The biggest problem for sellers (owners) and campground buyers is getting a realistic handle on the approximate value of a campground. (Note, I said, "approximate" because there is no definitive value of a certain campground.) The only reliable information a buyer or seller has is usually current listings. You get on the Internet and you can get the listing information even if it is sketchy and too often the value is determined by how your or the campground you are considering fits in to the listings. This is bad for both parties… the owner tends to think that his campground is higher in value than it is, and the buyer my pay too much for a campground and this can be devastating! The listing price tells you what the owner is asking, not what the campground will ultimately get! The info on the actual details of the selling price is hard to get and when you do get it, it may or may not be relevant to your campground. NOTE: This is why one of the key pieces of information in the Workbook www.campground-data.com/workbook.html are the actual sales details (date, gross, net, etc.) of campground sales.

True, the workbook is a good start, but without it what can you do. My first suggestion is stop and think! Common sense is required. Say you have $100,000 to invest. Other than a campground how much could you earn on that money? You can invest it in a sure thing like high quality bonds, CD’s and get $3 to $5,000 a year. Or go to more risky investments and you have a chance to get much more…. Say, maybe $10,000.

So what should a $100,000 (down payment) invested in a campground provide you? I think it should pay the mortgage. Let’s say it is a $500,000 deal. You put down $100,000 and finance $40,000 at 6.4% over 20 years. Those payments are about $35,500 for the year. So where are you? During that first year the campground (investment) paid down the mortgage principal about $10,200. This is real return. Also, assuming that the campground will pay the mortgage payments is has paid $6,650 in interest payment to allow you to pay the $10,000+ on the principal.

Is this enough? It may be, if the campground is a sure bet to grow. But, what about paying you to manage the campground? Well it better do that (or have the ability to do so fairly quickly). So the question is: How much? This is the real rub. A lot of you have worked 20 years in a good position and want to replace your income. Probably will NOT do that. But it should pay you a nominal management fee and pay a lot of your every day expenses (things you paid for out of pocket in your old job)… like utilities, insurance, etc.

So now you have a $10,000 return and a low paying job. Is that enough? It may be, especially if you have a real solid vision on a great future for the campground. But normally you do want to get paid a little more for the risk. Again, another rub… How much?

I am not going to answer that. I provide these thoughts to get you thinking about what is a common sense approach to the valuation of a campground. Think and you will learn and you will benefit!