How Great Outdoor Cottages Is Redefining Park Model Living

The desire for simplification is a chief motivator in the park model business. Just ask Matt Kraeuter, CEO of Great Outdoor Cottages — a Delaware-based park model builder launched in 2021, in the middle of the COVID-19 pandemic.

“I think a lot of people are looking to simplify,” Kraeuter says. “It is more simplifying than downsizing. There are enough complications and confusions in this world, so there is an appeal to a simpler lifestyle.”

Kraeuter says a lot of his customers use park models as vacation homes. The economics are favorable. Whereas the cost of a two-bedroom, two-bath condo in a resort community tops $500,000, a park model can be purchased in a beach town for $125,000 to $140,000.

“When they come into one of our park models, it feels like a house, like a home, more than an RV,” Kraeuter says. “That is due to the trims, appliances, fits and finishes that we use. That is how we have been able to outpace some of the market.”

Blue Water Development, based in Ocean City, Maryland, manages and develops recreational properties like campgrounds and hotels. Blue Water founded Great Outdoor Cottages in response to an unprecedented demand for park models during the COVID-19 pandemic. It was a sensible investment, as RVs and camping in general provided an outlet for people to get back outside again.

“People could leave the house and get out and do things,” Kraeuter says. “During that trend, park models in the larger campgrounds became a viable and attractive alternative. It created a bigger demographic.”

Kraeuter, a practicing attorney for more than 20 years, joined the company in September 2023. He had been general counsel to a large federal defense contractor and came to Great Outdoor Cottages with a manufacturing background.

The company started out in a temporary facility in Millsboro, Delaware, while the current 45,000-square-foot factory was being built, opening near the end of 2022. While it was under construction, the company built up back orders that took it well into 2023. A 25,000-square-foot expansion is now underway.

“The first thing we did was expand the retail network, so we have dealerships now up and down the East Coast,” Kraeuter says. “We ship regularly from Florida to Maine. We created a dealership network, and then we looked into some other opportunities, in which park models made a lot of sense. Some of the areas that have become really interesting are folks who are converting transient campgrounds to full-time seasonal campgrounds with park models.”

Defining ‘Different’

The company currently has about 20 dealers in its network. Top states for the retail market are North Carolina, New Jersey, Pennsylvania, Delaware, Connecticut and Maine. Park models are also sold by campgrounds around the eastern U.S. The network and campgrounds provide valuable input for model development.

“We try to communicate regularly with our dealer network and our larger developers and customers,” Kraeuter says. “We want to know what they are seeing, and what they want to see in the market. Two years ago, there was a big price push, and I think now people are looking for a little bit higher level of amenities, so we try to answer to that. We try to deliver a quality product at a fair price. We are upfront and honest with our customers. We want to make it attainable for people. People like the extra touches, like a small wine fridge, nice appliances, and the washer and dryer — all the home amenities, but in a park model. You have to get creative to fit it all in.”

Kraeuter touts the high-end products used to build the company’s park models as a chief differentiator. All showers are tiled, and LP SmartSide siding is used for its exteriors.

“We have all high-end finishes that we provide at a very competitive price,” he says. “I think that has set us apart. We build a high-quality product.

“We have an in-house design team, which is where we have been able to win some pretty great business,” Kraeuter says. “We are big enough that we can produce at scale and meet volume requirements, but we are simple enough that we can produce designs quickly and get them on the line.”

Kraeuter recalls one project that quickly moved from concept to product on the manufacturing line within two weeks.

“We had someone come to us and they had a problem they wanted to solve, and we went through that whole process fast, because we have our team in-house and they can handle it all. We are nimble enough that we can be creative and answer people’s problems.”

Great Outdoor Cottages builds 20 to 25 different models. It also builds the house part of houseboats for a couple of customers, which Kraeuter describes as an exciting opportunity.

While business has generally been good the past few years, the looming challenge is tariffs.

“We get notices of implementing a price increase, [and] then we get a notice pulling it back. So, it can be confusing and concerning. We get lumber from Canada and some components from overseas, but we try to source things locally whenever we can.”

Kraeuter cites the 2017 Tax Cuts and Jobs Act as being a big help to the industry.

“There were some pretty significant tax advantages to a park model for the operators, because you could take them as equipment and fully depreciate them in one year, under the bonus depreciation plan that was a part of that tax act. We will see if it gets re-upped again this year. During COVID, there were the highest average daily rates that campgrounds had ever seen for park models. So, there were a lot of reasons why park models made sense for these campgrounds as an alternative to transient pads.”

There has also been a shift in campground preferences among older RVers.

“We are seeing some older folks who are looking into moving away from a transient campground situation into something a bit more passive,” Kraeuter says. “A park model community makes a lot of sense for them. The park model fits really nicely into that.”

Opening Doors for Diversification

Kraeuter was hired to look at the business holistically. At that time, Great Outdoor Cottages was building primarily for Equity LifeStyle communities and for Blue Water Development.

“Those were pretty much our primary customers. We felt as if we did not have a retail base. We had to rethink the business going forward and what we could do. You don’t have to change zoning — it is still zoned a campground because park models are still classified as RVs. It took areas where you had lots of check-ins and check-outs, which is a lot of work, into a bit more of a passive income. Many of these older campgrounds are being converted.”

This makes sense for campground owners, Kraeuter says, because they are selling park models and are getting long-term revenue from seasonal visitors. So, it becomes more of a vacation house than a campsite for many people. There has been an upsurge in that market.

A recent development is a move into to modular home construction. This can help address the need for affordable housing across the country. Great Outdoor Cottages has been tackling this issue — Kraeuter prefers to use the term “starter home,” or a simple home for those seeking a simpler way of living.

“We build anywhere from 550-square-foot up to 1,400-square-foot modular homes,” Kraeuter says. “People can own a home and buy an asset. I do not like to see people stuck in that rental cycle, because you are never going to create wealth from renting. We are focused on building something that is an appreciating asset, and you own the land as well. You are paying down a mortgage and creating wealth.

“We partnered with a couple of developers, and we are working on some projects in the mid-Atlantic area with these modular homes.”

Kraeuter views this new market as a big opportunity. It’s currently a small part of the company’s business, but he expects it to grow in the coming years.

“It has been an exciting time. We have pivoted from where we were manufacturing short-term rental cabins for large campgrounds to retail, which has been very strong for us. Our developer partners who are developing new campgrounds for us are doing great.

“With this, plus the modular homes project, we have diversified quite a bit over the last year and a half. We have built up a substantial backlog and are looking great for this year.”

Kraeuter describes his company as being well positioned for the future. He has fun with his job, helping to sell a dream and a lifestyle.

“I have big plans for the future, including exploring more geographic growth. It is going to be a great rest of the year. We are going to keep pushing and make sure we deliver the best products we can,” Kraeuter says.