Buyers often misunderstand cap rates.
A cap rate is simply:
CAP RATE = NOI ÷ PURCHASE PRICE
Examples:
- A $100,000 NOI at an 8% cap = $1,250,000 value
- A $100,000 NOI at a 10% cap = $1,000,000 value
❗Important:
The lower the cap rate, the HIGHER the price (because it’s lower risk).
Typical campground cap rates:
- 7–8% → High-demand parks
- 8–9% → Standard
- 9–10%+ → Rural / value-add parks
- 6–7% → Premium or trophy assets
Buyers need to know that cap rates move with:
Trailing 12 performance
Market demand
Park condition
Utility infrastructure
Region
Expansion potential
Historic numbers
