RV Park Valuation Calculator

Cap rate equals net operating income (NOI) divided by the purchase price, multiplied by 100. A park with $150,000 NOI and a $1,500,000 purchase price has a 10% cap rate. Cap rate deliberately ignores financing, so it compares two parks independently of how either was bought.

Because they are usually quoting different numbers. Brokers commonly market parks on seller's discretionary earnings (SDE), which includes the current owner's compensation. Lenders underwrite NOI, which does not — a market management expense of 4–8% of effective gross income is deducted whether or not the seller shows one. SDE is therefore always the higher figure, and a "cap rate" computed from SDE overstates the real one. Ask which number a quoted return is based on before comparing two deals.

NOI equals effective gross income minus operating expenses, before debt service, income taxes, depreciation, and capital expenditures. For an RV park, build gross income from site revenue (keeping transient and annual sites separate, since they carry different vacancy assumptions), then add utility reimbursements and ancillary income, then subtract operating expenses. Include a management expense and a capital reserve even when the seller's statement omits them — any lender underwriting the deal will.

Deferred maintenance and capital expenditure. Cap rate and cash-on-cash both measure stabilized operations, so a park needing septic replacement, road work, or electrical upgrades can show an attractive return and still be a poor deal. Price the capital plan separately before relying on any yield figure.