When most people think of real estate investing, their minds go straight to single-family homes, multifamily apartments, or maybe mobile home parks. But there’s a rising asset class that’s starting to catch more attention from sophisticated investors: RV parks.
In a recent episode of Ritter on Real Estate, Kent Ritter sat down with Robert Preston, co-founder and CEO of Climb Capital, to talk about why he’s gone all-in on RV park investing. Robert’s journey from Marine Corps pilot to real estate entrepreneur provides not only an inspiring story but also a fascinating look at where new opportunities are emerging in today’s competitive real estate market.
From Flipping Homes to RV Parks
Like many investors, Robert’s path started with single-family flips. He then scaled into multifamily apartments and mobile home parks before discovering the untapped potential of RV parks around 2021.
His reason for pivoting? Competition. In the multifamily and mobile home park space, bidding wars were common, often driving prices millions above his underwriting. RV parks, however, were (and still are) far less saturated. This created opportunities to buy at cap rates in the 9–11% range, compared to the compressed yields found in other asset classes.
Why RV Parks?
According to Robert, RV parks stand out for several reasons:
– Less Competition: Fewer professional investors and institutional players are in the space, keeping pricing more favorable
– Lifestyle Synergy: Robert and his family are RV enthusiasts themselves. Many of his best deals came simply from camping trips where he struck up conversations with owners.
– Strong Returns: With in-place cash flow at high cap rates and multiple ways to add value, parks often deliver better risk-adjusted returns than apartments
Choosing the Right Markets
Robert emphasizes that RV parks are highly sensitive to seasonality and weather. His strategy is to target the “Sun Belt Corridor,” essentially from Arizona to the Atlantic between I-10 and I-40.
– Too far north? Parks sit empty in the winter
– Too far south? Extreme heat can drive occupancy down in the summer
– Best markets? Mid-South and Southeastern cities like Pensacola or Nashville, which benefit from both summer vacationers and winter snowbirds
The goal is simple: maximize year-round revenue with two strong peak seasons.
Operational Challenges and Barriers to Entry
Investing in RV parks isn’t without hurdles. Robert points to two main barriers:
- Management: Unlike multifamily, there aren’t many strong third-party operators in the RV park space. Successful investors must build their own vertically integrated management companies.
- Financing: Institutional lenders don’t yet fully embrace RV parks. That means most deals are financed through community banks, credit unions, or even seller financing—often with full recourse debt.
For investors willing to tackle these barriers, the payoff can be significant.
Creating Value in RV Parks
Robert highlights multiple ways to quickly boost NOI (Net Operating Income):
– Dynamic Pricing: Simply raising nightly rates from $38 to $45 created a 20% revenue increase with minimal pushback from guests
– Amenities: Adding reliable Wi-Fi, landscaping, pickleball courts, pools, or even golf cart rentals significantly enhances customer experience
– Expansion: Many parks sit on 40+ acres but only use a fraction of the land. Adding new sites can generate $5,000 per year per site, often recouping build costs in just two years.
Key Lessons Learned
After acquiring 14 RV parks nationwide, Robert has identified some critical takeaways:
– Scale Matters: Smaller parks struggle to support the payroll costs of quality on-site management. Larger parks provide the revenue needed to hire and retain great staff.
– Seasonality Is Key: Location dictates profitability. Avoid markets that can’t sustain year-round occupancy.
– Management Is Everything: As in any real estate investment, poor management can ruin even the best deal.
The Bigger Picture
Beyond returns, Robert is proud of the impact Climb Capital is having. What started as two partners raising capital has grown into a team of 50 employees. Many staff members have gone from tenants to managers to homeowners and even small-scale investors themselves.
His number one key to success? Grit. The ability to push through challenges and keep moving forward, no matter how tough the days get.
Final Thoughts
RV parks may not yet be mainstream, but that’s exactly why they’re such an attractive opportunity. With strong cash flow potential, less competition, and multiple value-add levers, they offer investors a chance to get in early on a growing niche.
As Robert put it, “It’s hard to raise rents 20% overnight in a multifamily deal. In RV parks, sometimes all it takes is updating a website.”
For those willing to take on the operational and financing challenges, RV parks just might be one of the most compelling real estate plays of the next decade.