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Buying a mobile home park versus an RV park

Although the concept is similar, there are various differences between owning a mobile home-park and an RV park.

To encapsulate the differences between running a mobile-home park and running an RV park, the former are invariably easier to operate.

The main benefit of mobile-home parks, by contrast, is they tend to have more and better facilities and so can attract a broader spectrum of customers, from long-stay residents to brief-stay vacationers.

As camping makes a comeback in Canada, now is the perfect time to invest in a camping business, whether it be a campsite, RV park or mobile home site

This article outlines some of the comparisons between overnight-destination type RV parks and typical mobile home parks. It is important to note that seasonal or extended-stay RV parks will have more qualities typical to a mobile home park, rather than overnight RV sites.

Management

Management is probably one of the most significant differences. In most cases it takes less time and manpower to run a mobile home park for the following reasons:

Less liaising with visitors: the owner of a mobile-home park will generally visit residents on a monthly basis, normally when the rent is due or any time there is a problem. However, an RV park owner may have a new camper in every other day. The RV park owner ordinarily familiarises visitors with the park facilities and local area too.

Less cleaning: many RV sites have communal showers and toilets that need to be cleaned several times throughout the day, whereas most mobile-home residents have their own restrooms within their dwelling.

Less maintenance: in mobile-home parks the manager usually just maintains the common areas, whereas the RV park proprietor must also ensure each plot is clean and secure before renting it out, which is time-consuming given the rapid turnover of visitors.

Finance

It is normally harder to obtain a loan, and interest rates tend to be higher, for an RV park than a mobile-home park. Loan terms for RV parks tend to be contingent not only on the value of the property itself, but also the borrower's credit score and entrepreneurial background, because of the more demanding nature of the business.

For this reason, vendor financing is more commonly offered by sellers of RV parks.

Duration of stay

Mobile-home residents tend to stay in the park on a permanent basis or until they sell their home and move somewhere else.

Overnight or short-stay RV travellers only stay for a week or less before moving on.

That said, some RV sites rent out space for extended time frames.

Such sites tend to share many of the characteristics of mobile-home parks and, while they're more demanding to run than more basic parks, they can attract a broader range of customers.

Utilities and amenities

Normally, a mobile-home park owner will only pay the utilities in a common area or building and pay for their own gas, electric, water, sewer, cable TV and internet. But in an RV park the utility bills are often included in a nightly or weekly flat rate.

RV parks often also include an onsite store, recreational hall, restrooms and showers. Some may even have a swimming pool.

Mobile home parks don't tend to offer these facilities, but at least demands on the owner are consequently lighter. On average, an RV park with 400 spaces will probably have two to three times more employees than a comparably sized mobile-home park.

Long-distance ownership

Mobile-home parks are often owned by a person or company that lives outside of the city or state in which the park is based. Long-distance owners tend to hire an onsite manager to supervise the park and visit a couple of times per year.

However, most live onsite or nearby, and they are generally involved with the daily management of the park. It is possible to run an RV park from a distance, but in order to do so successfully there must be a good employment structure and staff in place.

Eviction

If a mobile-home resident can't pay their rent or is causing other problems, the park owner will have to handle the matter in court. It may take several weeks to have them evicted from the park.

However, in an RV park the rent is usually paid in advance and a park owner should be able to have guests removed immediately for breaching your rules. Laws differ between states so it is advisable to research the local laws and regulations and how they apply to you before buying a mobile-home or RV park.

Taxes

Mobile-home or RV park owners must pay tax on the land. RV park visitors will pay lodging/transient tax, unlike mobile-home park residents, who instead are subject to yearly taxes to the county treasurer.

Customer satisfaction

It usually costs a mobile-home owner between $1,000 and $2,000 to relocate, whereas RV owners either have their home built into the vehicle, or as a trailer that hooks easily onto the car, making relocation quicker, easier and cheaper. RV park owners therefore have to work much harder at keeping their customers satisfied and attracting new customers.



Krystena Griffin

About the author

Krystena Griffin writes for all titles in the Dynamis stable including BusinessesForSale.com, FranchiseSales.com and PropertySales.com as well as other industry publications.

@Be_TheBoss

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