January 2008 Newsletter

1. RV Park Manager, Employees, and Casual Labor
2. RV Park Investment Series - 20 Hours of Audio on How to Buy, Sell, Operate RV Parks & Campgrounds
3. RV Parks and Campgrounds For Sale
4. Comments
5. Featured Listing
6. RV Park and Campground Memberships For Sale
7. RV Park Employment
8. Need an Attitude Adjustment... Think Park Service! by Frank Rolfe
9. Tell us what you think and send us your articles!

RV Park and Campground Managers, Employees and other Casual Labor

By Dave Reynolds

Once you find a potential manager for your RV Park or Campground, the work is still not over.  Questions such as background checks, credit checks, how much to pay them, what their responsibilities will be, are they an employee or contractor and others still need to be answered.

Should you obtain a background or credit check?  The right answer to this question is probably yes.  Does everyone do it?  No.

My personal thoughts on this are that you should obtain these background checks if you suspect any reason to do so.  I have only performed a few background checks over the years and have been fortunate in finding good campground and rv park managers for the most part.  I currently have some excellent managers that I am sure have terrible credit.

When I am interviewing potential RV Park and Campground managers and making my selection I rely on my gut feelings more often than not.  If the potential manager needs this job in order to survive that has been a good indication that they may not be a great manager.  They will constantly be looking for a raise and if they need money that bad, then it opens the door to theft.  My worst managers have been the ones that did not have at least one spouse working elsewhere and their compensation was only from running the park.

Other indications that I have found of poor quality managers have been those that are constantly talking and say they know how to do everything.  They have worked in every trade known to man.  Once they get the job, you find out that they don't know how to send a fax or replace the inner workings of a toilet even though they may have been a plumber for 5 years.  I would much rather have someone that knows their limits and is not afraid to disclose those limits up front.

So, a background check is a good idea but the real key is interpreting what they say they can do and forming your opinion of how well they will do it.

One other note on the background checks...  The reason that you should obtain this stems into potential future liability issues.  You don't want to hire someone as the manager that may have had issues in the past as sex offenders or other crimes that can come back to haunt you.  If you hire an offender and then he/she has a problem with one of your residents, you don't want to face a potential lawsuit.

Another important question that I receive quite often is do you treat your managers as employees or as independent contractors?

The answer to this question is almost always that I treat them as employees.  You can check the different ways the IRS gives you to choose between an employee vs independent contractor but in 99 out of 100 times the typical manager should be treated as an employee.

If you treat an employee as an independent contractor and get caught you are liable for penalties and interest and the back taxes.

Most people that are asking this question want to hear a different answer because they would rather just write on check to the manager and be done with it.  Some people may only give their manager free lot rent.  They don't want to have to set up state and federal payroll taxes which they are responsible for as an employer and hassle with all the reporting.  I will admit that I didn't like the answer either but it is the right way to do things.

If you want to take your chances with the IRS you may never be caught but there is something that is more important to consider other than just the hassles of setting up the payroll taxes.  This has to do with the potential of your manager getting injured on the job.  Even though you have them sign an independent contractor agreement and it states that they are not an employee, what happens if they get hurt performing their ordinary management duties?  That agreement will often be thrown out in court when it is determined that they meet all of the IRS guidelines (or state guidelines) of being an employee.  So not only will you then be responsible for the back taxes, you will most likely be a defendant in a lawsuit.

Since you treated them as an independent contractor you probably failed to get worker's compensation insurance and will now be held liable to pay for their medical bills, lost wages, and other damages.

It doesn't matter whether you give your manager $50 off of the rent or $2,000 per month, you need to setup your payroll correctly and obtain valid worker's compensation insurance.  The risks are not worth taking.  If you don't want to hassle with the payroll, there are services out there that will do everything for you.

Common Question:

On the issue of contractor vs employee, perhaps you can also address casual labor and workkampers. We sometimes use park residents for lawn mowing, snow plowing, repairing park owned homes, and odd jobs around the park so they can earn money and it is usually cheaper for us than hiring from the phone book. Do we have to add all of these people to the payroll even if they only work a few hours per month? I'm guessing other park owners are also in this situation.

Response:

This is an excellent question and I have struggled with this as well over the years.  I have used so-called part time labor many times.  There are really two issues to look at.  The first is whether or not you have to collect payroll taxes on this casual labor.  The general rule for the IRS is that anyone that should be treated as an employee should be setup as such and payroll taxes should be withheld.  In the real world, if you hire the teenager down the street to pick up trash or mow a lawn in your park, you will probably not set him up on your payroll system if it is a one time occurrence where you pay them $20..  However, if they are doing this type of work every week, then it would be advisable to go by the letter of the law.  Here is a link to Publication 15 on the IRS website for more info.

http://www.irs.gov/pub/irs-pdf/p15.pdf?legacy=1

The real issue to me is whether or not this casual labor person will be covered in case they get hurt.  If you are going to hire this casual labor then make sure you have worker's compensation and that your policy will cover this labor.  If you have a worker's compensation policy that covers your park manager that policy will be assigned a class code that covers certain types of work.  If your manager does only office work and your policy is assigned the class code that pertains to office work, then you may not be covered if you hire other types of work done.  If Mr. Bailey in space 15 is looking for some extra money and says he will go through and cut down some branches or install some skirting on one of your rental homes and cuts off his finger or worse, you better hope that you are covered for this under the worker's compensation insurance.  My insurance agent in Texas said it all boils down to the class codes of the policy and I would guess most states will have similar rules.

In summary, I would guess many park owner's out there have these little instances of casual labor and the real issue to me is that I don't want to risk a large lawsuit just because I was helping out a resident or teenager earn some extra money.  Be sure that they are covered in your worker's comp insurance policy.

Another Comment (from Brian)

It has always been my understanding that the key factor in determining an employee from an independent contractor is the amount of control you exercise over their day to day activities. Do you set their hours of work?  Do you direct the method in which they work? Have you given them a guideline of policies and rules that they must adhere to?  If so, they are probably an employee.  In my parks, my involvement is basically in setting business objectives and reviewing results.  Are my rents collected?  Is the park clean and safe?  Are the homes in good order?  Are expenses in line with my projections?

My managers work as they deem necessary to accomplish the objectives, are given no instruction on how to accomplish their tasks (unless help is solicited) and are paid straight commission on the rents they collect.  It may sound like a loose run organization, but for me, it has been effective.

The key and the challenge is in finding the right manager who is experienced, self disciplined and honest with a strong work ethic.  If you do the hard work on the front end of hiring right, and you may have to do it several times before finding the right fit, your manager would pass muster on an IRS review of their independent contractor status.  The primary benefit though is not in the ease of pay and being able to forgoing withholding, etc.  The primary benefit is the peace of mind derived from having a competent individual who absorbs the headaches for you. 

Thanks for the comments and you really hit the nail on the head.  If you find and hire the right person for the job, you will be on the right track.  Just as in buying the park, you need to spend the time and diligence on finding the right manager.  In my experience, a good manager will be the determining factor of whether or not I enjoy owning a certain park.

RV Park & Campground Investment Series

We have completed the series on RV Park and Campground Investing.

Over 20 hours of audio (on CD) with Frank Rolfe and I, taking you through the process of:

• Finding RV Parks and Campgrounds To Buy
• Evaluating RV Parks and Campgrounds
• Negotiating and Buying RV Parks & Campgrounds
• RV Park & Campground Due Diligence
• Operating, Turnaround and Selling RV Parks

Is 2008 the year that you will make that leap and buy an RV Park?  If so, then this series will help assure you that you don't make common and not-so-common mistakes that can ruin your life savings.  We want you to succeed and by investing in this new series, you will have the tools to do just that... Succeed and Profit with your RV Park / Campground Investments!

Included with the audio is a hard cover copy of Dave's book on How to Buy, Sell, and Operate an RV Park.

Find out More about this new Product! 

RV Parks and Campgrounds For Sale

We currently have over 475 RV Parks for sale and the list is growing daily. 

If you are looking to sell your RV Park or Campground you can do so Risk FREE.  Find out more about Selling your RV Park. 

Good Morning Dave,

We bought you e-book and had a copy printed and sent to us also. I have read it a bunch of times and also sent it to my accountant. We are in the process of buying a campground and found information we would never have thought of on our own. I found the book very informative and helpful.

Thanks Dave

RV Park For Sale in North Central Ohio

Price:             $649,000

Location:       North Central Ohio

Type:              KOA Campground

Spaces:         102

OHIO KOA CAMPGROUND. IF YOU WANT A KAMPGROUND IN THE HEART OF A RURAL AREA, BUT IN THE MIDDLE OF AN INDUSTRIAL STATE...THIS PROPERTY MAYBE FOR YOU...PLUS...PRICE REDUCED.

The property has been extensively upgraded over the past 2 years.  New owners will be able to build on the momentum the current owner's have started. The Service building has been remodeled, as well as the bathrooms that have been upgraded, the new mini golf, playground equipment added 50 amp sites, new game room are just some of the improvements made. A feature this campground has is the 11 cabins nestled in the woods around the property offering good revenue opportunity.   There are 30 wooded acre's available for future development.  The property has a beautiful pond and nature trails in the 30 acre's for the guests enjoyment. If you are looking for a KOA Kampground in the heart of an outdoor recreational area...don't miss this opportunity.

This section of RVParkStore.com is growing quickly.  Memberships are being listed and sold quickly.  With about 175 memberships currently for sale, this continues to be the prime outlet to buy and sell campground memberships. 

Best of all, when you are selling your membership, we do not charge you up front to do so.  You only pay us if you are successful in finding a buyer from RVParkStore.com. 

Are you searching for good quality employees or looking for a position with an RV Park?  Then be sure to visit our ever growing employment listing sections.

All listings in these sections are FREE!

Check out the Help Wanted Section

Check out the Work Wanted Section

Post your FREE Listing Here

Need an Attitude Adjustment - Think Park Service!

by Frank Rolfe

The last time I was at a National Park, I noticed that there is a certain "feel" to being there.  It's a happy, safe feeling, kind of like being a kid at your Grandmother's house.  And I think you get that feeling from the attitude of the Park Rangers and employees.

So what makes National Park employees different and so attractive as role models for RV Park Management?  I think the reasons are numerous:

• The Uniform:  You don't have to wear a specific uniform, but some reasonable dress code sure helps, coupled with the RV Park name on a shirt or a badge.  It creates trust with the customer that you are legitimate and gives you a "big company" feel that people tend to favor.  It sends the subliminal message to the customer that you care about their stay and stand behind that pledge.  You can buy off the internet custom cotton polo shirts with the RV Park name sewn on and they look as good as FedEx.  Couple that with some khaki pants and you have a top-notch look.

• The Park Service teaches a positive, friendly attitude.  Then you are happy.  It makes the customer happy too.  Nobody wants to be greeted with "what do you want?" upon arrival.  "Hi, how can I help you" sure works a lot better for customer retention and repeat business.

• Fair solutions to customer problems.  At the Park Service, the customer is always right within certain set boundaries.  A study has shown that a customer has greater satisfaction with a business that screwed up at all.  When a customer is unhappy for any reason, be sure to fix the problem happily and quickly.  Word will get around.

• Quality signage.  Not to beat this to death, but having professional looking signage sure makes you look a lot better as a business.  And it costs very little to make great signage over junk signage.  The Park Service has some of the best RV signage to be found anywhere.

If you are trying to improve the look and success of your RV Park, I would recommend you look no further than the Park Service for your inspiration.  While, they are not perfect, most of the National Parks I have been to do a great job, and every RV Park would be money ahead to follow their lead.