How to Compare Two RV Park Deals Side by Side
Public domain, via Wikimedia Commons
The deal with the higher advertised cap rate is not automatically the better deal. When you put two RV park offerings side by side, the number that matters most is the one behind the number: how the income was calculated, what condition the infrastructure is in, and what happens if occupancy drops 15 points. Compare those, not just the headline return, and the right choice usually becomes obvious.
The short version
| Deal A (value-add, older park) | Deal B (stabilized, newer park) | |
|---|---|---|
| Advertised cap rate | Higher, often 8-10% | Lower, often 5-7% |
| Occupancy / utilization | Inconsistent, seasonal swings | Steady, often 70%+ annual |
| Site mix & infrastructure age | Mixed hookups, older pads and utilities | Full hookups, newer pull-through sites |
| Deferred maintenance | Likely, harder to quantify upfront | Minimal, usually documented |
| Income verification | Often a broker pro forma, not a true T12 | Usually a real trailing 12 with tax returns |
| Downside risk if occupancy drops | Higher, thinner cushion | Lower, more buffer built in |
Where the value-add park wins
An older, undermanaged park almost always shows a better cap rate on paper. That is because the seller's asking price reflects current, often poor, operations rather than what the park could produce with better management, updated sites, or a rate increase to market. If you have the time and the operating know-how to fix what is broken, that gap between current performance and market performance is where the return lives.
These deals also tend to have a lower entry price per site, which matters if you are trying to get into the asset class without a huge check. And if the park sits in a growing corridor or near a demand driver like a lake, a national park gateway, or an energy or construction boom, the upside case can be real and not just a broker story.
The tradeoff is that you are underwriting a plan, not a track record. You need a realistic budget for septic, electrical, and road repairs, and a realistic timeline for getting occupancy up. If either of those slips, the return compresses fast.
Where the stabilized park wins
A newer, well-run park with verified income is the boring choice and that is the point. The numbers you see are close to the numbers you will get, because someone has already worked out the kinks. Occupancy patterns are established, the site mix is proven to rent, and there is a real trailing 12 months of bank statements or tax returns behind the pro forma instead of a spreadsheet built on hope.
Lenders like this too. A stabilized park with two or three years of clean financials usually gets better loan terms and a faster close than a turnaround project, because the bank is underwriting history instead of a business plan. For passive investors who want cash flow without operational risk, this is usually the safer entry point, even at a lower headline return.
The cost of that safety is a lower ceiling. You are buying performance that is largely already priced in. There may still be room to add sites, raise rates modestly, or add amenities like storage or cabins, but you are not buying a discount to intrinsic value the way you might with a rougher park.
What this looks like in practice
When you actually sit down with two offering packages, a few patterns show up consistently. Broker pro formas almost always show a higher NOI than the trailing 12 months of actual bank deposits, sometimes by 15% to 30%. Always ask for the T12 and, if possible, tax returns, and treat the pro forma as a ceiling, not a baseline.
Expense ratios are another place deals get compared unfairly. A well-run RV park typically runs 30% to 45% of gross revenue in operating expenses, depending on how much is owner-managed versus staffed, and whether utilities are metered to tenants or absorbed by the park. If one deal shows expenses at 25% and the other at 40%, the low number is usually missing something: management fee, reserve for capital repairs, or property insurance at a realistic rate rather than what the current owner happens to be paying.
Deferred maintenance is the hardest thing to compare apples to apples because sellers rarely disclose it voluntarily. Ask directly about septic system age and capacity, electrical service (30 amp versus 50 amp, and whether it has been upgraded), and road and pad condition. A park that looks fine in photos can have a septic system at the end of its useful life, and that single item can run five to six figures to replace.
Finally, run both deals through a downside scenario: what happens to debt coverage if occupancy drops 15 to 20 points from your projection, or if one major expense line comes in 25% over budget. The deal that still cash flows under that stress test is usually the one worth pursuing, even if it is not the one with the flashier headline number. This is the kind of comparison work we walk through with investors at Invest With Zac, because the checklist matters more than the pitch deck.
FAQ
What's the single most important number to compare?
Verified trailing 12-month net operating income, not the pro forma cap rate. Everything else, including price per site and projected returns, is built on top of that number, so it needs to be real before you compare anything else.
How do I compare deals in different markets fairly?
Normalize for site type and season length rather than just comparing revenue per site. A 40-site park open eight months a year in a seasonal market and a 40-site park open year-round in a warm climate will show very different revenue even if they are equally well run, so compare revenue per available site-night if you can get that data, not just annual gross revenue.
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