High ROI Asset Class: RV Parks vs. Traditional Real Estate

RV parks are emerging as a hidden gem in U.S. real estate, often delivering significantly higher returns than more traditional asset classes like apartments, self-storage facilities, or retail properties. In the world of commercial real estate (CRE), cap rates – a key measure of yield – for RV parks commonly range from 8% to 12%, notably above those of multifamily or other sectors. This means a well-run campground can generate double-digit annual returns, a performance that handily outpaces many conventional CRE investments. The appeal lies in strong cash flows from diversified income streams and a surge in demand for outdoor travel, all of which have positioned RV parks as high-ROI assets for savvy investors.

RV Parks: A High-Yield Hidden Gem for Investors

Despite the size of the RV park industry – tens of billions in economic impact – it has remained relatively undiscovered by institutional investors, resulting in higher cap rates and ample value-add opportunities. In fact, around 90% of U.S. RV parks are owned by small operators with fewer than 5 properties. This fragmentation keeps competition from large funds low and yields high. For context, typical capitalization rates in 2025 for core asset classes are much lower (e.g. apartments around 5–7%, self-storage about 6–9%) while RV parks trade at 8–12% cap rates on average. Such elevated yields reflect both the strong income potential of RV parks and the higher perceived risk/operational effort involved in running them.

Key reasons why RV parks offer higher cap rates than other real estate assets include:

• Management Intensity: Running an RV park is more hands-on than managing an apartment or office building. Owners must handle daily operations like guest check-ins, facility maintenance, and hospitality services. This active management requirement deters purely passive investors, but it rewards those willing to put in the effort.

• Seasonality & Economic Sensitivity: RV parks experience seasonal demand swings and can be influenced by travel trends, fuel prices, and broader economic cycles. For example, a campground may be full in summer but quieter in winter, unlike an apartment with year-round tenants. Investors demand higher returns for these fluctuations.

• Limited Institutional Competition: Large investment firms have historically focused on “mainstream” assets like multifamily and office buildings. RV parks remained a niche opportunity, so there are fewer deep-pocketed buyers bidding prices up. This keeps acquisition prices relatively reasonable (and cap rates higher), especially for mom-and-pop parks that need improvements.

Thanks to these factors, RV park cap rates can be double those of multifamily or self-storage properties, offering attractive cash flow even in high-interest rate environments. In many ways, the RV park sector today resembles the self-storage industry of 20 years ago – a fragmented niche with outsized yields and consolidation potential. Early investors are finding opportunities to lock in high yields now, potentially benefiting from future cap rate compression (i.e. rising values) as the asset class gains wider recognition.

Diversified Income Streams Boosting ROI

One of the secrets to RV parks’ strong returns is their diversified revenue model. Unlike a typical rental property that might rely solely on monthly rent from tenants, a well-run RV park generates income from multiple streams, including short-term stays, long-term rentals, and ancillary sales. The primary revenue comes from renting out campsites or RV pads, which can be charged nightly for transient campers or monthly/seasonally for long-term guests. Many parks maintain a healthy mix – for instance, roughly 70% of sites on annual or seasonal leases and 30% for nightly travelers – balancing stable base income with higher-rate short-term stays. Nightly campsite fees can range widely (approximately $30 to over $100 per night, depending on location and amenities), while monthly rates for extended stays might be $300–$500, offering affordable long-term options.

Beyond site rentals, ancillary revenue streams significantly enhance profitability. RV parks often feature on-site conveniences and services that both improve the guest experience and add to the bottom line. Common examples include:

• Camp Stores & Essentials: On-site convenience stores selling groceries, firewood, propane, and camping gear. These not only provide additional income but also keep guests spending money on the premises.

• Amenities & Activities: Coin-operated laundry facilities, shower access fees, Wi-Fi upgrades, and recreational equipment rentals (bicycles, kayaks, golf carts) are typical add-ons. Parks may also charge for use of premium amenities like pools or clubhouses in some cases.

• Long-Term and Seasonal Leases: Offering seasonal contracts to "snowbird" RVers (who migrate south in winter) or annual leases for those who use the park as a vacation base guarantees steady cash flow across low seasons. These longer stays provide stability to offset the variability of tourist traffic.

• Upgraded Accommodations: Many campgrounds are adding cabins, cottages, or glamping tents to broaden their appeal beyond just RV owners Renting out a few furnished cabins or luxury tents at premium nightly rates can substantially boost revenue per site, attracting non-RV travelers seeking a unique stay.

• Extra Services & Events: Some parks host special events (concerts, festivals, holiday celebrations) or offer guided tours and outdoor activities for a fee. Others might monetize storage services (allowing RV/boat storage on-site) or even offer fee-based dump stations and vehicle services for travelers.

This diversification of income means that even if one segment (say short-term camping) slows down, other revenue sources help buffer the overall cash flow. For example, if off-season transient occupancy dips, a park might still collect steady monthly rent from long-term tenants and sales from its store. Industry data shows an average mid-sized RV park (around 90 sites) can generate several million dollars in annual revenue, with roughly 40% from nightly/weekly fees, 30% from monthly/seasonal rentals, and the remaining 30% from ancillary sources. Operating profit margins typically run in the mid-teens as a percentage of revenue for RV parks, and savvy owners can improve that by controlling costs and expanding high-margin services. In short, RV parks operate more like a hospitality business than a simple rental property, and this dynamic revenue model is a key driver of their high ROI.

Surging Demand for Outdoor Travel and Camping

Another factor fueling the strong performance of RV park investments is growing consumer demand for outdoor travel. Over the past decade, camping and RVing have exploded in popularity across the United States, broadening the customer base for campgrounds. Several trends are behind this surge:

• Broader Demographics: RV camping is no longer just for retirees. Millennials and Gen Z travelers are flocking to the outdoors in greater numbers, drawn by the freedom and affordability of the RV lifestyle analytics.loan. In fact, younger adults now make up a large segment of new RV buyers and campers. The average age of RV owners has been falling, and one survey found one-third of new campers in 2022 were millennials analytics.loan. This influx of younger enthusiasts has expanded the market and increased year-round demand.

• Remote Work & “Work-from-RV”: The rise of remote work has enabled professionals to work from anywhere – including campsites. Many people are taking advantage by embarking on extended “workcation” road trips, living and working out of their RVs for weeks or months at a time analytics.loan. Parks that cater to these digital nomads (with reliable Wi-Fi and quiet work areas) have seen guests stay longer and even fill sites during weekdays, smoothing out traditional seasonal dips.

• Post-Pandemic Travel Shifts: The COVID-19 pandemic introduced a new wave of campers seeking safe, distanced vacation alternatives. Families who might have flown to crowded resorts tried RV trips instead, often for the first time. This led to record occupancy at many RV parks in 2020–2021 analytics.loan. Even as regular travel resumed, a large number of people have stuck with RVing. For instance, 61% of Americans planned an RV trip in 2023, up from 48% the year before – a clear sign that interest in camping has remained elevated analytics.loan. The perception of RV travel as a flexible, family-friendly, and relatively safer way to vacation has created lasting demand that continues to benefit campground owners.

• Rising RV Ownership: On the supply side of travelers, RV sales have been robust. There are over 600,000 new RVs sold annually in the U.S., and RV ownership has increased by about 62% over the past 20 years. Each new RV owner represents a potential recurring customer for campgrounds. With more Americans investing in RVs for leisure or even full-time living, the need for well-equipped places to park those RVs has grown in tandem.

• Limited New Supply of Parks: While demand has surged, the development of new RV parks has lagged. Zoning hurdles, high land costs in tourist areas, and other barriers mean relatively few new campgrounds come online each year. Only about 11% of total RV park supply was built in the last decade, so most of the increased demand is being absorbed by existing parks. This imbalance (more campers chasing roughly the same number of campsites) allows owners to keep occupancy high and raise rates without losing business, further improving revenues.

Crucially, RV parks have shown a degree of resilience in economic downturns. During recessions or periods of tight consumer budgets, people often downshift from expensive vacations (like air travel and hotels) to more affordable road trips and camping excursions. An RV park stay – at maybe $40–$60 a night – is a budget-friendly getaway relative to traditional lodging, so campground occupancy can hold up or even get a boost when travelers seek cheaper options. This was evident in past recessions and again during the pandemic recovery. Thus, while RV parks are not entirely recession-proof, they tend to maintain solid occupancy even when other hospitality sectors struggle, providing a level of stability for investors.

All these demand drivers have combined to push average campground occupancies to healthy levels (often 60–70% annually, with peak seasons near full capacity in popular areas analytics.loan). Strong demand and limited supply give owners pricing power to increase daily rates and fees. In turn, this supports the higher income and cap rates that make RV parks so attractive financially.

Remote work and lifestyle trends have more people traveling by RV. Modern RV parks cater to this demand with amenities like Wi-Fi, helping maintain high occupancy and strong revenues even on weekdays.

Outpacing Traditional Real Estate Investments

When it comes to investment performance, RV parks have been outpacing many traditional real estate assets in recent years. The combination of high ongoing yield and growth potential often translates into superior overall returns. For example, some RV park investment groups target internal rates of return (IRRs) around 19–20% for their projects, along with 9–11% annual cash-on-cash returns to investors. These figures are considerably higher than the typical expectations for stabilized multifamily or office deals, which might aim for mid-teens IRRs and single-digit cash yields.

Even on a straightforward cap rate basis, the difference is clear. As noted earlier, a typical RV park cap rate of ~10%versus a 5% cap rate apartment building means an RV park generates twice the annual net operating income for each dollar invested. In practical terms, a $5 million RV campground could produce roughly $500k in NOI (net operating income) annually at a 10% cap rate, whereas a $5 million apartment might generate only $250k at a 5% cap. This higher cash flow can provide better cover for financing costs and more immediate income to investors. Notably, in today’s environment of higher interest rates, owning properties with strong yield has become even more important – many multifamily investors are finding their debt interest rates now exceed their property yield, squeezing cash flow. RV parks, with cap rates often in the high single or low double digits, can still deliver positive leverage, where the cost of debt is below the asset’s return, resulting in healthy cash flow margins.

Moreover, RV parks offer some inflation-hedging advantages similar to other short-term stay assets (like hotels). Owners can adjust nightly rates, seasonal fees, and other charges on the fly in response to market conditions, effectively repricing the real estate income in real-time. This agility can lead to NOI growth that outpaces that of properties locked into annual leases. Alongside that, the booming demand has enabled many campgrounds to raise rates annually without sacrificing occupancy, bolstering revenue growth for owners.

It’s also worth noting the potential for capital appreciation. If the RV park sector continues to mature and attract more institutional capital (as self-storage did in the past), cap rates could compress over time for quality parks. Early investors stand to gain not just from operational cash flow, but also from an increase in asset values as the perception of risk declines and valuations rise. Indeed, we’re already seeing top-tier RV resorts in prime locations trade at cap rates in the 6–7% range (higher prices relative to income) as competition heats up for those assets analytics.loan. Still, the majority of ordinary RV parks trade at much higher yields, leaving plenty of room for attractive returns today.

Value-Add Opportunities and Upside Potential

Part of what makes RV parks so compelling is the ability for an investor to add value and quickly boost returns. Many campgrounds, especially those developed decades ago by families or small operators, have untapped potential – whether through physical upgrades, operational improvements, or marketing and management enhancements. Investors who acquire these underperforming parks can implement strategic changes and often raise the net income substantially, driving cap rates (on cost) into the double digits.

For instance, some experienced RV park investors look to buy properties at an initial 7–8% cap rate and then improve them to above 10% through capital improvements and professional management analytics.loan. This might involve relatively straightforward upgrades: adding more RV pads on excess land, installing new amenities (modern bathhouses, playgrounds, high-speed internet) to justify higher rates, or improving the online presence and reservation system to increase occupancy. Because many mom-and-pop owners haven't fully optimized their parks, the upside from even basic improvements can be dramatic. One operator notes they aim for a clear path to an ~11% yield on cost after renovations when acquiring a park with some long-term tenant base. In more rural markets, they might even purchase at a 9–10% going-in cap with the goal of pushing yields past 12% post-improvement.

Some common value-add strategies in RV park investments include:

• Modernizing Facilities: Upgrading electrical hookups to accommodate larger RVs, paving roads, enhancing landscaping, or renovating dated bathrooms/shower houses can attract a higher-end clientele and allow for higher nightly fees.

• Adding Amenities & Sites: Each new amenity can open a new revenue stream or justify premium pricing. Installing a swimming pool, dog park, or event pavilion can set a park apart. Converting unused land into additional RV sites, cabin rentals, or storage areas directly increases capacity (and revenue)analytics.loan.

• Professional Management: Replacing informal operations with systematic management often boosts the bottom line. This might involve trained on-site managers, better marketing (SEO, social media, listing on RV travel platforms), dynamic pricing for peak vs. off-peak, and loyalty programs for repeat campers. Such changes can improve occupancy and customer satisfaction, leading to higher income.

• Expense Optimization: Experienced investors scrutinize costs for savings – for example, installing energy-efficient lighting and water systems to lower utility bills, or leveraging technology for reservations and check-ins to reduce labor needs. Because many small park owners run things in old-fashioned ways, new owners can often trim expenses and raise net profits without harming the guest experience.

Thanks to the fragmented ownership in this sector, there is significant room for consolidation and operational turnarounds. It’s not uncommon to find a family-run campground that hasn’t raised its rates in years or lacks online booking capabilities – a new investor can acquire such a property at a high cap rate and, with some effort, realize even higher returns by bringing the park up to modern standards. This ability to force appreciation through improvements is a big advantage of RV parks compared to, say, buying a fully stabilized Class A apartment where income is already optimized (and cap rates accordingly low).

Operational Considerations and Risks

While the upside of RV parks is compelling, investors should go in with eyes open about the operational aspect. Owning an RV park is often described as running a hybrid between a real estate investment and a hospitality business analytics.loan. Unlike a typical apartment where tenants sign annual leases and mostly take care of themselves, campground guests come and go frequently and expect a positive vacation experience. This means day-to-day management is critical to maintain occupancy and revenue:

• Staffing and Management: Most RV parks require on-site staff for tasks like guest check-in, grounds maintenance, cleaning facilities, and customer service. Small parks might be run by an owner-operator couple, but larger parks often need a dedicated team (e.g. a manager, maintenance crew, office personnel). Investor-owners who cannot be on-site will typically hire a property manager or use a third-party management company specializing in campgrounds. According to industry experts, at least a couple of full-time staff are recommended even for mid-sized parks to keep operations smooth.

• Marketing and Reservations: Filling an RV park to its optimal capacity doesn’t happen automatically. Successful parks invest in marketing – from maintaining a strong online presence and positive reviews to listing on popular campground booking platforms. Many are adopting modern reservation systems (including online booking and dynamic pricing) to maximize bookings. Efforts like social media marketing, SEO targeting camping travelers, and even running campground events or loyalty programs can meaningfully impact occupancy rates throughout the season.

• Seasonal Fluctuations: By nature, most RV parks have high seasons and low seasons. Owners must budget and plan for the slow periods. This might involve offering off-season discounts or monthly rates to attract snowbirds and full-time RVers during winter months, or using the downtime for park improvements. In regions with harsh winters, some parks even close for part of the year, so managing cash flow across the year is important.

• Maintenance and Infrastructure: While RV parks don’t have large buildings to maintain, they do have extensive infrastructure – electrical and water hookups, septic systems or sewer connections, roads and pads, and communal facilities. Keeping these in good repair is vital for safety and guest satisfaction. Unexpected issues (like a water line break or power outage) must be handled promptly to avoid revenue loss. Preventative maintenance can go a long way in avoiding major expenses and park downtime.

• Regulatory Environment: Campgrounds must comply with a range of regulations – local zoning laws, health and safety codes, environmental regulations (especially if near sensitive natural areas or waterways), and sometimes special requirements like permits for operating a RV park or selling propane. While generally manageable, these add another layer of complexity compared to typical residential investing.

The need for active management and niche expertise is precisely why RV parks offer higher returns as compensation. Investors should approach this asset class prepared to either be hands-on operators or to enlist experienced professionals to run the park. The learning curve can be steep for newcomers (understanding the campground customer, managing reservations, dealing with campground utilities, etc.), but the reward for running a tight ship is a property that can outperform most others in cash flow. Essentially, the business-like nature of RV parks means you have more levers to pull to increase value – and if you pull them well, the market will reward you with higher income and property value.

Conclusion: Big Yields in a Niche Asset Class

RV parks have solidified their reputation as a high-ROI asset class, offering a combination of strong yield and growth that few traditional real estate investments can match. With cap rates frequently in the 8–12% range – and value-add projects pushing returns even higher – well-run campgrounds are delivering cash flows and investor returns that outshine the likes of apartments, offices, and self-storage facilities analytics.loan. This performance is underpinned by diverse revenue streams (nightly rentals, seasonal leases, ancillary sales) and the tailwinds of America’s love affair with outdoor travel. The post-pandemic camping boom, rise of remote work adventurers, and long-term growth in RV ownership have created a robust demand environment that savvy investors are capitalizing on.

Of course, RV park investing comes with its own set of challenges – from operational intensity to seasonal variability – but those willing to embrace the niche have found it richly rewarding. Many investors report acquiring parks at high cap rates and then unlocking even more value through improvements, achieving returns that handily outpace traditional CRE benchmarks analytics.loan. As the sector gradually gains attention, early movers are effectively taking advantage of the yield premium before broader institutional capital floods in.

In summary, RV parks represent an exciting opportunity for yield-seeking investors in the U.S.: a chance to own income-generating real estate that benefits from lifestyle trends and yet isn’t overcrowded by big money competition. With thoughtful management and strategic enhancements, an RV park can transform into a cash-flow powerhouse, making this “hidden gem” asset class shine brightly in a balanced real estate portfolio. For those chasing high ROI, it may be time to park some capital into RV campgrounds – where adventure and investment returns go hand in hand.

Sources:

• analytics.loan – U.S. RV Park Industry Trends & Investment Performance Data

• RoverPass – RV Park Cap Rates and Financial Comparisons with Traditional CRE

• Tyler Cauble (The Cauble Group) – RV Parks & Campgrounds: Hidden Gems of Real Estate Investing

• Axia Partners – Beyond Traditional Real Estate: The Case for Investing in RV Parks

• Terrydale Capital – Exploring the Investment Potential of RV Parks

• Booking Ninjas – Understanding the RV Park Business Model and Revenue Streams

• Campground Views – RV Industry Outlook, Demand Growth, and Park Performance Metrics

• KOA (Kampgrounds of America) Annual Reports – Camping & Outdoor Hospitality Trends in the U.S.

• CBRE & Marcus & Millichap Reports – Cap Rate and Valuation Benchmarks for CRE Asset Classes

• National Association of RV Parks & Campgrounds (ARVC) – Industry Statistics and Operational Guidelines

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