RV park capital expenditures are the expense category most new owners forget to budget for until it starts quietly wrecking their cash flow. You did the math before you closed. You looked at the T12, built your pro forma, stress-tested your occupancy, and felt confident in the numbers.
Then you got into year one and something started eating your cash flow. Not dramatically. Not all at once. Just a slow, steady bleed that your pro forma never accounted for.
For a lot of new RV park owners, that bleed comes from the same place: deferred maintenance and capital expenditure they did not budget for because the seller never flagged it and the broker package never mentioned it.
This is not a due diligence failure. It is a budgeting failure. And it happens to smart, prepared buyers all the time.
Here is what tends to get missed.
The stuff that was already aging when you bought it
Every RV park comes with infrastructure that has a lifespan. Utility pedestals. Septic systems. Water lines. Roofs on any structures. Gravel roads. The electrical panel in the laundry building nobody has touched in fifteen years.
None of that shows up as a line item on the T12 because the previous owner was not replacing it. They were patching it, deferring it, or ignoring it entirely. That is often why the park was for sale.
When you close, you inherit every deferred decision they made. The clock does not reset. The pedestal that was already ten years old on closing day is still ten years old. And when it fails, it is your cash flow that covers it.
What a realistic RV park capital expenditures reserve actually looks like
Most buyers who do include a CapEx line in their pro forma use a number that feels reasonable. Somewhere between one and three percent of revenue. Sometimes a flat number like $10,000 or $15,000 a year.
That is almost always not enough.
A realistic CapEx reserve for an RV park depends on the age and condition of the infrastructure, the number of sites, and what is due for replacement in the next three to five years. If the park has aging pedestals across 80 sites and each one costs $400 to $600 to replace, that is a $32,000 to $48,000 project sitting in your future. That is not a pro forma line item. That is a capital event.
The way to budget for this correctly is to do a capital needs assessment before you close, or immediately after, and build a realistic replacement schedule. Not a guess. An actual inventory of what exists, how old it is, and what it will cost to replace.
The operational expenses that only appear after you own it
Beyond capital items, there is a category of operating expenses that simply does not exist in the seller’s numbers because the seller was not running the park the way you are going to run it.
If you are adding a manager where the previous owner self-managed, that is a new expense line. If you are upgrading your booking software, adding a website, switching to a professional payroll service, or actually budgeting for liability insurance at a realistic level, those are new expenses that your pro forma inherited from a business that did not have them.
This is especially common in mom-and-pop acquisitions. The seller ran lean because they lived on the property, handled everything themselves, and had relationships with vendors going back twenty years. You do not have any of that. Your cost structure is different and your pro forma needs to reflect yours, not theirs.
What this costs you if you get it wrong
If you underbudget CapEx and operational expenses by $30,000 to $50,000 in year one, and your projected cash flow was already modest, you are not just short on cash. You are making decisions under pressure. Deferring maintenance you should be addressing. Skipping the reserve contribution because you need the cash for operations. Starting a cycle that looks exactly like the one the previous owner was already in when they sold to you.
I recently talked to a client who made this exact mistake. He is now selling a park he very recently purchased because he does not have the budget for the needed CapEx and the income will not come close to covering it. I cover this scenario in detail in my book, including it as one of the mistakes that cost people everything, because it is not a rare story. It is one I keep hearing.
The park is the same. The problem is the same. The only thing that changed is whose name is on the loan.
The fix
Before you close, ask for a capital needs assessment or hire someone to do one. Build a CapEx reserve into your pro forma that reflects actual replacement costs on a realistic timeline, not a percentage guess. And when you are reviewing the T12, ask yourself not just what the seller was spending, but what they were not spending that you will have to.
The expense categories that wreck year one are not usually surprises. They are just the things nobody put in the spreadsheet.
Read this next: Ignore This Number and Your RV Park Will Cost You Money Every Single Month
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