The Foundation

Start here: what is NOI and why does everything depend on it?

Net Operating Income — NOI — is the single number that drives almost every RV park valuation. It's what your park earns after paying all operating expenses, before debt service and taxes. Get this number right and everything else follows. Get it wrong and your valuation is fiction.

NOI is not your gross revenue. It's not your bank account balance at the end of the year. It's a specific calculation that strips out the noise and tells a buyer what the property actually produces as a business.

The NOI Formula

Gross Revenue − Operating Expenses = NOI

Operating expenses include: utilities, insurance, property taxes, management, maintenance, repairs, and marketing. They do NOT include mortgage payments or depreciation.

What counts as an operating expense

This is where owners get confused. The following items are operating expenses and belong in your NOI calculation: utilities (water, electric, sewer), property taxes, insurance premiums, manager salary or management fees, routine maintenance and repairs, landscaping, marketing costs, reservation system fees, and any recurring professional fees like accounting.

Mortgage payments, depreciation, and major capital expenditures (replacing a septic system, repaving roads) are not operating expenses for NOI purposes. They matter for cash flow, but they don't belong in this number.

A worked example

60-Site Park — Midwest Location
Site rental revenue (avg $38/night, 62% occupancy) $512,000
Additional revenue (laundry, store, storage) $28,000
Gross annual revenue $540,000
Utilities − $68,000
Property taxes − $22,000
Insurance − $18,000
Management and staffing − $64,000
Maintenance, repairs, marketing − $31,000
Net Operating Income (NOI) $337,000
Expense ratio benchmark: Most stabilized RV parks run between 35% and 50% expense ratios. If your expenses are above 55%, buyers will flag that as a management problem — not just a valuation issue. Below 30% looks suspicious and buyers will assume you're understating costs.

Market Benchmarks

Cap rates: what buyers are actually paying right now

Once you know your NOI, you divide it by a cap rate to get your value. The cap rate is a market-derived number — it reflects what investors in your area are willing to pay for a dollar of park income. Lower cap rate means higher price for the same income. Higher cap rate means lower price.

In 2025, RV park cap rates nationally range from roughly 6% on the low end for premium destination resorts, up to 12% or higher for distressed or rural properties with thin financials. Most parks trade somewhere in the middle.

The Valuation Formula

NOI ÷ Cap Rate = Value

Example: $337,000 NOI ÷ 0.09 cap rate = $3,744,444 estimated value

Park Type Typical Cap Rate What Drives It
Premium destination resort (coastal, near national park) 6% – 7.5% Year-round demand, high ADR, strong brand, stable occupancy
Well-run suburban or regional park 7.5% – 8.5% Consistent occupancy, good infrastructure, clean financials
Seasonal or highway transient park 8.5% – 10% Occupancy volatility, shorter season, lower barriers to competition
Value-add or deferred maintenance park 10% – 11.5% Buyer is pricing in capital needed to stabilize or improve
Distressed, compliance issues, or rural location 11.5% – 14%+ High risk premium, limited buyer pool, operational uncertainty
The cap rate swing matters enormously. Take a park with $300,000 NOI. At a 8% cap rate it's worth $3.75 million. At a 10% cap rate, that same park is worth $3 million. That $750,000 difference comes entirely from which cap rate a buyer applies — which is why condition, location, and clean financials matter so much to your final number.

What Moves Your Number

What adds value and what kills it

Two parks with identical NOI can trade at very different prices. The cap rate a buyer uses depends heavily on the perceived risk of the investment. Here's what moves your cap rate — and therefore your value — in either direction.

↑ Adds value

  • ✅3+ years of clean, documented financials
  • ✅City water and sewer (versus well and septic)
  • ✅Full hookup sites with 50-amp service
  • ✅High and stable occupancy (65%+ year-round)
  • ✅Active permit to operate, no open citations
  • ✅Near a national park, lake, or tourist draw
  • ✅Mix of short-term and long-term guests
  • ✅Online reservation system with review history
  • ✅Room to add sites or amenities (expansion potential)

↓ Hurts value

  • ❌Well and septic with aging infrastructure
  • ❌Open HCD citations or lapsed permits
  • ❌Financials mixed with personal expenses
  • ❌Heavy seasonal dependence (closed 4+ months)
  • ❌Deferred maintenance on roads or electrical
  • ❌No online presence or reservation history
  • ❌100% long-term residents with rent control exposure
  • ❌Located in a flood zone without proper coverage
  • ❌Single-owner operated with no management in place

What Owners Get Wrong

The most common valuation mistakes we see

Counting personal expenses as park revenue

A lot of owner-operators run personal expenses through the business — vehicles, cell phones, travel, meals. This is common and legitimate for tax purposes. But when you're trying to value your park for a sale, buyers will normalize these back out. If you've been suppressing your reported income to lower your tax bill, your park may be worth more than your tax returns suggest. An experienced buyer will help you recast those numbers properly.

Using gross revenue as the value anchor

Some owners hear "3x revenue" as a rule of thumb and assume that's how parks are valued. It's not. Buyers value parks on NOI. A park generating $600,000 in revenue with $400,000 in expenses and a $200,000 NOI is worth less than a park generating $400,000 in revenue with $100,000 in expenses and a $300,000 NOI. Revenue is just the top line. What matters is what's left after the bills are paid.

Ignoring deferred maintenance in the asking price

If your septic system is 30 years old and your electrical needs upgrading, a buyer will price that work into their offer whether you mention it or not. You're better off acknowledging it upfront and adjusting your expectations accordingly. Trying to hide deferred maintenance creates friction in due diligence and kills deals that were otherwise close.

Pricing based on what you paid, not what it produces

What you paid for the park 15 years ago has no bearing on what it's worth today. Neither does what you've put into it in improvements. The only thing that matters to a buyer is what the park produces now, and what they think it can produce after they own it. That's it.

The honest answer: Getting a real valuation requires someone who knows what cap rates look like in your specific market, right now. The formulas above give you a solid baseline. But if you want to know what a real buyer would actually pay for your park today, the fastest way is a 20-minute conversation with us.