioritize it, you can find an RV park with its bank and financing facilities. This is particularly preferable if you live out of state.
2. Frequent Utility Costs
Some RV parks and campgrounds don’t offer connectivity to on-ground electricity, water, and gas supply. Consequently, fending with RV generators, water tanks, and heaters would be best.
Running and maintaining these appliances accumulates and becomes very expensive over time.
It would be best to have more fuel, water, and gas cylinders constantly. If you run out, it’s very inconvenient for you and your guests. If you rent 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.
3. No Summers Off
If you rent out an RV lot, you save 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 your or your family member’s birthday falls in peak season, you probably won’t have the time and energy to celebrate.
Is Buying an RV Lot Worth It?
Considering 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. 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 at a time. Buying a lot requires maintenance and property taxes, which may be inconvenient for occasional campers.
In essence, full-time residents and business owners may find the idea profitable. Occasional campers and vacationers may not. The financial processes are undesirable if you only want to relax and be outdoors.
How Do you Make Passive Income from an RV?
Making passive income from an RV entails various strategies. One viable option is through RV rental services. Owning a property that offers substantial privacy may appeal to individuals or families seeking a unique “staycation” experience.
In such a case, your RV can serve as a private campground. Another alternative is renting your RV out to those who yearn for a distinct country road trip experience.
Whichever route you choose, the key is to provide a service that meets the needs of potential renters. This way, you can earn a steady passive income from your RV.
Final Words
Being the owner of a deeded RV lot provides the freedom to customize the space without any restrictions, and it ensures a consistent parking spot for your recreational vehicle, eliminating any worries about availability.
Another benefit is generating income by renting out your lot when it’s not in use.
Over time, the value of these RV lots can be appreciated, making them a viable long-term investment. Compared to the cost of frequently using RV parks, owning a deeded RV lot often turns out to be less expensive in the long run.
The initial investment for lot ownership typically covers the cost of the lot, utilities, taxes, and maintenance.
However, it’s essential to consider some potential drawbacks of lot ownership. These can include the upfront cost, the potential for property tax increases, the responsibility for maintenance, and restrictions that may come with some lots.
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