Deal Analysis

RV Park Underwriting Guide

Learn how to analyze RV park deals like a professional investor. Master the metrics, identify value-add opportunities, and avoid common pitfalls.

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Essential Underwriting Metrics

The key numbers every RV park investor must understand before making an offer.

Net Operating Income (NOI)

Gross Revenue - Operating Expenses

The most important number. NOI excludes debt service and capex. Target 35-50% NOI margins for healthy parks.

Benchmark: 35-50% margin

Cap Rate

NOI ÷ Purchase Price

Measures yield on an all-cash purchase. Higher cap rate = higher yield but potentially more risk.

Benchmark: 7-12% typical

Cash-on-Cash Return

Annual Cash Flow ÷ Total Cash Invested

Your actual return on invested capital after debt service. The number that matters for leveraged deals.

Benchmark: 8-15% target

Debt Service Coverage (DSCR)

NOI ÷ Annual Debt Service

Banks require 1.20-1.35x minimum. Higher DSCR = more cushion for vacancies or repairs.

Benchmark: 1.25x+ preferred

Physical Occupancy

Occupied Sites ÷ Total Sites

Percentage of sites generating revenue. Distinguish between nightly, weekly, and monthly tenants.

Benchmark: 75-95% stabilized

Revenue Per Available Site (RevPAS)

Total Revenue ÷ Total Sites ÷ 365

Daily revenue potential per site regardless of occupancy. Useful for comparing parks.

Benchmark: Varies by market

Sample RV Park Underwriting

Walk through a real underwriting example for a 75-site RV park.

Revenue Analysis

Total Sites75 sites

Monthly Sites (50 @ $650/mo)$390,000

Nightly Sites (25 @ $45/night, 65% occ)$266,906

Laundry & Vending$12,000

Storage Rentals$18,000

Gross Revenue$686,906

Operating Expenses

Property Taxes$45,000

Insurance$28,000

Utilities (water, sewer, electric, trash)$72,000

Payroll (1 FTE + seasonal)$65,000

Repairs & Maintenance$35,000

Management Fee (if applicable)$34,345

Software & Marketing$12,000

Total Expenses$291,345

Investment Summary

Net Operating Income

$395,561

57.6% margin

Asking Price

$4,500,000

8.8% cap rate

Down Payment (25%)

$1,125,000

$3.375M loan

Cash-on-Cash Return

12.4%

$139,561/year

Underwriting Red Flags

Warning signs that require deeper investigation or walking away.

NOI margins below 30% without clear improvement path

Declining occupancy trend over past 3 years

Deferred maintenance exceeding 10% of purchase price

Environmental issues (underground tanks, contamination)

Zoning non-conformance or expansion restrictions

Single tenant representing >20% of revenue

Seller unwilling to provide T-12 or tax returns

Below-market rents with resistance to increases

Value-Add Opportunities

Signs of upside that can justify paying a premium.

Below-market rents with room to raise 15%+

Physical occupancy under 80% with strong demand

Unutilized land for expansion

No online booking or modern marketing

Manual operations that can be automated

Deferred amenity upgrades guests would pay for

Seasonal park that could extend season

Owner-operator retiring with no succession plan

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Related Investment Resources

Due Diligence Guide

Complete assessment framework

Cap Rates Explained

Understand valuations

Financing Options

SBA, conventional, private

NOI Improvement

Maximize your returns