How Much Does it Cost to Build an RV Park in Texas?

How Much Does it Cost to Build an RV Park in Texas?

On average, RV parks in Texas cost about $20,000 per pad site to build. Over half of that cost is related to roads, driveways, pad sites, utilities, landscaping and other infrastructure. In Texas alone, new RV parks and campgrounds totaling over 2,500 sites have opened in 2021 or are scheduled to open in 2022. Camping and RV culture was already strong before COVID but now it’s even stronger due to families and campers with a thirst for exploring the United States as opposed to traveling internationally. As one of the hotbeds for RV parks and campgrounds in the United States, Texas will continue to see strong demand for RVers in the coming years.

Buying vs Building

Buying an RV park just might be the way to go if you’re looking for a strong ROI, less risk, and an easier route to secure third party financing. Other considerations include: are you a people person, do you like the outdoors and being your own boss? If your answer was an enthusiastic yes to these questions then read on!

 

The return on investment for campgrounds is one of the strongest in the tourism sector. In general you can estimate an ROI of 10%-20%. It’s also important to have a budget and determine how large of an RV park you can purchase. You can read more about that on our other blog post RV Park Investments:What Investors Should Know.

 

Building or developing an RV park can also come with an upside. For example if you can find land at below market price in an up-and-coming market with limited supply, you may reap more benefits than buying an existing RV park. The most crucial factors in developing a successful RV park is location and the level of nearby competition. 

Primary Cost Factors to Build an RV Park

Combining a love of the outdoors and bringing people together is what drives a lot of people to develop their own RV park. There are eight cost factors to consider when building an RV park in Texas. We’ll break those down below. 

 

Land

First, consider the changing demographics. The pandemic has pushed Americans into traveling for longer periods of time. Families with children are learning and working remotely side by side. Developers have taken notice and are building larger wider spaces. With the rise of housing costs in Texas more families are opting into RV’s until they decide where they want to live. This all needs to be accounted for when purchasing land in Texas for an RV park. The average cost to build an RV park will usually come in between $15K and $35K per pad site, depending on the choice of gravel or concrete pad sites and driveways. Consider amenities such parks/playgrounds for children, laundry facilities, swimming pools and designated pet areas.  All of these factors will play a part in determining how many acres to look for when purchasing a site.

 

Lodging & Facilities 

A good rule of thumb to consider is approximately 10 pad sites per acre, with each pad site providing room for one RV, its utility connections, and one or two additional vehicles. A trend that has picked up speed in the last couple of years is building park models, cabins or tiny homes. They are legally classified as RV’s since they have wheels but do not leave the park. It will also be important to build out office space for employees. Pricing will vary wildly but you can look to spend $100-$550 per square foot. Providing guests with restrooms and good water pressure will also be something to consider for your RV park. Expect to pay around $20,000 for build out. 

 

Licensing and Permitting

There will be fees associated with the land which include sales tax and occupancy fees or certificates. These fees all depend on what you will be offering at the RV park and location. Some permits to consider are water, sewer and septic, construction permits. Check with your local county and also The Texas Commission on Environment Quality.

 

Employees

An extremely important aspect of running and maintaining an RV park is a park manager. The average salary for an RV park manager in Texas is around $40,000 a year. Since there is a higher turnover rate in RV parks the manager will need to greet guests, acquaint them with the property and maintain common areas. Expect to hire maintenance workers and administrative personnel for larger parks.

 

Insurance and Legal

At the very least expect to pay around $450-$1,500 per year for $1 million in general liability coverage. This can vary greatly depending on the coverage you obtain and the insurance company. 

 

To start a campground business you will need to register with the Department of State and apply for a Federal Tax ID Number. Look up local regulations concerning zoning and municipal codes. Each county, city and state all have different requirements in the interest of public safety.

Maintenance & Upkeep

This is a short list of general expenses that almost all RV parks will have:

  • Utilities
  • Cleaning Supplies
  • Payroll
  • Septic tank maintenance
  • Licenses and permits that need to be renewed
  • Gravel or patch materials for roads

 

Marketing and Advertising 

One aspect that tends to get overlooked is a marketing budget. How will campers find your RV park? Set up a monthly or yearly budget for a robust website with software that will allow for online bookings. Targeted online advertising, social media, and email marketing will also grow the business and bring in revenue. Consider contracting out all marketing efforts and hire someone with SEO knowledge to create content for social media and email marketing. Expect to pay a flat fee for a website buildout and an hourly rate for all other marketing. 

 

Utilities

Septic Tank

In general you can expect to pay around $10,000-$15,000 per septic tank when you include drain fields, labor and piping. RV parks can generate a lot of trash and sewage so plan to have your sewer system cleaned every 3-5 years.

Water

Water will be another component to your septic system. If your location is in a more remote area you will most likely have to drill a well and that can run $25-$65 per foot. The cost will also depend on how deep the well will need to be. 

 

Electricity

Electricity is one of your most important utilities and one that should be installed by a certified electrician. To accommodate all types of campers from the small pop ups to luxury motorhomes and 5th wheelers it would be best to install 50-amp, 30-amp,15-amp and 110/120-volt outlets. This cost could range anywhere from $2,000-$3,000. 

 

Wifi & Internet

This is also an essential part of an RV park with so many Amercians now working remotely. Guests will want to stream their favorite TV shows, Zoom for business calls, and upload pictures to their social media. Install high speed internet and include it in the cost of the site. Pricing will vary for the internet depending on location and speed. On average you can expect to pay $250-$500 per month with an initial setup cost of around $3,000-$4,000. The best place to start is to reach out to the local provider in the area. You will have happy campers excited to Instagram their stay at your RV park and provide free marketing!

 

Hiring a commercial real estate brokerage team that is experienced in RV park investments will ensure you find the right property for your portfolio. The expert brokers here at CXRE can help you identify RV parks for sale in your target market and will work hard to get you the best deal.

 

Other RV Park Resources

Internal Links-Related Articles

RV PARK INVESTMENTS: WHAT INVESTORS SHOULD KNOW

RV Park Sales

 

RV Park Listings

OFF MARKET RV PARK LISTINGS

 

Sources

https://www.ibisworld.com/united-states/market-research-reports/campgrounds-rv-parks-industry/

https://www.arvc.org/

https://www.rvtravel.com/building-an-rv-park-1/

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