7 REASONS WHY
RV RESORTS
INVESTING MAKES SENSE
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With inflation, nightly stays fees go up, monthly stays fees go up and cash flow improves.
For more than a decade there has been a heightened demand for more affordable housing. People can't afford buying a house, and are turning to living in an RV as a more affordable option.
With inflation, nightly stays fees go up, monthly stays fees go up and cash flow improves.
It's not how much money you make on an investment but it's what you get to keep that counts!
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The RV Resort asset itself usually appreciates in value over time, especially with improvements put in place to make the property more profitable.
In essence, leverage is using a small amount of capital to purchase a larger property.
The basic meaning of the economic term, ‘economy of scale’ is that there is a fundamental cost-saving benefit to being bigger
RV Resorts properties yield a strong and steady income. The investors in the fund are essentially getting a percentage of the property’s Net Operating Income (NOI).
The RV Resort advantage over other property assets is that there are no individual leases. And rates can be adjusted dynamically for each property. This means that the NOI can be easily manipulated by appropriate rate increases that continually adjust to market demand. The resulting consistent cash flow profitability distributed to investors.
For more than a decade there has been a heightened demand for homes and apartments that was made larger by a significant undersupply.
Will that trend continue? In spite of current economic uncertainty, top U.S. real estate brokerage CBRE has consistently predicted strong positive outlooks for commercial real estate for the last several years.
Demographic and lifestyle trends along with the rising cost of homeownership, means that demand for affordable housing continues to outpace supply.
Fueled by the adventurous spirit of young adults burdened by debt and craving flexibility, RV Resort living emerges as the ultimate choice for those championing simplicity and facing the daunting price of traditional homeownership.
Everyone needs housing, and because of increasing demand for housing, investments in the RV Resort sector will continue to yield a consistent return with minimal risk.
Why do you not need to fear inflation as a passive investor in an RV Resort property?
With inflation, guests fees go up and cashflow improves.
How does that work exactly? As inflation goes up, so does the fees. That means that the revenues of the RV Resort property that you have invested in also goes up.
At the same time the biggest expense for the investment company, the mortgage or loan, is at a fixed rate.
The income of the investment asset is increasing but the biggest expense stays the same.
If inflation happens then it is nothing to fear because it only works in the favor of the RV Resort investor. The fact that RV Resort investment works as a hedge against inflation is yet another reason why RV Resort is a superior investment.
It's not how much money you make on an investment but it's what you get to keep that counts! The RV Resort Fund, and you personally as a passive investor, can reduce your tax bills in real terms.
So what are some of the tax strategies available to the syndication sponsor, that ultimately benefit you as a passive investor in that syndication? The 3 D’s.
—Deductions
The law allows for the deduction of expenses related to management, maintenance, and repair of the property.
With recent tax laws, there are some windfalls specific to real estate investment.
The biggest of all might be a new 20% deduction for all real estate income that comes through so-called pass-through entities. That includes entities like LLCs, sole proprietors, and S Corps.
—Deductions
You may be wondering how a property qualifies for a depreciation tax deduction while its value increases?
Simply because the IRS treats property like any other asset. Therefore, regardless of the fact that a RV Resort property is making profits and increasing in value, investors can deduct a depreciation expense from their real estate income tax
—Deferability
The term 1031 Exchange is defined under section 1031 of the IRS Code. To put it simply, this strategy allows an investor to
“defer” paying capital gains taxes on an investment property
when it is sold, as long as another “like-kind property” is
purchased with the profit gained by the sale of the first
property.
Although multifamily does not depend on
appreciation but on regular cash flow returns,
appreciation can be the icing on the cake. The
multifamily asset itself is usually appreciating in
value over time and can often be sold for a significant
profit.
Rental income and property appreciation are the
two main ways that you make money from real
estate syndication. When the property is sold, you
receive a portion of those profits.
The company that you choose to place your investment with can add value to a property in a number of ways. One example is by making capital improvements to the property = CAPEX improvements
After improvements are made, more fees can be charged per
stay. The higher fees increase the property’s valuation.
Appreciation is another reason why RV Resort is a superior
investment.
How can you, as a passive investor in a RV Resorts Fund, use
other people’s money to work for you?
A lever is a simple tool used to lift a heavier weight, with minimal
effort.
The way that you benefit from the principle of leverage as a
passive investor in RV Resorts is that you can pool your
investment funds along with other investors into a much bigger
properties and multiple properties with much higher rewards.
You are, in effect, leveraging your investment with other people’s
money.
Leverage benefits you because you not only get an exponential
return but you also get to share the risk with the bank and other
equity partners.
In essence, leverage is using a small amount of capital to purchase a
larger property. You can get all the benefits of a higher-performing
property without sacrificing all of your capital.
There is a famous line in the world of boxing that goes something like, ‘the great big man will beat the great little man every time.’ When it comes to property investment there are definitely sound economic reasons for saying that bigger is better.
The basic meaning of the economic term, ‘economy of scale’ is that there is a fundamental cost-saving benefit to being bigger.
How does this apply to
RV Resorts investing?
To give a simple example, if a RV Resort owner has been collecting guests 100's of guests fees for 12 months from a property and then the office roof needs fixing, that’s a much better scenario than collecting 1 rent for 12 months on a single-family property and then the one small roof on it needs fixing.
The bigger roof will cost more to fix but it certainly will not cost 10 times more. Or even if it's a really big roof... it will certainly not cost 100 times more, but in many cases the property owners will have received 100 times the amount in guests fees
It also doesn’t take a rocket scientist to figure out that raising the rent on a single family rental property by $20 a month is not going to help you much.
But doing the same thing on a 200 unit RV Resort property gives you an increase of $48,000 a year in positive cash-flow. And that $48,000 a year in extra cash-flow could potentially raise the value of the property by hundreds of thousands of dollars.
The best real estate investments utilize economies of scale for financial growth and this is yet another reason why RV Resort is a superior investment.
ECONOMIES OF SCALE
We’ve outlined seven great reasons why investing in RV Resorts makes sense:
● Cashflow
● Demand
● Hedge Against Inflation
● Tax Benefits
● Appreciation
● Economies of Scale
● Leverage
The fact is that RV Resorts properties represent a sound focal point for your investment and wealth creation strategy because they are tangible assets and their value is based on more than just market confidence.
Historically, RV Resorts properties provide stable, steady and reliable cashflow.
It makes perfect sense to learn more about passive investing in RV Resorts real estate. We invite you to book a call with us for more information.
BISON PEAK VENTURES
A real estate investment and property management company with a focus on RV Resorts Real Estate
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Phone Number : (719) 459-0279
Bison Peak Ventures, LLC 2024