RV Dealership Real Estate: Lot Size, Zoning and Buying vs. Leasing
An RV dealership needs a lot of ground. Travel trailers, fifth wheels and motorhomes take up far more space than cars, and a dealer may need display area visible from the highway, storage for units waiting on reconditioning, room for customer units waiting on service, tall and deep service bays and space to maneuver large units safely. Sites that meet these needs can be hard to find, which makes RV dealership real estate an important part of many acquisitions.
This article explains how buyers may evaluate the property of an existing, operating RV dealership and whether to buy or lease it. It does not address building a new facility or development financing. Zoning, land use and environmental matters vary by location and should be reviewed with qualified attorneys, environmental professionals and other advisors. Nothing here is legal, tax or environmental advice.
What Makes a Site Work for an RV Dealer
- Lot capacity: enough paved or gravel area to display and store inventory
- Visibility and access: highway frontage and entrances wide enough for large units
- Service bays: door height, bay length and lifts suited to larger motorhomes
- Wash, dump and utility areas: facilities for preparing units for delivery
- Customer areas: showroom and space for walkthroughs at delivery
- Security: lighting, fencing and controls for high-value inventory
Zoning and Land Use
Buyers should confirm that the current use is permitted, whether it relies on a variance or nonconforming status and whether that status would continue under new ownership. Local rules may limit outdoor display, signage, storage or overnight use. These are questions for qualified land use counsel, not assumptions.
Environmental Review
Service operations may involve fuel, oils, propane, waste water and solvents. Lenders financing real estate may require an environmental review, and buyers should consider one even when leasing. Findings should be interpreted by qualified environmental professionals.
Buying the Real Estate
Owning the property can provide control over the site and protection from rent increases or a lease ending. It also requires more capital. Owner-occupied dealership real estate may be financed through options such as an SBA 504 business real estate loan or conventional real estate loans, depending on the transaction and lender review. Real estate may also be included with the business purchase in some SBA financing; see our article on SBA loans for RV dealers.
Leasing the Real Estate
Many sellers keep the property and lease it to the buyer. Leasing can reduce the cash required at closing. Buyers should review:
- Remaining term and renewal options
- Rent and how it may change
- Whether the lease can be assigned and whether the landlord must consent
- Responsibility for repairs, paving, roofs and environmental matters
- Any purchase option or right of first refusal
Lenders financing the business may want a lease term that extends well beyond the loan term and may require landlord agreements.
When the Seller Owns the Property
Sellers who own the land may offer a sale, a lease or a lease with a future purchase option. Each choice affects price, financing and the buyer’s long-term costs.
Property and Service Capacity
The property can limit how much service work the dealership can handle. Our article on RV warranty work and the service department explains why that matters. Our RV dealership due diligence checklist includes the property documents to request.
US Professional Funding helps buyers finance the acquisition of existing, operating RV dealerships, including transactions that include the real estate. Learn more about our RV dealership acquisition financing.
