Campgrounds are like no other business or real estate venture. There are aspects of campground ownership that resemble operating a small business, as well as elements that resemble owning and operating a piece of real property. Consequently, the valuation of a campground requires a blending of two distinct areas. A complete analysis would be a real property appraisal and a business enterprise appraisal.
There are three primary campground valuation methods. The first, and most frequently used method, is the income capitalization approach. In this method, the campground's net operating income (NOI) is capitalized by a factor, or a capitalization rate (a.k.a. a “cap rate”), to determine the campground’s value. The second approach to campground valuation is the sales comparison approach. Similar to the income capitalization approach, this method compares the subject campground to recently sold campgrounds to determine an indication of its value. The final approach to campground valuation, and possibly the least utilized approach, is the cost to rebuild approach.
