My motorhome owner friends typically fall into one of two camps (pardon the pun): There are the “Planners,” who have researched their overnight stops far in advance and have made reservations at the best possible campsites. And there are the “Wingers,” who are more spontaneous travelers and are comfortable ‘winging it.’ To them, the specific campsite is less important than the flexibility to stop when tired, to avoid bad weather, or to stay at an interesting place longer than anticipated.
I admire the Wingers and not-so-secretly wish I could be one of them. But I’m not wired that way and prefer to have my timing and destinations pre-arranged. In part, this is because our vacation time is rather limited and we're always trying to fit the best campsites within a narrow window of opportunity. Therefore, my usual pattern is to use online resources and advice to identify campgrounds that offer beautiful scenery or a quiet setting (see this blog post), to make reservations months in advance, and to arrange our agenda so that the available resources are timed right. For example, if we want to spend a few days at a remote campsite without water or electricity, I make sure that our next stop allows us to replenish and rebalance with full hookups (electricity, water, sewer). If a planned stop is disappointing or the weather is uncooperative, we’re not unwilling to bail out of the agenda and wing it until we can get back to our plan. But . . . there’s always a plan.
Yet there are fundamental trends that are combining to make RV travel planning more difficult, especially if that travel involves scenic campsites, popular destinations, or peak vacation seasons. For years, RV sales and RV camping have been on the rise. The Recreation Vehicle Industry Association recently reported that the half million RVs sold in 2017 represent an increase of more than 17% compared to the previous year. And the 2018 North American Camping Report revealed that the number of people who camp more than three times each year has grown by 64 percent since 2014. Two-thirds of those camping nights are at privately owned RV parks or public park campgrounds. Unfortunately, these camping locations have been declining over the last ten years, thanks to a number of factors affecting the economics and stability of RV campgrounds.
The combination of fewer campsites for more campers is already having a clear impact on RV travel, even for Planners like me. Whether you try to reserve a campsite at a beautiful national/state park or a luxurious motorcoach resort, a long lead time (sometimes 6-9 months) is necessary if you want to reserve the best campsites for more than a few days during peak season. We’ve seen this when we’ve tried to arrange our annual summer trek to Colorado, where we would like to reserve at least two weeks at a single location that could serve as “base camp” – a hub for exploration for other places in the western U.S., while also being a great place to camp between those trips.
This summer, we will experiment with a new Colorado vacation model that is centered on this base camp concept, but freed from the difficulties of planning so far ahead. Knowing that our experiment would require a cash investment made us nervous; but knowing that we want to keep returning to Colorado each summer (as we have for the last 12 years) made the decision less painful. Our solution was to buy an RV lot at Tiger Run RV Resort, a few miles from Breckenridge. The local area has all sorts of options for hiking, biking, and kayaking, and there is something else that drew us to this particular campsite: the proximity (within a one-day drive) to hundreds of places that we want to visit in Colorado and neighboring states.
The advantage is obvious: we now have our base camp available whenever we want it. The economics are not so obvious: does buying a campsite that you will only be able to use 2-3 weeks each year make any financial sense? We deliberately looked for a location that was showing positive trends in property values and had a good rental model to help offset the monthly maintenance fees. We researched the rental history and learned that at Tiger Run, RV lots can easily be rented year-round. In the summer, people rent the RV campsites for vacations; in the winter, many of the renters work at the nearby ski resorts and use their RVs for inexpensive long-term housing.
We bought this property late last summer and have not stayed there yet – our first time will be in July. But after monitoring all the rental reservations over 12 months, it is already possible to calculate our net annual rental income (after subtracting the rental management company commissions). Our other expenses include homeowners association fees, utility bills, real estate tax, and tax on the rental revenue. And I can frame the final result for you by answering the basic question we asked ourselves: If the money we spent on purchasing this RV lot had instead been invested in our retirement fund, how much more money would we have earned this year? The answer surprised us. Our net rental income has exceeded our property expenses by a little over $6000, which is about the same as the interest we would have earned if the same investment had been made in our retirement account. Financially, this experiment has made sense through our first year of ownership.
And vacation-wise, does it also make sense? We originally reserved the entire summer for ourselves, leaving our lot unavailable for rent until we could pinpoint our travel timing. That finally happened about 10 days ago, and then we put the remaining summer time into the rental pool. Since then, 15 new reservations have been made, filling all but 14 days of the summer months. So we were able to choose our own vacation stay in peak season without jeopardizing our ability to rent out nearly all the remaining days.
Of course, it remains to be seen if this is a sensible arrangement in the long term. For an investment like this, the financial outcome depends on a number of key factors:
- the use model (the more you use the property, the less rental income it will generate)
- the popularity of the location for rentals throughout the year
- a good balance between expenses and revenue (monthly maintenance fees that are not too high, and nightly rental charges that are not too low)
- a management system with a good track record of property maintenance, site rental, and online marketing
- the cost of the purchase and the future outlook for the real estate value
In our case, limited vacation time maximizes our income from rentals, and Tiger Run is a popular RV destination in both warm and cold seasons. We also purchased one of the less expensive pull-through lots, which seem to have more short-term rental activity thanks to lower nightly rates and easier RV entry/exit. Future property values are hard to predict, though the selling prices of similarly sized RV sites at Tiger Run have been rising since we purchased last year. Regardless, the best part of the experiment is coming up very soon when we head west for our first summer camping trip. For this particular Planner, it’s looking like a pretty good plan.