Appraisal of Recreational Vehicle Parks - Valentine Appraisal

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  • April 23, 2018

Despite concerns of dwindling energy supplies, recreational vehicles continue to be popular with millions of travelers and campers. 

There are five basic types of recreational vehicles: (1) motorhome, (2) travel trailer, (3) truck camper, (4) tent trailer, and (5) 5th-wheel trailer.

There are different types of recreational vehicle parks, including overnight parks, extended-stay parks, destination parks, and other types of parks.  In order to be prepared to analyze the highest and best use properly, a market analysis must be completed.  This provides an understanding for a potential client base in the particular area.  Locational features including distance to population centers, climate, and recreation amenities will determine the type of clientele the park will attract.  Both location and demographic factors have a significant impact on the quality and quantity of income a park will generate.  In the valuation of an RV site, the appraiser needs to analyze two distinct entities: the underlying land and the individual sites or spaces that comprise the facility.  These items need to be analyzed separately.  The utility of the RV site may be affected by the topography, configuration, size, and soil conditions, and by the availability of adequate utilities.  Land with few physical barriers is more desirable and less costly to develop.

Three types of spaces or sites are found in most RV parks: pull-through, back-in, and group spaces. 

A thorough discussion of the improvements is needed to support the selection and analysis of comparable properties.  Some likely park improvements typically include sanitary facilities, registration, roads, laundry, park store, recreation facilities, and other improvements. 

Recreational vehicle parks are usually bought and sold on the basis of their income potential.  In fact, of the three traditional approaches to value, the Income Approach is the most applicable because it most closely follows the actions and expectations of investors and owner-operators.  The Cost Approach is flawed by difficulties finding comparable land sales and estimating depreciation.  The Sales Comparison Approach is often given secondary weight because although it can be a powerful valuation tool, it is often difficult accessing sales information.  Still, as per the Sales Comparison Approach, units of comparison include price per space, gross income multiplier, and gross profit multiplier. 

After determining the value of the RV park as a going concern, segregating real estate from non-realty values is often required.  Most of the value in a recreation vehicle park is represented by real estate.  The bulk of non-realty value present is usually attributed to the intangible assets such as goodwill. 

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