How to Read an RV Park's T12 Before You Make an Offer

Start with three numbers: total revenue, total expenses, and the expense ratio. If the expense ratio is under 40%, someone is underreporting costs or skipping deferred maintenance. If it's over 65%, the operator is either mismanaging the property or hiding a labor-heavy business model that won't scale. Everything else in the T12 exists to explain those three numbers.

Don't trust the bottom line until you've checked the top

Most buyers jump straight to NOI. That's backwards. Break revenue into its parts first: site rentals, private lot leases, storage, propane, laundry, store sales, and any amenity fees. A park pulling 70% of its income from short-term site rentals carries more seasonal risk than one with 40% from long-term lot leases. If the seller only hands you a single "total revenue" line with no breakdown, ask for it broken out by category. That single request tells you more about the seller's bookkeeping discipline than anything else in the package.

Match the monthly pattern to the season, not the average

RV parks don't run at a flat occupancy rate. Most swing from near 100% in peak summer and holiday weekends down to a fraction of that in winter, depending on climate and drive-to markets. When you look at the T12, plot occupancy and revenue month by month instead of relying on the annual average. A park showing 55% average occupancy could mean steady mid-70s year-round, or it could mean 95% for four months and 25% for eight. Those are very different businesses with different debt service risk. If you want the mechanics behind why this swing happens, this breakdown of summer versus winter occupancy patterns is worth reading before you build your model.

Look for expense lines that don't move with the season

Payroll, insurance, and utilities should flex with occupancy to some degree, especially payroll in a seasonal market. If payroll stays flat at $9,000 a month in January and July, either the operator is overstaffed in winter or understaffed in summer. Both are fixable, but both change your first-year budget. Property tax and insurance are usually fixed, so don't penalize the T12 for those. Repairs and maintenance is the line to scrutinize hardest. A T12 showing $4,000 a year in R&M on a 60-site park almost always means deferred maintenance is sitting off the books, waiting for you to inherit it.

Run the cap rate math, then ask what it's hiding

RV park cap rates commonly land between 7% and 12%, wider than most commercial real estate because the operational intensity varies so much park to park. A 10% cap rate isn't automatically a good deal, and an 8% cap rate isn't automatically expensive. The spread reflects how much hands-on management the NOI depends on. Ask yourself: is this NOI built on a lean, well-run operation, or is it propped up by an owner-operator working 60 hours a week for free? If the seller's labor isn't reflected in the expense line, back it out and re-run the numbers with a market-rate manager before you trust the cap rate.

Be honest about growth assumptions

The post-pandemic occupancy surge in outdoor hospitality was real, but it was an anomaly, not a trend. Industry forecasts point to flat occupancy growth, roughly 0% to 1% a year, through the rest of the decade. If a seller's pro forma assumes 5% annual revenue growth based on the last three years, that pro forma is fiction. Underwrite on flat top-line growth and build your return case on margin improvement instead: better expense control, added revenue streams like storage or propane, or converting underused transient sites into long-term lot leases. Value comes from operations, not from hoping the market does the work for you.

Check what the off-season tells you about survivability

The T12 months with the lowest revenue are the most important months in the whole document. That's when you find out whether the park has a plan for winter or is just hoping to break even until spring. Strategies like extended-stay discounts, workforce housing partnerships, or storage conversions can turn a dead month into a break-even one, and a closer look at how parks manage the off-season shows what separates a resilient operation from one that's one bad winter away from a cash crunch.

Before you make an offer

• Get monthly, not just annual, revenue and occupancy data.

• Separate revenue streams by category, not one lump sum.

• Normalize payroll for a market-rate manager if the owner works unpaid.

• Flag any R&M line under 5% of revenue as a deferred maintenance risk.

• Underwrite flat growth and find your upside in margin, not the top line.

A T12 is a story about how a business actually runs, not just what it earned. Read it like one. If you want a second set of eyes on a T12 before you submit an offer, reach out through Invest With Zac's contact page and we'll walk through it with you.