Red Run Resort | Park Models As Investments

Campground Restoration With Park Models And Glamping Pods

Summary

For years, Red Run Resort has been a campground staple for families and tourists alike in Lancaster County, PA. They offer over 100 campsites to accommodate seasonal RVs and transient RVs. Yet something felt like it needed to be improved; Red Run Resort was ready to provide a next-level experience.

To accomplish this, Red Run Resort contacted Zook Cabins to learn how Park Models and a one-of-a-kind glamping pod could breathe new life into the space. To make this happen, Red Run Resort bought several park models independently; however, they also utilize the location to include RevShare sites.

Company Profile

Red Run Resort wanted to offer a new experience to their campground by offering Park Model Homes, commonly known as tiny homes, to their RV campground. To find the perfect balance of unique experiences and financing, they contacted Zook Cabins. We were able to listen to their ideas and concerns. Through building this relationship, we were able to present them with several Tiny Home options, a one-of-a-kind hanging glamping pod, and the ability to incorporate RevSharing into their plans.

Red Run Resort loved this idea and decided to purchase multiple units independently. Several of the other units were then offered to private investors. This opportunity allowed the campground to have less overall capital involved at the start but with the added benefit of the park models being offered. Since adding the park models to the campground, Red Run Resort has seen a steady increase in bookings, improved revenue, and a refreshed look for the whole campground.

Business Plan

Red Run Resort And Campground’s business plan was to offer a refreshed campground without investing a large amount of capital for all of the park model homes. This was achieved by opening up a RevShare option for some of the Park Models on the grounds. By choosing RevShare, Red Run Resort was afforded a quicker turnaround for homes to be placed and income to be produced for both parties.

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Park Models As Investments

Campground Owned Buildings

Campground-owned buildings are owned by the campground, rented out by the campground, and purchased initially from the campground. Red Run Resort takes on all the liability for the building’s upkeep and maintenance and maintains the surrounding grounds. The most significant benefit to the campground from this business model is that it keeps all the profit from renting out the building. The biggest downside to a project is the requirement of initial capital.

RevShare Buildings

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The campground does not own Rev Share buildings located at the campground, but they can be booked through the campground. A RevShare park model is owned by an independent investor who oversees everything, including the building’s maintenance and initial purchase cost. This offers benefits to campground owners in two ways.

First, the campground will receive a portion of the building’s rental income. Each revenue-sharing situation is unique; however, in most cases, it is either a flat fee for the rental spot, a percentage of profit, or both. This business model allows the campground to make income from hosting the park model without spending as much capital purchasing buildings.

The second benefit of offering RevShare sites is the ability to offer new campground accommodations at a lower entry price. At Red Run Resort, the campground owns about half of the 13 park model homes, and the other half are owned by private investors who partake in RevSharing. We know that this model can be a bit confusing, so let us explain it a bit more. Let’s take a look at this in a bit more detail.

If each Park Model costs $100,000*, Red Run Resort would need $1.3 million to start the project for the buildings alone. However, allowing investors to purchase 6* of the park model homes lowered Red Run Resort’s initial capital for building purchases by $600,000*. With Red Run’s business model, they can have more on-site buildings without tying up as much capital.

If you are considering doing something like this, having RevShare available is a win-win situation. Less upfront capital is needed for the campground, yet they can still make income from offering the park model cabins. Additionally, private investors can have dedicated locations for their park models, which can be otherwise challenging to find.

*The monetary figures shown are for simplistic math representation only. The actual cost of your park model will vary depending on multiple factors.