How RV Parks Are Valued

The income approach

Most RV parks are valued using the income approach: net operating income divided by a capitalization rate. NOI is annual revenue minus annual operating expenses, before debt service, depreciation, and income taxes.

The cap rate is not a fixed market number. It is the buyer's judgment about risk — how verifiable the income is, how durable the demand is, and how much capital the property will need.

Revenue: gross is not the point

• Monthly site rent and seasonal contracts
• Nightly and weekly transient revenue
• Cabin, park model, and glamping revenue
• Storage, laundry, store, propane, and activity income
• Utility reimbursements and submetered electric

Occupancy and revenue per site

Revenue per available site is often more informative than headline occupancy. A park at 60 percent occupancy with strong nightly rates can outperform a park at 95 percent occupancy on low monthly rents.

Buyers also weigh tenant mix. Monthly tenants provide stability and lower turnover cost; transient guests produce higher rates but require marketing, staffing, and cleaning.

Site count and site quality

Site count sets scale, but quality sets rate. Pull-through sites, level pads, big-rig length, spacing, shade, and full hookups all affect what a site can command and how often it rents.

Utility infrastructure

• Electrical: amp service by site, pedestal condition, transformer and panel capacity, submetering
• Water: municipal service versus private well, permits, capacity, testing, freeze history
• Sewer: municipal connection, septic fields, or lagoon — with documented capacity
• Septic systems: age, permit records, drain field condition, and pumping history
• Propane, trash, and internet service arrangements

Land value and expansion potential

In growth corridors such as Middle Tennessee, land value can exceed the value of the operating business. In rural markets, income usually governs. Expansion acreage adds value only when utilities, zoning, topography, and access make additional sites realistically permittable.

Condition, amenities, and deferred maintenance

Amenities matter to the extent they drive rate or occupancy. Bathhouses, laundry, playgrounds, and pools have operating costs attached, so they are valued on contribution rather than existence. Deferred maintenance is priced directly: roads, pads, utility lines, and buildings all show up as either a price adjustment or a capital reserve.

Location, market demand, and zoning

Demand drivers differ across Tennessee: national park tourism in Sevier County, lake recreation around Kentucky Lake and Tims Ford, workforce and contractor demand in Clarksville, Kingsport, and Memphis, and interstate traffic along I-40, I-75, I-24, and I-65.

Zoning conformity is a real value factor. A legal nonconforming park may face limits on rebuilding or expanding, and some jurisdictions restrict length of stay. Confirming your classification early prevents a late surprise.

Site-specific risk factors

• Floodplain and floodway coverage over income-producing sites
• Road and access condition, including shared or easement access
• Drainage and standing water history
• Environmental history, including fuel tanks and prior land use

Debt, financing, and structure

Existing debt does not usually prevent a sale, but prepayment penalties, assumability, and cross-collateralization affect net proceeds and structure. Seller financing can change the effective price and the tax timing — discuss it with your CPA before agreeing to terms.

Owner-operated versus professionally managed

If you and your family run the park, a buyer will add a market management cost when calculating NOI. This is standard underwriting, not a comment on your work. Parks already under third-party management usually transfer with less operational risk, which supports value.

Why we won't give you a revenue multiple

A simplistic multiple ignores expense load, infrastructure condition, seasonality, and capital needs. Any number produced that way is likely to be wrong in one direction or the other, and anchoring on it usually costs the owner either money or a year of their time.