How To Secure Funds To Buy A Campground

Camping has been steadily growing over the last half-decade, with the pandemic fueling an aggressive growth for outdoor recreation. The 2021 North American Camping Report shows that the percentage of first-time campers grew five-fold in 2020 as compared to the previous year. Over 10.1 million households camped for the first time in 2020. 60% of the first-timers say that they will ‘most likely’ continue camping in the coming year.

With more than 86 million households in the US considering themselves as campers, owning a family campground seems like a solid investment. You can generate a steady flow of income from renting out spots at the RV park, among other income-generating activities.

Setting Up A Campsite Business Is A Huge Investment

RV parks and family campgrounds are often found in prime locations and vacation spots across North America. You may have to part with a pretty hefty sum to afford the land. Small campsites may set you back an average of 300000 while you may need over a million to buy a successful campground.

Besides, modern campgrounds have dropped the ‘outdated campfire models,’ adopting luxurious amenities to recreate a resort-like experience. In fact, one of the top three most important features for campers is access to Wi-Fi. You may need to have adequate funds to spruce up your campground to make it desirable to the modern camper.

You Need A Proper Valuation

Before deciding to buy a campground, you may need to get the valuation right. Your financiers may be interested in:

  • Location and size of the campsite
  • Accommodation options including cabins and RV parking spots
  • Amenities and guest facilities
  • Occupancy rates and frequency of return clients
  • Number of staff and their qualifications
  • Quarterly and annual business earning
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You may need to adequately research the campground you wish to purchase before seeking the funds. Here are the available funding options:

1. Cash Option

As a real estate investor, you may have saved up some funds from other investments that you can use to buy a campground. Cash payments are ideal for buyers that may be debt-averse or have supplementary funds for investment.

2. Commercial Lending Facilities

Banks and mortgage companies are another excellent financing option that you can utilize to purchase a campground. However, you may have to bear with the strict background checks and red tape. Some lenders may classify the purchase as a high-risk investment, requiring you to deposit huge equity before loan approval.

You may need to provide evidence of your financial situation, a well-thought-out business plan, cash flow and revenue forecasts, and experience within the industry. Owning existing RV parks may increase your chances for approval. Your interest rates may vary depending on the loan amount, repayment period, LTV ratio, condition of the property, credit scores, and down payment.

3. Financing Through A Campsite Franchise

Buying a campground franchise can make it easier to access funding. The franchise brand name can soften the hearts of the financiers. Additionally, most franchises can help you create a business plan that can easily convince lenders to approve your loan.

One of the most difficult phases of buying a campsite is getting adequate financing. You can choose to pay out of pocket, from traditional banking, or through your franchise lenders. For more information on how to buy a campground, reach out to Leisure Systems, Inc. today.

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