Why Ignoring Site Mix Ratios Can Tank Your RV Park Returns

The ratio of transient RV sites to cabins to long-term lots in a park determines whether your cash flow holds steady through the year or swings wildly with the seasons. Get this mix wrong and you can own a property that looks great on paper in July and bleeds cash in January.

Most investors evaluate RV parks by looking at total sites and average daily rate. That misses the point. A 100-site park that is 80% transient RV sites behaves nothing like a 100-site park that is 60% long-term lots with cabins filling the gaps. Same site count, completely different risk profile.

What each site type actually does for you

Transient RV sites are the highest-revenue-per-night option, but they are also the most seasonal. In peak summer months and holiday weekends, occupancy on these sites can hit near 100%. In the off-season, that same site sits empty or discounts heavily just to get a body in it. This is the segment most exposed to the swings covered in our breakdown of why RV park occupancy hits 100% in summer but sits empty in winter.

Cabins sit in the middle. They rent for more per night than a bare RV site and they pull in a customer who does not own an RV, which widens your market. Cabins also tend to book earlier and hold occupancy a bit better in shoulder seasons because they read as a vacation rental, not just a parking spot.

Long-term or annual lots are the stabilizer. These are leased to seasonal residents or workers, often on monthly or annual terms. Rent per night is lower, but occupancy is close to guaranteed year round. A park with 30-40% of sites on long-term leases has a revenue floor that a fully transient park does not.

Why the ratio changes your cap rate

RV parks commonly trade in the 7-12% cap rate range, and that spread exists largely because of operational intensity and cash flow predictability. A park heavy on transient sites, with all the staffing, turnover, and marketing that requires, often prices toward the higher end of that range because buyers demand compensation for the volatility and labor. A park with a strong base of long-term lots and lower turnover can justify a lower cap rate because the income is more bond-like.

If you are underwriting a deal, the site mix should directly inform your assumed cap rate and your stress test. A 70% transient park needs a bigger cushion for a bad summer or a slow shoulder season than a park with half its revenue locked into annual leases.

The flat growth problem

Industry forecasts point to occupancy growth of only 0-1% a year through the rest of the decade. The surge in RV travel during the pandemic was an anomaly, not a new baseline. That means you cannot underwrite a deal assuming demand will keep climbing and bail you out of a mediocre site mix. NOI growth has to come from margin improvement and value-add work, not from hoping more campers show up every year.

This is where site mix becomes a lever instead of a fixed trait. Converting a chunk of underused transient sites into long-term lots, or adding a handful of cabins in an open field, can shift the entire risk and return profile of a property without adding a single acre of land. It is also cheaper than most people assume, since it is often site prep and utility hookups rather than new construction.

Revenue streams beyond the site fee

A well-run park is not living off site rental alone. Private lot leases, amenity fees for laundry, showers, firewood, and store sales all add up. These secondary streams matter more in a park with a mixed site strategy because they smooth out the dips between peak and off-season. A park that leans only on nightly RV rentals has fewer of these secondary levers to pull when winter occupancy drops, which is exactly the scenario covered in our post on winter occupancy strategies and how RV parks survive the off-season.

What this means for your underwriting

• Ask for a site-by-site breakdown, not just total site count, before you evaluate any deal.

• Model transient, cabin, and long-term revenue separately, since they carry different seasonality and different expense loads.

• Assume flat 0-1% occupancy growth and build your return case around margin work and mix optimization instead.

• Check whether the current mix matches the local market. A park near a seasonal attraction needs a different mix than one near a workforce housing shortage.

Ignoring site mix ratios is one of the most common mistakes I see in RV park underwriting, and it is also one of the easiest to fix once you know to look for it. If you want a second set of eyes on a deal or want to talk through how a specific mix affects returns, you can reach out through the contact page at Invest With Zac.