What is a Development Costs?
The total cost to develop a property from raw land to operational outdoor hospitality facility, including land acquisition, site development, construction, infrastructure, permits, and soft costs.
Understanding Development Costs
Development costs typically include:
**Land Acquisition:**
- Property purchase price
- Closing costs and transaction fees
- Due diligence costs
- Title insurance
**Site Development:**
- Clearing and grading
- Road construction
- Site preparation
- Erosion control
**Infrastructure:**
- Water and wastewater systems
- Electrical infrastructure
- Communication systems
- Drainage and stormwater management
**Construction:**
- Building construction (units, facilities, structures)
- RV pads and site improvements
- Amenities and common areas
- Hardscaping and landscaping
**Permits and Fees:**
- Building permits
- Environmental permits
- Impact fees
- Development fees
- Regulatory approvals
**Soft Costs:**
- Architectural and engineering services
- Legal and professional fees
- Feasibility studies and appraisals
- Financing costs
- Insurance during development
- Marketing and pre-opening expenses
**FF&E (Furniture, Fixtures & Equipment):**
- Unit furnishings and equipment
- Common area FF&E
- Operational equipment
**Contingency:**
- Reserve for unexpected costs (typically 10-20%)
Development costs vary significantly based on:
- Property size and complexity
- Location and site conditions
- Quality and positioning (budget vs. luxury)
- Infrastructure requirements
- Regulatory requirements
- Market conditions
Typical development cost ranges:
**Glamping Resorts:**
- Budget: $40K-$80K per unit
- Mid-range: $80K-$150K per unit
- Luxury: $150K-$300K+ per unit
**RV Parks:**
- Basic: $8K-$15K per site
- Mid-range: $15K-$25K per site
- Premium: $25K-$40K+ per site
**Campgrounds:**
- Basic: $5K-$12K per site
- Developed: $12K-$20K per site
- Premium: $20K-$35K+ per site
Total development costs for properties:
- 20-unit glamping resort: $800K-$3M+
- 100-site RV park: $800K-$2.5M+
- 80-site campground: $400K-$1.6M+
Development cost breakdown typically:
- Land: 10-25%
- Site development: 15-30%
- Infrastructure: 15-25%
- Construction: 25-40%
- Permits and fees: 5-15%
- Soft costs: 10-20%
- Contingency: 10-20%
Understanding development costs is critical for:
- Feasibility analysis and project viability
- Financing and capital planning
- Budget management and cost control
- Investment decision-making
- Competitive positioning
Sage Outdoor Advisory provides comprehensive development cost analysis in our feasibility studies, helping clients understand all cost components, estimate total development investment, identify cost drivers, plan for contingencies, and evaluate project economics. We help clients develop realistic budgets and assess whether projects are financially viable given development costs and projected returns.
Examples of Development Costs
- •A 30-unit glamping resort development costs: land acquisition ($450K), site development ($380K), infrastructure ($320K), construction ($1.2M), permits and fees ($85K), soft costs ($180K), FF&E ($360K), contingency ($200K). Total development costs: $3.175M, or $106K per unit. The feasibility study breaks down all costs and evaluates whether projected returns justify this investment.
- •A 100-site RV park development: land ($280K), site development ($420K), infrastructure ($380K), construction ($1.1M), permits ($95K), soft costs ($150K), FF&E ($95K), contingency ($180K). Total: $2.7M, or $27K per site. The analysis shows the project generates sufficient returns to justify development costs, with payback in 8 years.
- •A campground developer budgets: land ($180K), site development ($220K), infrastructure ($195K), construction ($480K), permits ($45K), soft costs ($85K), FF&E ($55K), contingency ($90K). Total: $1.35M for 75 sites, or $18K per site. The feasibility study identifies that development costs are reasonable for the market and project returns support the investment.
Common Use Cases
- •Feasibility analysis and project viability assessment
- •Financing and capital planning
- •Budget development and cost management
- •Investment decision-making and ROI analysis
Related Services
Frequently Asked Questions About Development Costs
What are development costs and what do they include?
Development costs are the total investment to transform raw land into an operational property, including land acquisition, site development, infrastructure, construction, permits, fees, soft costs, FF&E, and contingency. For outdoor hospitality properties, development costs typically range from $5K-$300K+ per unit/site depending on type, quality, and location.
How much do outdoor hospitality properties cost to develop?
Development costs vary significantly: glamping resorts may cost $40K-$300K+ per unit, RV parks $8K-$40K+ per site, campgrounds $5K-$35K+ per site. Total development costs for properties range from hundreds of thousands to millions of dollars. A feasibility study should provide detailed cost estimates for your specific project.
What's included in development costs?
Development costs include land acquisition, site development (clearing, grading, roads), infrastructure (utilities, drainage), construction (buildings, units, sites), permits and fees, soft costs (professional services, legal, financing), FF&E (furniture, fixtures, equipment), and contingency reserves for unexpected costs.
How do I estimate development costs?
Development cost estimation requires detailed analysis of all components: site conditions, infrastructure requirements, construction specifications, permit requirements, and professional services. A feasibility study provides comprehensive cost estimates based on project scope, location, quality level, and market conditions. It's important to include contingency (10-20%) for unexpected costs.
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