Zoning Permits are two words that can strike fear into CRE investors and make developers cringe. Although they’re usually viewed as a pain because of all the red tape that accompanies them, establishing good relationships with municipalities will help make the process easier. .
Zoning can be especially frustrating if you’re looking to buy land or develop your own land into an RV park. You have acres of land (usually in a rural setting) where you want to create spaces for recreational vehicle enthusiasts to rent out. However, it’s not as simple as throwing some plumbing and electrical in the ground and calling it a day. Because an RV park is a commercial business, you must register with the government. You also have to abide by relevant commercial zoning laws.
The good news is we’re here to point you in the right direction and give you the commercial zoning basics to start your RV park. One important clarification:RV and mobile home parks are not the same and should not be confused. Our article about how to start an RV park goes into further detail, but the main difference is that mobile home parks are intended to be long-term residential areas, while RV parks are designed for more short-term stays. This distinction is important because it can mean the difference between needing commercial vs. residential real estate zoning permits.
While you might think it should be a straightforward answer, the type of zoning you need to start an RV park varies depending on your municipality. Also remember that zoning is separate from any private campground regulations you might need to adhere to if you buy an RV franchise.
Each jurisdiction has its own laws as to what classifies an RV park, depending on what you will offer your guests. Most states require RV parks to have either a commercial zoning permit, recreational zoning permit or both.
The first step before you start thinking about developing is to check with your local health and environmental agency to ensure the project is legal. After that conversation, following up with an experienced real estate attorney is recommended to ensure you are not liable for anything.
Chances are, if you own (or are about to own) a piece of land large enough to house an RV park, the land is currently permitted for agricultural or residential use. You’ll ultimately need to make sure it’s zoned for whatever your municipality deems appropriate for RV parks. In most instances, this is a semi-painless process. You fill out a few forms answering questions about how exactly you’ll be using the land, pay some processing fees, then wait to hear back.
However, we all know that the wheels of the government don’t always run so smoothly. There’s a good chance that some portion of your intended land use doesn’t fit with zoning regulations. Or, it could be that your local legislature hasn’t fully classified what an RV park is and what zoning ordinance it falls under. There could be many unique scenarios that might require you to have a public hearing to request a zoning variance. Zoning variance hearings are typically a formality and inconvenience you more than impede your overall plans.
The moral of the story is to always give yourself a time cushion when it comes to changing the zoning code. Not doing so can result in some very upset contractors that have to wait around to break ground on your project.
Your best bet to find land pre-zoned for an RV park is to buy an existing one. The next best move is to look into campgrounds or similar types of commercial land.
Thanks to a vast amount of commercial real estate resources online (like Loopnet), it’s never been easier to connect with real estate professionals and find RV parks throughout the country. They can also connect you with open-use land with the zoning you need.
While every state has different regulations, in most cases, health and environmental agencies lump RV park regulation with that of campgrounds. For a sample,you can check out Michigan’s EGLE (Department of Environmental Great Lakes and Energy) Drinking Water and Environmental Health’s legislation governing campgrounds to get an idea of what some common requirements for RV parks might be. Before you start your RV park site plan, consider these typical requirements.
It’s common sense, but you’ll need a way for your RV guests to enter and leave your premises. The roadways must meet the construction criteria designated by the local government and must be kept clear at all times.
There are different codes for the type of campground service you provide. For RVs, the parking spaces for RVs must meet specific size requirements.
A registered RV park must have some sort of toilet on the grounds. Depending on what style of park you want (modern or primal), you at the very least need to provide a privy/portable toilet (a toilet without running water). At most, you’re looking at a bathroom. With toilets comes some sort of sanitary station. A sanitary station can be as little as a sink with soap to a shower facility, depending on the designation of your RV park.
Your guests will need access to potable (drinking) water. This can come in the form of connecting to municipal water systems or drilling your own well.
If you have toilets on site, you’ll also need a wastewater system. It can be public sewers (if available) or septic systems. All water and wastewater systems must be up to code.
Disposal of garbage and refuse must be in accordance with state and local law, ordinances, and rules. That means you have to have some plan to regularly haul away trash without attracting wildlife, pests or causing public health threats.
Like any other business, there has to be someone there to ensure everything runs smoothly and your guests (and public health officials) are happy. You’ll need at least one manager that guests or state officials can contact, on and off duty, if any issues occur.
Every RV park business plan needs to reflect the associated costs. Like any other commercial real estate endeavor, there can be some hidden expenses. Here are some to consider.
Aside from zoning permit fees, be conscious of other fees related to starting or purchasing an RV park. In most states, you must obtain a license (or transfer a previous license) for campgrounds/RV parks. The fees associated with these licenses usually go up proportionally with the number of sites you offer, and you must renew them annually. But before you pay any of those fees, you’ll need to pay construction fees to begin construction or modify existing grounds.
A significant cost that you should not overlook when you’re writing up the budget in your business plan is insurance. With (hopefully) thousands of guests entering and exiting your grounds every year, there are bound to be some accidents. You’ll want to spring for quality liability insurance in case of unfortunate accidents.
Finally, let’s not forget about taxes. Aside from the standard income and property taxes you’ll be paying you might have to pay an additional resort tax, also known as a tourist tax. The amount of these taxes varies state-to-state depending on the law. For example, Los Angeles county charges a 12% Transient Occupancy Tax, also known as a “bed tax,” which the government takes from the rent charged.
As mentioned above, you will need at least one manager (and likely some other employees) on the payroll to ensure your park is operating correctly. Additionally, make sure you budget for maintenance such as trash removal and occasional repairs. Lastly, factor in utilities.
Part of the due diligence process in commercial real estate construction is to obtain an Environmental Site Assessment (ESA). There are two ESA tests (phase I and phase II). Phase I looks at land ownership records for past uses both at the site and nearby to determine if harmful contaminants could be present in the land, and lenders typically require them. Phase II is where geologists will perform actual tests to see if contaminants are present.
To comply with the Comprehensive Environmental Response, Compensation and Liability Act (CERCLA), complete at least a phase I ESA. This measure can protect you from having to perform costly environmental remediation after you build your park, and protect you from litigation imposed by your guests that would experience ecological harm.
While it might not be a direct cost or threat to your park, it’s also essential to understand the land your park is on and that which surrounds it. Nature is constantly changing. Be conscious of any environmentally protected areas surrounding your RV park that could creep into your land over time. These shifts could occur for various reasons like endangered species migration or weather patterns. Studying protected land maps along with flood and fire maps will give you a better understanding of whether you’re building your RV park in a safe area.
How big or small your RV park might be is entirely up to you. Before you start dividing up your land for RV sites, you’ll again need to check your local zoning laws. Some counties limit the number of RVs per acre to 10 to 15, creating a minimum acreage per site. Whether or not your particular municipality does or doesn’t enforce this, it’s a good benchmark for your park. According to camping experts KOA, motorhomes and 5th-wheel pull trailers need anywhere between 10 and 45 feet of space. Based on those figures, each site should ideally accommodate a 45-foot RV, giving a 12-foot width for maneuverability (the average width of an RV is 8 to 10 feet), unless you plan to divide your park by vehicle size.
The most critical factor to consider is how much revenue you’re looking to take in each year. A large park will house more guests, but initial building costs and long-term overhead will increase. Assuming you have the option to determine the size of your park,, make sure you have enough RV spaces to recoup your investment within a reasonable amount of time so that you may start to see profitable returns.
Texas is a popular place to develop RV parks, so we wanted to use the state as an example of some obstacles you might face. If you’re building on one or more acres of land, you must obtain a general stormwater permit from the Texas Commission of Environmental Quality (TCEQ). However, if you’re building on or around the Edwards Aquifer, additional requirements may apply. For more information on building an RV park in Texas, check out the TCEQ website. In general, requirements to build an RV park in Texas are similar to most states.
Florida is the second largest tourist state in the nation, after California. There are many RVers coming in and out of the state, and many opportunities to start a profitable destination for them. Chapter 513 of the Florida Statutes covers ordinances for mobile home and recreational vehicle parks. Be sure to read them over with your attorney and also check the local municipality to ensure your RV park is up to code.
If you’re a seasoned CRE investor who has worked with developers, an RV park can deliver an excellent return on your investment. The great benefit about a CRE investment such as this is that you have flexibility as to the size and location, as most RV parks are in rural areas. Also, RV parks can typically be set up more quickly and have less overhead than a hotel or multifamily housing. As long as you have done your due diligence and secured the right capital partners, RV parks can be a great addition to your portfolio. But before kicking off your project, make sure you are familiar with the local zoning ordinances.
