The value of campsites varies according to the facilities and amenities that they offer as well as on their location. Local research is the best option for answering the question ‘how much is a campsite worth?’ We take a look at what you need to consider when trying to calculate this cost.
Different Types Of Campsites
When considering how much a campsite is worth there are many things to factor in. First of all, are you considering an established campsite or one that is going to be built from scratch? There will be different levels of costs associated with either option.
Another consideration is the level of campsite and the facilities on offer. This could be anything from a basic RV campground to a luxury one with everything campers would need.
Costs To Consider For A Campsite
So to break down what costs to take into account let’s look at both an established campsite and one that is to be built from scratch.
An established campsite is one that is operational and has been doing business for a couple of years at least. This is potentially an easier option for anyone who is new to the business as there is less to do in the initial stages.
But of course, there are costs associated with purchasing an existing business, and we’ll take a look at these now, so you know what to expect.
An existing infrastructure and operational business will cost you anywhere from $100,000 to more than $2 million. That’s quite a range but when you consider the variety of options and what is included you’ll understand why this is the case.
You’ll be purchasing the land that the campsite sits on, the established business as well as all the infrastructure and equipment associated with the campground.
Location will play a part in how much you pay per acre for the land with some locations costing more than $10,000 per acre for desirable lots.
The cap rate is what you use to work out how long it will take you to break even from your initial investment. To work this out take the net operating income (NOI) and divide it by the value of the property.
If the property is worth $500,000 and NOI is $45,000 then your cap rate would be 9%. Cap rates may range between 5% and 15% but most operate in the 8% to 11% range. It is necessary to compare the cap rate of your campsite to those in the surrounding area.
Cap rates will vary depending on location so while 9% may be good in one state it may not necessarily be good in another. Always compare like with like for a true estimate.
What you pay for your insurance will vary, but it is a necessary expense and one that you need to take into your valuation calculations. An average campground may spend between $450 and $1,500 annually on insurance.
The cost of renovations will vary depending on the condition of the campsite which should in any case be reflected in the price. Budgeting for renovations should include any hidden costs which are not immediately apparent such as bringing electricity up to code.
Campsite Built From Scratch
If you have a vision for a campsite and can’t find an established one that matches, you may want to build from scratch. By going this route there are more costs to consider.
The price of land varies depending on where in the country you are hoping to build your campground. On average however, land costs $3,000 per acre.
License & Permits
The requirements for building a campsite will vary depending on the state you are in, but there will be a need for licensing and permits.
Cost Per Site
The number of sites or pitches in the campground will dictate how much you’ll have to spend. It will also depend on the level of amenities you are intending to provide. Costs can range from $15,000 to $50,000 per site. This can include gravel roads, pads, and full hook-ups.
Most campsites include outlets for 110/120 volts as well as options for 15 amp, 30 amp or 50 amp. Costs range from $1,500 to $2,500 per pitch.
Hooking up to city water costs on average $1,200 per site while if you need to dig a well this can set you back between $5,000 and $12,000 without the cost of the pipework.
The level of amenity you provide for waste will have a major impact on cost. A site by site septic system will cost more than $40,000 as it requires a tank and leach field. A dump station will reduce costs by 75%, but you won’t be able to charge as much per night.
Providing gravel roads and pads for sites will be another major outlay with costs depending on the size and number of pitches.
Number Of Pitches
The average number of pitches is around ten per acre. Each individual site will cost on average $15,000. To calculate the overall cost multiply the total number of acres by ten and then by $15,000.
An office will cost between $100 to $550 per square foot and will be necessary for you to manage reservations.
One of the most important features that guests look for at a campsite are clean restrooms with good water pressure. This will set you back around $20,000 but will be a sound investment in the long term.
Another vital investment for a campground is high speed internet. This is now considered an essential service and the majority of RV owners expect it at campsites. It’s possible to get a good download speed for around $250 per month.
Even with more rural locations you shouldn’t have to pay more than $500 a month for internet. Initial set up with routers, Wi-Fi repeaters and ethernet may cost around $3,000.
Revenue From Different Types Of Campsites
So how much can you expect to earn from a campsite, whether that is an established and existing business or one you build from scratch?
A budget campsite or state park campground is perhaps the most basic for getting back to nature. These will have minimum amenities such as just a flat parking spot while others may have restrooms, showers and electricity hook-ups. Costs vary from $15-$40 per night.
One of the most popular, the mid-range campsite will typically have a pool, general store, playground and a shared fire-pit. Costs vary depending on location but will normally be between $30-$50 per night.
Luxury campsites are more akin to resorts and can have great facilities such as heated pools, spas, marinas, clubhouses and gyms. The average cost of staying at a luxury campsite will vary depending on location but is typically between $60-$100 per night.
We hope this guide to how much a campsite is worth has been helpful and that you have found it informative.
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