Comping RV Resorts: RevPAR, Occupancy, Cap Rate, and Lot Count

An RV resort is not dirt with a building on it. It is a cash-flow business that happens to own land. When I comp one, I do not lead with $/acre. I lead with what the sites earn, then I capitalize that income into a value.

The four numbers that drive the value

If you only learn four things about RV park comping, learn these:

• Lot count is the top-line capacity. A 120-site park and a 60-site park are different asset classes entirely.
• Occupancy tells you how much of that capacity is actually rented. A 120-site park at 40% occupancy is a turnaround, not a stabilized asset.
• RevPAR (revenue per available site) blends the nightly rate and occupancy into one comparable figure. This is the metric that lets you compare a Texas lake park to a Florida beach park apples to apples.
• Cap rate is the multiplier the market applies to net operating income. RV resorts in secondary markets trade around 8% to 10%. That is the lever that turns income into price.

Why $/acre will mislead you

I looked at a 120-site RV resort on 35 acres near Lake Palestine. At $3,000/acre of dirt that land is worth $105,000. The resort sold for $2.4 million. If you comped it on land you would be off by 23x. The value is in the income the sites throw off, not the acreage. Always build up from RevPAR.

Wait. That math says the park is worth $10.3 million, but I said it sold for $2.4 million. That gap is the whole point: the $2.4 million sale was a distressed, 40%-occupancy turnaround, not a stabilized asset. The seller was pricing the dirt plus a half-empty park. My stabilized-value number is what the park is worth after I fill the sites.

Comping the cap rate, not just the price

I pull recent RV resort sales in the region and back into their cap rates. Three comps near me closed at 8.5%, 9.2%, and 10.1%. I use the 9% midpoint for a stabilized deal and bump it to 11% for a turnaround to pay for the risk and the fill-up time.

The land calculator does not touch this asset class, but the income logic is the same discipline you use on a house flip: know the number the asset can throw off, then pay a discount to that number. The Business Value Calculator is closer to this math because it also works off earnings.