Your RV park financials need to tell a clear, accurate story right now, especially if you bought between 2020 and 2022 at peak prices. That is just the reality. Occupancy was record high, interest rates were low, and sellers knew exactly what they had. You probably paid a multiple that made sense at the time, and maybe it still does. But the market has shifted. Debt costs are higher, operating expenses have climbed, and the post-pandemic camping surge has normalized. If your financials are not telling a clear, accurate story right now, you are sitting on a risk you may not fully see yet.
This is not doom and gloom. It is a call to get eyes on your numbers before someone else does it for you, whether that is a lender, a partner, or a buyer.
Here is what I look for when I work with park owners who acquired during the boom years.
Your NOI needs to be real, not optimistic.
A lot of operators track revenue well but get loose on the expense side. They forget to include a management fee even if they self-manage, they skip reserves for capital expenditures, and they leave out one-time costs that are actually recurring. If your NOI looks healthy on paper but you are always scrambling for cash, those two things are telling you something.
Here is what a clean NOI calculation actually includes. Total site revenue plus ancillary income, minus every operating expense including a management fee of 8 to 10 percent of revenue even if you manage it yourself, minus a capital expenditure reserve of at least 3 to 5 percent of revenue, minus property taxes, insurance, utilities, payroll, marketing, software, and any other recurring cost of running the park. What is left is your real NOI. Not the number that makes the park look good. The number that tells you the truth.
Why does this matter so much right now? Because if you ever need to refinance, bring in a partner, or sell, that NOI number is what drives your valuation. A buyer or lender will reconstruct it themselves using your actual documents. If your version and their version are significantly different, the deal either falls apart or reprices against you. Better to know your real number now than to find out at the closing table.
Your debt service coverage ratio needs room.
If you financed at peak prices with rates that have since risen, your DSCR may be tighter than it looks on the surface. Lenders want to see at least 1.25, and most prefer closer to 1.35 or higher. If you are sitting at 1.10 or below, you need to know that now and have a plan before your next refinance conversation.
Let me explain how DSCR works so you can calculate yours right now. Take your real NOI, the clean number we just talked about, and divide it by your annual debt service, which is your total principal and interest payments for the year. If your NOI is $180,000 and your annual debt service is $150,000, your DSCR is 1.20. That is below what most lenders want to see and it leaves you very little cushion if revenue softens or expenses spike.
If your DSCR is tight, you have a few levers. You can raise rates to increase NOI. You can cut expenses that are not generating value. You can add revenue through ancillary income or shoulder season capture. Or you can refinance into a longer amortization to reduce your annual debt service, though that costs you more over time. None of these are simple, but knowing your number is the first step to making a plan.
Your revenue mix matters more than it used to.
During the boom, parks could run on transient weekend traffic and still hit their numbers. That window is narrowing. I look at what percentage of revenue is coming from long-term stays, from shoulder season, and from ancillary income. If you are still 90 percent dependent on peak-season transient guests, your income is more fragile than your P&L suggests.
A healthy revenue mix in a maturing market looks something like this. Peak season transient at 60 to 70 percent of total revenue. Shoulder season at 15 to 20 percent. Long-term and extended stay at 10 to 20 percent. Ancillary income, storage, laundry, propane, cabin rentals, at 5 to 15 percent. Those percentages will vary by market and park type, but the point is diversification. No single revenue stream should be carrying the entire financial model.
If you do not know your revenue mix right now, pull your last 12 months of site revenue and break it out by month and by guest type. That one exercise will tell you more about your financial vulnerability than almost anything else you could look at.
Your books need to be audit-ready, not catch-up ready; your RV park financials need to shine.
If you had to hand your financials to a lender or buyer today, would they hold up? Commingled accounts, missing receipts, cash transactions that were never recorded, these are the things that kill deals and tank valuations. The time to clean them up is not when you need something. It is now, while you have runway.
Audit-ready books mean a few specific things. Your business accounts are completely separate from your personal accounts with no commingling. Every transaction has documentation, a receipt, an invoice, a bank record that ties back to what is in your books. Your revenue matches your bank deposits and your tax returns within a reasonable margin that can be explained. Your expense categories are consistent and logical so that someone who has never seen your books can understand what they are looking at.
If your books are not there yet, the path forward is not complicated but it does take time. Start with a bank reconciliation going back at least 12 months. Get every transaction categorized correctly. Make sure your chart of accounts reflects the actual revenue and expense categories of your business. If you are too far behind to do it yourself, hire someone to get you current. The cost of a cleanup is almost always less than the cost of a bad refinance or a repriced deal.
Buying at the peak was not a mistake. Not knowing where you stand right now is the actual risk. Get your financials in front of someone who understands this asset class and can tell you the truth.
If you want a second set of eyes on your numbers, that is exactly what I do.
Read this next: What a Lender Actually Looks at Before Approving an RV Park Loan
I cover the financial side of RV park ownership in depth in my book, ๐๐ฟ๐ผ๐บ ๐ข๐ณ๐ณ๐ฒ๐ฟ ๐๐ผ ๐ข๐ฝ๐ฒ๐ฟ๐ฎ๐๐ถ๐ผ๐ป: ๐ง๐ต๐ฒ ๐๐ผ๐บ๐ฝ๐น๐ฒ๐๐ฒ ๐ฅ๐ฉ ๐ฃ๐ฎ๐ฟ๐ธ ๐๐ป๐๐ฒ๐๐๐ผ๐ฟ’๐ ๐๐๐ถ๐ฑ๐ฒ ($49), including how to read your own financials the way a lender does. Available at wendipvifinancial.gumroad.com/l/kqmyb and on Amazon under my name, Wendi Rook.
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