So, You Want To Buy A Campground?
3 Questions To Answer Before You Do, & 3 Big Mistakes I Made On My First
3 Questions to Answer Before Buying Your First Campground
I have acquired 3 campgrounds in the last 3 years.
Based on my experience, these are 3 questions you should be able to answer clearly and confidently before buying your first campground.
Question #1: What are your goals?
This is a broad question and probably the most difficult question to answer. However, it is probably also the most important.
If your answer to this question is "to make money," I advise you to find a deeper motivation before proceeding.
This challenging business requires passion, motivation, and a clear mission to achieve sustained success.
Question #2: What do you want your role to be?
For example:
Do you want to live and/or work on-site?
Do you want to interact directly with customers?
Do you have advanced repairs and maintenance skills?
Or do you want to hire a staff and manage the managers from afar?
This will dictate the size/revenue you must find in a campground to operate profitably and sustainably.
The first big challenge you will face is figuring out the ongoing expenses for payroll, repairs, and maintenance.
Living on-site, assuming the role of manager, and/or handling repairs and maintenance yourself will greatly impact those figures.
Question #3: How long do you plan to own the campground?
The 2 biggest sources of risk in owning and operating a campground are related to your investment time horizon.
Is your plan to flip the campground? Fix it up and sell after a few years?
What type of debt, if any, will you be seeking to make the acquisition? What will the loan term (number of years on the loan) be?
If you plan to own the campground for at least 10 years, you have selected a lower-risk strategy.
Buying or selling always involves risk. A looming balloon payment tied to a maturity date on a shorter-term loan can force you to sell (or hand the property back to the bank if you can’t sell) and certainly involves risk.
If you feel comfortable answering these questions, now you’re ready to start forming your business plan (and ideally learning from the mistakes of others who have already done it).
3 Big Mistakes I Made When I Bought My First Campground
I jumped into the outdoor hospitality business without any prior experience, so naturally, I made many mistakes.
These were the 3 biggest mistakes by far:
Mistake #1:
I wasn't prepared. I thought buying a campground would be just a tiny bit more complicated than my prior investments in small apartment buildings.
In turn, I vastly underestimated how much work was required to run the campground. My misunderstanding set me up for lots of stress and frustration, and for quickly burning out from the long hours.
Although challenging, these stressful early months left me with these important takeaways:
Hospitality is HARD WORK.
Campgrounds are NOT real estate investments; they are complex businesses that require thoughtfully structured teams with defined roles and responsibilities, working towards a common goal.
Mistake #2:
I chose to get into a complex construction/redevelopment project without a qualified team already in place.
I bought the campground AND THEN worked to assemble the construction team. Doing so took far longer than I anticipated.
Almost 3 years later, it still feels like a work in progress. My lesson learned:
I should have performed a much more exhaustive search for contractors during due diligence before taking over operations.
Mistake #3:
I took too long to see how vital it is to become an active member of the local community.
I was overwhelmed with operating my campground while trying to assemble a construction team, so I ignored an important aspect of operating a hospitality business - networking locally.
Once I prioritized this, everything else got easier. My lesson learned:
Contribute to and participate in the local community; resources and opportunities will present themselves.
Avoiding these mistakes may be obvious to some, but these lessons learned are now central to how I approach scaling my business.
Thanks for reading!