What Are Common Red Flags in an RV Park's P&L?

August 29, 2026 · RV park investing, explained

CC0, via Wikimedia Commons

Most investors read a P&L looking for the wrong thing. They scan the bottom line, check the cap rate math, and move on. But RV parks are cash businesses run by owner-operators who often keep loose books, mix personal and business expenses, and don't have a CFO checking their work. That means the real risk usually isn't in the number itself. It's in what's missing, what's smoothed over, or what's been left off the page entirely. A lot of the confusion comes from investors treating a P&L like a public company's audited financials, when in reality it's often closer to a shoebox of receipts turned into a spreadsheet.

"If expenses look low, that's a good sign"

Low expenses feel like a win. But in RV parks, unusually low repair and maintenance spending often means deferred maintenance, not efficient operations. Roads that haven't been graded in years, septic systems running on borrowed time, and electrical pedestals held together with tape all keep expenses low right up until they don't. The kernel of truth here is that some parks really are run lean and well. The difference is whether low expenses come with evidence, recent capital work, service records, utility upgrades, or whether they come with vague answers when you ask what's been done to the infrastructure in the last five years.

"A big year-over-year revenue jump means the park is growing"

Revenue growth looks great on a trendline, but it doesn't tell you why it happened. A jump could come from real occupancy growth, or it could come from one large rate increase pushed through right before the park went to market, a one-time event or rally that inflated a single month, or new long-term tenants counted as short-term revenue at a higher rate. None of those are dishonest by themselves, but they change what the number means. The fix is simple: ask for occupancy and average daily rate broken out by month, not just a total revenue line. If revenue is up 20% but occupancy is flat, the story is about pricing, not demand, and that changes how sustainable the growth is.

"Add-backs are just normal accounting, no need to dig in"

Every deal has add-backs. Owner salary, personal vehicle expenses, one-time legal fees, these are common and often legitimate. The myth is that add-backs are automatically safe to accept at face value. In practice, add-backs are where sellers hide the cost of running the park. A common pattern is labor getting added back as "owner did it himself" when in reality replacing that labor at market rate would cost $40,000 to $80,000 a year, a range that varies a lot by park size and region. Another pattern is management fees getting stripped out entirely, as if the park runs itself. If you can't verify an add-back with a receipt, a contract, or a clear explanation, treat it as a red flag until proven otherwise, not a green light.

What actually matters instead

The goal isn't to catch someone lying. Most sellers aren't. The goal is to find the gaps between what's on paper and what it actually costs to run the property the way you intend to run it. A few patterns are worth checking every time:

• Utility expenses that seem too low for the number of sites and hookup types, which often means sub-metering issues or unpermitted usage
• Property tax that hasn't been reassessed to reflect a sale, which means your actual tax bill post-close could be meaningfully higher than the seller's trailing twelve months
• Insurance premiums that look cheap relative to comparable parks, which sometimes means coverage gaps that only show up after a claim
• A management or labor line that's zero or near-zero, which usually means the owner is working 60-plus hours a week for free and that cost disappears the day they leave
• Repairs and maintenance that spike right before the sale, which can mean the seller is doing cosmetic fixes to mask deferred capital needs

None of these prove a deal is bad. They just tell you where to ask more questions, request more documents, or bring in a professional to verify. A P&L is a starting point for due diligence, not the finish line. The parks that turn into problems later are rarely the ones with an obviously bad number. They're the ones where a plausible-looking number hid a real cost that showed up six months after closing.

If you're evaluating RV park deals and want a second set of eyes on the numbers before you commit capital, that's the kind of review Invest With Zac helps investors work through.