Question lot valuation

[sheridany]

How are recent buyers who have bought an RV lot coming up with a valuation of the property to make an offer? It seems like lot prices are all over the place and the level of amenities does not match lot to lot.

 

[Joe Hogan]

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[sheridany]

@Joe Goodxrvn do you have a crystal ball I can borrow?

 

[NWIP]

Prior to buying we looked at various locations out of curiosity. Considered things like HOA fees, return on lot rental and then tried to gather what was on the market at each park to get a general feel for value.

When we got serious about buying in FL I got comps within the park for what lots had sold for in the previous 12 months and lots that were currently on the market. Getting info about what had sold the previous 12 months wasn’t that easy but gathered enough info I felt I knew what the valuation was for the lot I was interested in. Park where we purchased most lots were being offered by owner without agents.

 

[Neal]

Can you get access to what lots sold for over the past few years? I'd hate going into this dark only seeing for sale prices. I realize to some lot ownership is for security of having a place to go. I almost bought a lot in Pelican Lakes, Naples, FL a few years ago. Then I realized two problems: 1) Realizing the number of years most typically own these lots, I could multiply that times what it would cost me to rent a site and realize the cost is far less to rent, and probably close to what you could stand to lose when it's time to sell, especially in the current market conditions, 2) It's counter to what RVing is about - getting out and seeing all there is to see. It all depends on the individual, lot ownership is not for me as I have a house and when not in this house I want to be on the move. A fulltimer is in a different situation and probably in need of longer stay put time to reset. I digress a little, if you can get a history of sales data that would help. Everything is so inflated right now because that's what everyone is doing. I imagine lot ownership is in the same game. If you can hold off 1-2 years, that seems to be when lots will be prime for pickings. No crystal ball and based on my lottery experience, I should stay out of this.

 

[sheridany]

That’s a great perspective. We like the area but I believe these lots are way overpriced because of the buying hysteria. People are buying them sight unseen which is crazy. Not all lots move as quickly and there are some that need work or a remodel and if it can be had at a discount I’d look at it maybe.

 

[Neal]

I also realized, at that time, the money I was putting into the slab of concrete I could put into a nice condo in the surrounding area. When I was checking in to Pelican Lakes a lot owner was in the office complaining about the increase in HOA fees, which was a significant increase as they just got hit by a hurricane with over 1B a lot in damages (IIRC). I hate when places think I'm a blank check such as this situation. Better have a real good understanding on limits of what an HOA can do in rate increases, fees, etc.

 

[sheridany]

and property taxes. Wowzee here it is 1.25% of the purchase price. Add that to your overhead cost as well.

 

[Neal]

In Pelican Lakes, the county has a max length you can stay, although I don't think enforced. It may also be considered an investment property subject to different taxes. Not sure, not an expert, but point is you may find a few surprises along the way that you weren't aware of at the time of signing.

 

[redbaron]

I too looked at purchasing several lots in places I like to go. Originally it was RV parks, but I quickly realized that buying land and making it an rv lot was similar costs, and much cheaper ongoing. Doing it right, you don't have any HOA fees or usage restrictions, and can generate revenue.

I am just starting, but plan to have several lots in the next few years.

I am looking at one near pigeon forge, TN. 5 acres. Water is a well, has septic already, and electricity already on the property. Was a previous mobile home pad site. Purchase price < $50k. With another $25k invested, I can have pad sites for 4 RV's full hookup and an improved driveway that would make in and out a breeze.

This would not be suitable for a commercial operation, but rather a seasonal usage. The surrounding area is heavily wooded.

When complete, this will be very similar to my Glacier property, which was under $100k as well.