Rv parks can have good cash flow, without most of the traditional headaches of being a landlord. The downside? (Every investment has one.) The income can be variable and unpredictable.
We used to travel in a conversion van that we sometimes camped in. When staying at RV parks, I noticed that the managers always seemed relatively relaxed and cheerful. I think this may be because the job is not that stressful. It certainly isn't like being a landlord.
First, as an owner/operator of an RV park, you don't own any housing or vehicles that need to be repaired. Every tenant is responsible for their own Recreational Vehicle. You need only maintain the common areas, and can do that how you want.
Second, even if they stay for months, you can collect in advance and ask them to leave on a day's notice if they cause trouble or don't pay. Regular tenant/landlord law does not apply. These are very mobile residences, unlike regular "mobile homes."
Finally, you have visitors, not tenants. They are vacationing or escaping winter, and are generally in a good mood more often than apartment or house renters would be.
On the other hand, these are visitors, who have no lease. They can leave at any time. In other words, your income can be very unpredictable from month to month. It also can vary a lot seasonally, so you have to budget well. Some RV parks are just closed for half of each year - and this may be the time when taxes and insurance need to be paid.
In buying an RV park, you have to see the actual income from the previous several years. One year is not enough. You want to see that the income has been steady or is growing. You don't want to buy a dying business.
Look at the tax returns to get the truest - or at least the safest - record of income and expenses. Determine the net income before debt service. Decide what you can invest, and what kind of return you want for your trouble. Subtract that "profit" from the net before debt service. What remains is how much you can pay on whatever loans you need to buy the property.
The amount you can borrow - with payments that fit into that number - plus the amount you have for a down payment, determines the most you can pay for the property. Don't forget to account for any additional costs you will have that the current owners don't have, such as higher insurance rates or property taxes. Also, base your calculations on existing income, even if you have a plan to increase it - that is the safest way.
How much do RV parks sell for? I have seen them as low $85,000 for a really small one. Others are priced in the millions. As you look in a given area, you will notice that they are often selling for a similar amount per space. In some parts of Arizona, for example, parks sell for as cheap as $8,000 per space, because of a limited season. In other parts of the country, they sell for as much as $30,000 per space.
You can use this as a rough guide to see if a park is priced in line with others in the area, but in the end it can be very misleading. Good management can make a nice park worth $20,000 per space, while one a mile away may be in a bad location and worth only $14,000 per space. You have to see the actual income and expenses before investing in RV parks.
Friday, June 10, 2011
Monday, June 6, 2011
Missouri River Flooding and How We Can Help YOU
As you all know- There are some major issues with the Missouri River flooding. We are aware that it has affected MANY mobile home parks, as well as the residents of these parks. At Niche Investment Network- We want to help!
We own own parks in Yankdon, South Dakota; Nebraska City, Nebraska; and Glyndon, Devils Lake, Pipestone, and Montevideo, Minnesota.
If you are in a flooded park and would like to move to one of these parks, we are willing to help. We will actually pay to have your home moved to our park. If your home is not flooded, but you are looking to move, we will buy your mobile home from you.
Let us help you!
Call or email Dave Reynolds. He can be reached at dave@mhps.com or (970) 856- 4882.
Or contact Frank Rolfe at frank.rolfe@gmail.com or (573) 535- 0206.
We own own parks in Yankdon, South Dakota; Nebraska City, Nebraska; and Glyndon, Devils Lake, Pipestone, and Montevideo, Minnesota.
If you are in a flooded park and would like to move to one of these parks, we are willing to help. We will actually pay to have your home moved to our park. If your home is not flooded, but you are looking to move, we will buy your mobile home from you.
Let us help you!
Call or email Dave Reynolds. He can be reached at dave@mhps.com or (970) 856- 4882.
Or contact Frank Rolfe at frank.rolfe@gmail.com or (573) 535- 0206.
Friday, June 3, 2011
How to Rent a Vacant Billboard by Lowering the Cost--- Without Costing You Anything!
The United States is in a depression. Money is short. And advertisers want real value for their dollar. One of the best ways of attracting advertisers – and providing a great return on their advertising dollar – is to reduce the cost of their advertisement. But how can you do that, when you have a minimum amount you can take for the sign?
Well, here are some ideas on how you can reduce the cost to the advertiser, and still meet your budget for revenue on the sign. And they are all a win/win for both your client and you.
Create a “combo” advertisement.
Why not split the billboard in half – and have two advertisers instead of one? This automatically reduces the cost to each advertiser by 50%. All you have to do to pull this off is find two advertisers who share a common exit. Then you pitch them each to share one billboard with a common exit number across the bottom. The most successful of these approaches are when you can match two businesses with similar goals who are not competitive, such as a motel and a restaurant. But even two competitive businesses, such as two restaurants or two motels, can profit from getting customers off the highway and then let them choose which one they prefer.
By splitting the advertisement in half, you have reduced the cost to each advertiser by 50%, and that means that they only have to sell half as much merchandise to pay for the billboard. And you have not had to reduce your revenue by a penny. Some of the longest-running billboards in America are these type of “combo” signs – they offer such an outstanding value to advertisers that they renew continually.
Creat a “large-scale combo” advertisement.
Sometimes, you can take the “combo” concept to the next level by combining a large number of advertisers into one common theme. An example is a billboard that I organized in the 1980’s for the merchants of Downtown Denton, Texas. The advertisement promoted tourists to visit Downtown Denton by getting off the highway at a certain exit. To pay for it, I organized the merchants together. Even though the billboard cost $1,000 per month, there were 50 merchants in Downtown Denton, so it cost only $20 per month each – a very, very reasonable sum.
The only downside to this type of structure is the extreme management nightmare of organizing and collecting from this many advertisers at one time. That’s why I choose to let the Downtown Denton billboard disband once the Texas economy strengthened – it was much easier to manage and collect from one advertiser rather than 50. But in an economic depression, like we’re in now, it’s a whole lot more fun to have a sign rented – despite the extra work – than have it sit empty.
Learn the available “coop” programs.
Many billboard salespeople are not even aware of the “coop” programs available by major brands. For example, western wear manufacturers such as Justin and Resistol often will pay a percentage of a billboard that promotes both their product and the western wear store that sells it. And it’s not just western wear. Automotive products such as Amalie and Goodyear also have similar programs, as do many other name brands. You need to learn which brands have these programs in place and then go to stores that sell these goods and see if they would rent a billboard if the brand would pay a percentage of the cost. Some of these programs pay up to 50% of the total cost of the billboard, so it is a great opportunity to cut the cost to the billboard advertiser substantially – while not costing you a penny in revenue.
You have to be careful in these programs to make sure that you follow the instructions that the brand requires to get money for your account. The logo must be of a certain size, and there is substantial paperwork required to make the program official. But the payoff is that the advertiser pays a fraction of the normal cost for the sign – with the brand paying the other portion – and your budget for the billboard is not impacted at all.
Conclusion
Everybody loves a bargain – your advertising clients included. Since all three of these techniques allow you to meet your revenue goals for your billboard, while at the same time allowing the advertiser to cut their cost substantially, you should immediately implement these ideas when you are trying to rent that vacant billboard face.
Well, here are some ideas on how you can reduce the cost to the advertiser, and still meet your budget for revenue on the sign. And they are all a win/win for both your client and you.
Create a “combo” advertisement.
Why not split the billboard in half – and have two advertisers instead of one? This automatically reduces the cost to each advertiser by 50%. All you have to do to pull this off is find two advertisers who share a common exit. Then you pitch them each to share one billboard with a common exit number across the bottom. The most successful of these approaches are when you can match two businesses with similar goals who are not competitive, such as a motel and a restaurant. But even two competitive businesses, such as two restaurants or two motels, can profit from getting customers off the highway and then let them choose which one they prefer.
By splitting the advertisement in half, you have reduced the cost to each advertiser by 50%, and that means that they only have to sell half as much merchandise to pay for the billboard. And you have not had to reduce your revenue by a penny. Some of the longest-running billboards in America are these type of “combo” signs – they offer such an outstanding value to advertisers that they renew continually.
Creat a “large-scale combo” advertisement.
Sometimes, you can take the “combo” concept to the next level by combining a large number of advertisers into one common theme. An example is a billboard that I organized in the 1980’s for the merchants of Downtown Denton, Texas. The advertisement promoted tourists to visit Downtown Denton by getting off the highway at a certain exit. To pay for it, I organized the merchants together. Even though the billboard cost $1,000 per month, there were 50 merchants in Downtown Denton, so it cost only $20 per month each – a very, very reasonable sum.
The only downside to this type of structure is the extreme management nightmare of organizing and collecting from this many advertisers at one time. That’s why I choose to let the Downtown Denton billboard disband once the Texas economy strengthened – it was much easier to manage and collect from one advertiser rather than 50. But in an economic depression, like we’re in now, it’s a whole lot more fun to have a sign rented – despite the extra work – than have it sit empty.
Learn the available “coop” programs.
Many billboard salespeople are not even aware of the “coop” programs available by major brands. For example, western wear manufacturers such as Justin and Resistol often will pay a percentage of a billboard that promotes both their product and the western wear store that sells it. And it’s not just western wear. Automotive products such as Amalie and Goodyear also have similar programs, as do many other name brands. You need to learn which brands have these programs in place and then go to stores that sell these goods and see if they would rent a billboard if the brand would pay a percentage of the cost. Some of these programs pay up to 50% of the total cost of the billboard, so it is a great opportunity to cut the cost to the billboard advertiser substantially – while not costing you a penny in revenue.
You have to be careful in these programs to make sure that you follow the instructions that the brand requires to get money for your account. The logo must be of a certain size, and there is substantial paperwork required to make the program official. But the payoff is that the advertiser pays a fraction of the normal cost for the sign – with the brand paying the other portion – and your budget for the billboard is not impacted at all.
Conclusion
Everybody loves a bargain – your advertising clients included. Since all three of these techniques allow you to meet your revenue goals for your billboard, while at the same time allowing the advertiser to cut their cost substantially, you should immediately implement these ideas when you are trying to rent that vacant billboard face.
Tuesday, May 31, 2011
NEW YouTube Channel!
If you are a fan of our blog, you’ll love our NEW YouTube channel: http://www.youtube.com/user/NicheInvestments.
We are very excited to launch the channel and hope that you’ll check it out!
We are very excited to launch the channel and hope that you’ll check it out!
Wednesday, May 25, 2011
Mobile Home Resort Now Equipped with Solar Energy
I read this exciting article from Kate Kaemerle on www.tucsoncitizen.com.
Stockbridge Energy Group and Cal Energy Group announced today the completion of a 630 kilowatt, single-axis tracker, ground-mounted photovoltaic system at Plaza Del Sol Mobile Home Resort, which is home to over 600 families. This solar array is expected to offset approximately 20 percent of the mobile home resort’s annual energy use.
“The photovoltaic solar array at Plaza Del Sol will help our mobile home resort lower our operating costs, which is very significant in the current state of our economy,” stated Jerry Norman, managing partner of Plaza Del Sol. “More importantly, this system shows Plaza Del Sol’s commitment to going green and reducing our carbon footprint.”
The solar array at Plaza Del Sol is the largest residentially-zoned solar system in the state of Arizona. This is the first large-scale project installed in a residential area under new zoning regulations set forth by the City of Tucson. “It was a great opportunity to work with the City of Tucson,” said Cal Energy Group Vice President of Operations, Blake Webster. “The city officials have been very helpful throughout this entire process.”
Plaza Del Sol has been awarded performance based incentives from Tucson Electric Power, which will be paid out over the course of 15-years. “Plaza Del Sol is setting a great example of what other mobile home parks in Arizona should be doing — taking advantage of financial incentives and increasing their bottom line with solar,” said Cal Energy Group President, John Calvert. ”In addition to the great incentive program they have in place, Tucson Electric Power has a great staff that proved to be a huge help on this project.”
The benefits of this solar installation extend beyond Plaza Del Sol. Stockbridge Energy Group worked closely with Pima Community College in developing an on-the-job training program for students enrolled in their Solar Technologies program. ”It was a great opportunity for local students to get some hands-on experience,” commented Stockbridge Energy Group president, T.J. Stockbridge. “It has been very satisfying to work on a project that has had such a positive impact on so many people.”
A ribbon-cutting ceremony will be held on May 26, 2011 at 10:00AM at the Plaza Del Sol Mobile Home Resort: 1655 W. Ajo Way, Tucson, AZ 85713.
What do you think? Could you do this in your community?
Stockbridge Energy Group and Cal Energy Group announced today the completion of a 630 kilowatt, single-axis tracker, ground-mounted photovoltaic system at Plaza Del Sol Mobile Home Resort, which is home to over 600 families. This solar array is expected to offset approximately 20 percent of the mobile home resort’s annual energy use.
“The photovoltaic solar array at Plaza Del Sol will help our mobile home resort lower our operating costs, which is very significant in the current state of our economy,” stated Jerry Norman, managing partner of Plaza Del Sol. “More importantly, this system shows Plaza Del Sol’s commitment to going green and reducing our carbon footprint.”
The solar array at Plaza Del Sol is the largest residentially-zoned solar system in the state of Arizona. This is the first large-scale project installed in a residential area under new zoning regulations set forth by the City of Tucson. “It was a great opportunity to work with the City of Tucson,” said Cal Energy Group Vice President of Operations, Blake Webster. “The city officials have been very helpful throughout this entire process.”
Plaza Del Sol has been awarded performance based incentives from Tucson Electric Power, which will be paid out over the course of 15-years. “Plaza Del Sol is setting a great example of what other mobile home parks in Arizona should be doing — taking advantage of financial incentives and increasing their bottom line with solar,” said Cal Energy Group President, John Calvert. ”In addition to the great incentive program they have in place, Tucson Electric Power has a great staff that proved to be a huge help on this project.”
The benefits of this solar installation extend beyond Plaza Del Sol. Stockbridge Energy Group worked closely with Pima Community College in developing an on-the-job training program for students enrolled in their Solar Technologies program. ”It was a great opportunity for local students to get some hands-on experience,” commented Stockbridge Energy Group president, T.J. Stockbridge. “It has been very satisfying to work on a project that has had such a positive impact on so many people.”
A ribbon-cutting ceremony will be held on May 26, 2011 at 10:00AM at the Plaza Del Sol Mobile Home Resort: 1655 W. Ajo Way, Tucson, AZ 85713.
What do you think? Could you do this in your community?
Monday, May 23, 2011
Thursday, May 19, 2011
How to Keep RV's Coming Back
There are over 8,000,000 RV owners in the U.S. And they all have to stay somewhere. But that’s no excuse for not treating every single one as though they are the most important customer in the world. That kind of attitude will propel you to the top of the pile in RV park owners – and reward you with outstanding occupancy and cash flow.
So how do you earn lifetime RV park customers?
Over-Deliver
It’s not enough that your customer should be pleased. You want them to be so excited about their experience that they tell all their friends! If you think about it, there are only a few things you have to do to over-deliver in an RV park:
• Have an attractive entry. It sets the first impression in the customer’s mind, and validates their idea to stay at your RV park all the others out there. There is no excuse not to have decent landscaping and an attractive sign. And the grass should always be manicured and edged.
• Greet your customer with a smile and a warm, sincere “welcome”. These folks are paying your mortgage, and they sure deserve more than a cold “what do you want?” This ties in to their first impression of their experience.
• Freely dispense travel advice. They are new to the area, and need a laundry list of things to do. And you need to know the times of operation and all the other information a concierge at a hotel can provide. It does not hurt to have a map and flyers to all the attractions handy that they can take with them. Isn’t that what you’d want?
• Check on them again after they’ve connected their utilities and settled in. Make sure everything is going O.K. It only takes a couple minutes, but they really appreciate the customer service – the same as when the restaurant manager checks on your during your dinner.
When There Is A Problem – Solve It
Studies have shown that a customer who is unhappy and then made happy is more loyal than one that never had a problem in the first place. This means that it is extremely important to solve every customer issue immediately and to their satisfaction.
Remember that the alternative to a happy customer is a walking billboard of negative feedback on your RV park. If you want to be successful, having an unhappy customer is just not an option.
So how do you earn lifetime RV park customers?
Over-Deliver
It’s not enough that your customer should be pleased. You want them to be so excited about their experience that they tell all their friends! If you think about it, there are only a few things you have to do to over-deliver in an RV park:
• Have an attractive entry. It sets the first impression in the customer’s mind, and validates their idea to stay at your RV park all the others out there. There is no excuse not to have decent landscaping and an attractive sign. And the grass should always be manicured and edged.
• Greet your customer with a smile and a warm, sincere “welcome”. These folks are paying your mortgage, and they sure deserve more than a cold “what do you want?” This ties in to their first impression of their experience.
• Freely dispense travel advice. They are new to the area, and need a laundry list of things to do. And you need to know the times of operation and all the other information a concierge at a hotel can provide. It does not hurt to have a map and flyers to all the attractions handy that they can take with them. Isn’t that what you’d want?
• Check on them again after they’ve connected their utilities and settled in. Make sure everything is going O.K. It only takes a couple minutes, but they really appreciate the customer service – the same as when the restaurant manager checks on your during your dinner.
When There Is A Problem – Solve It
Studies have shown that a customer who is unhappy and then made happy is more loyal than one that never had a problem in the first place. This means that it is extremely important to solve every customer issue immediately and to their satisfaction.
Remember that the alternative to a happy customer is a walking billboard of negative feedback on your RV park. If you want to be successful, having an unhappy customer is just not an option.
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