Big Texan RV Ranch: Expanding an RV Ranch with Park Models in Amarillo, Texas
Summary
As visionaries and entrepreneurs, Bobby Lee and Andrew dreamed of opening the Big Texan RV Ranch, which would include short-term rental units (STRs) with a genuine Texan experience. Through the expert help and accommodation of Zook Cabins, their team was able to customize 11 log cabin park model homes. In less than six months after their purchase, the Big Texan RV Ranch was in business. Read this story to understand how they reached their benchmark for a 70% occupancy rate in the first summer season. This is more than a success story; it’s a guide for those considering an investment in short-term rental units.
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Company Profile – Big Texan
Bobby Lee and his father started the Big Texan in the 70s. Of course, everything is bigger and better in Texas, and their goals were no different. As a team, they started a restaurant serving delicious Texan meals for their RV Park customers. The Big Texan is home to the 72-oz steak challenge. A contest to eat a 72-oz steak in one sitting to get the meal free – it was a huge hit!
But now it was time to expand. A vision formed: a Big Texan RV Ranch providing a “Disney experience, Western adventure, and frontier land.” Unwilling to settle for anything less than an authentic Texan experience, Bobby Lee and Andrew designed an atmosphere that would transport their overnight guests into a world of Western charm and relaxation.
To build a comfortable, western-styled RV Ranch, they would need Park Model cabins…
The Challenges
Now, of course, there were a few challenges before the team. They had to find answers to the following questions:
- What was the market for short-term rental units in their area?
- What occupancy rate should they reach to stay in business?
- Where could they find log cabins that would provide a quality Texan vibe?
- How much would property taxes cost, and what other expenses were involved?
- How would they finance this endeavor?
The Solution
Understanding the market and target occupancy rate
Bobby Lee conducted a market analysis of the Amarillo, Texas, area to see what occupancy rates were within that region. After his market analysis, the team understood that the Big Texan RV Ranch would need a 70% occupancy rate during the summer months in order to remain sustainable.
Finding the perfect log cabin
This proved to be the hardest challenge for the team. As they researched RV camps within their area, they saw that the log cabins looked like they came straight from a big box home improvement store.
“[We] wanted wood floors, wood ceilings, and wood walls…a real Western experience.”
After a lot of scrolling through the internet, they came across Zook Cabins. The aesthetic of the log cabins immediately captured the attention of Bobby Lee and Andrew. Through Leon’s assistance, they were able to outline every detail that they wanted for their log cabin park models. After each request was made, Zook Cabins made a model and invited Bobby Lee and his partners to experience Zook Cabins in person. They were able to see the building process in person and tour their prototype log cabin. As they walked through the log cabin, they could make any modifications.
“There was no ask [of ours] that wasn’t taken care of.”
For example, when they viewed the log cabins with shower curtains, they decided to opt for glass doors to both protect their hardwood floors and make a better living experience for their guests.
Family is the significant focus of the Big Texan RV Ranch. As such, the team added a loft where the kids can both play and rest. Each log cabin follows a two-bedroom model: the parent’s room is on one side of the cabin, and the children’s room is on the opposite side.
property tax Advantages
With short-term rental units, property taxes can be a killer. However, when Bobby Lee and his team decided to invest in log cabin park models, they were exempt from property taxes since park models are technically registered as RVs or “vehicles.” This keeps their overall operating costs down, which in turn enables them to offer a more competitive nightly rate.
Financing solutions and rates
The team behind the Big Texan Ranch RV consists of four partners who split the costs of the log cabins equally.
Each of their log cabins costs $125,000, with shipping. They figure approximately $1,000-$2,000 in repairs per log cabin (for the first few years while they are still in excellent condition). Because they value a clean, meticulous environment, they hire cleaning maids by the hour in order to eliminate rushing.
With these costs in consideration, the Big Texan Ranch RV charges $100 per night (including the $25 cleaning fee) and as high as $200 on weekends and holidays.
Cost Breakdown (One Cabin)*
| Income | Year 1 | Year 2 | Year 3 | Year 4 | Year 5 |
| Sales | $33,215 | $33,215 | $33,215 | $33,215 | $33,215 |
| Total Income | $33,215 | $33,215 | $33,215 | $33,215 | $33,215 |
| Expenses | Year 1 | Year 2 | Year 3 | Year 4 | Year 5 |
| Cabin + Delivery | $97,000 | ||||
| Infrastructure (Landscaping, Decking, More) | $20,000 | ||||
| Maintenance | $2,000 | $2,000 | $2,000 | $2,000 | $2,000 |
| Total Expenses | $119,000 | $2,000 | $2,000 | $2,000 | $2,000 |
| Profit/Loss | $-85,785 | $31,215 | $31,215 | $31,215 | $31,215 |
| Payback Periods | $-85,785 | $-54,570 | $-23,355 | $7,860 | $39,075 |
How long would it take to pay off an investment of 11 park model cabins?
While the numbers and situations can vary, it can be predicted that a payback period will be around 4 – 5 years for purchasing 11 park model cabins.
Results and Improvements
If you visit the Big Texan RV Ranch, you’ll find a beautiful atmosphere with string lights twinkling at night. Each log cabin has a private, personal porch. The grounds include landscaping, picnic tables, a BBQ area, and a gazebo – all with the purpose of creating connection and quality time with loved ones.
Occupancy Rates
Through their marketing with the Big Texan, the Big Texan RV Ranch has seen a good occupancy rate: 70 percent during the on-season and around 50 percent during the off-season of winter months. They project a 75 percent occupancy rate for the summer of 2024.
Expansion and Recoup
While they only have eleven log cabins on this property, they hope to double or triple that within the next couple of years. They project to recoup within the first five years of operation.
