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MONTHLY VS.
DAILY IN RV TENANT OCCUPANCY
by Frank Rolfe
When first buy an RV park, you
assume that everyone will check in for a night or two, and then be on
their way. However, you soon find out that customers’ needs are anything
but that simple. Many RV owners intend to stay in one spot for an
extended period The reasons include:
-
Temporary relocation due to working on a project
(building a Walmart, etc.)
-
Staying near a hospital during a surgery and
recovery
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Permanent tenancy in a RV (primary residence)
-
Temporary relocation due to winter weather
(“snowbirds” that go south in the winter)
-
Folks who are traveling in their RV but like to
stay in one spot during the whole vacation.
Although daily rates of $20 or
more look attractive to you in these instances, they don’t look that
great to the customer. Especially is you are in a market where a monthly
lot rent in a mobile home park goes for $150. As a result, it’s
important to have a special rate package just for this unusual but
common subset of customers.
If you have mobile homes in your
park that are permanent and paying you lot rent, then the fair thing to
do is to offer this same rent to the RVs, provided that they will agree
to stay for at least a month and set up and pay their own utilities –
just like a mobile home customer.
If you do not have any mobile
homes in your park, then you are going to have to do some research to
find out a fair rent. Call all of the mobile home and RV parks in your
market to see what they charge “by the month”. You will have to remain,
to stay competitive, in this price range. However, if you have some real
additional benefit, such as lake frontage, you can probably go higher
according to how desirable your park is. Be sure and ask what utilities
are included in the monthly rent – you need to compare apples to apples.
When suggesting that the RV
customer move into a “by the month” lot, be sure to use the price as the
big driver in your sale. If daily is $20, and monthly is $200, then the
RV customer will save $400 per month (minus electricity) by changing
over to a monthly situation. This is compelling to almost everyone!
Of course, it is important to
leave your most desirable “overnight” lots available, if possible. These
lots are what attract new customers. Tell the monthly RV customer that
those lots are reserved for true overnighters. Don’t tie up these choice
lots on a monthly basis – you will actually lose customers as a result.
What are the benefits of
“monthly” RV customers over “daily” to you as park owner?
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Stability of cash flow. $20 a day is O.K., if it
happens every day. If it only happens for one day every month, then
$150 or so looks even better.
-
Reduced damage. The number one cause of problems
in an RV park is what happens when RVs move in or out. That’s when
utilities get run over and ruptured, and ruts put in the ground.
-
Barrier to moving, after a while. If you’ve done
a good job, you will just be too “easy” to consider moving to
another RV park, even at a lower price. Sometimes on monthly RV, the
city will require the tenant to “hardwire” the power service to the
home, making it more like a permanent structure than an RV. Plus
many RVs skirt their RV over time to improve pipe freezing problems,
etc.
There is no better feeling than
knowing that you have enough RV park revenues in just the “by the month”
customers to pay your bills and note payment. The daily RV side of the
business can be the gravy.
So be sure to convert your
customer to the appropriate monthly opportunity – before someone else
does! |
