If You Have the Room, Add Boat and RV Storage

It is a tribute to self storage that it has come such a long way in a relatively short period of time. Original self storage facilities in the 1970s were in warehouses on the edge of town. Now they are everywhere, modern and appealing. But if you are a self storage owner/operator or manager, you should seriously consider adding another form of storage that is growing rapidly every year, and that is boat and RV storage.

The key, of course, is having enough space to add boat and RV storage and making sure your ingress and egress will allow those customers towing boats and driving RVs plenty of room to maneuver. But once you have it in place, boat and RV storage will bring in an appreciable amount of extra money. A look at various self storage businesses offering boat and RV storage indicates that the average rental rate can run between $100 and $150 a month, depending on the size and quality of the storage space, and as high as $200 to $300 for upper-end offerings.

And there’s the rub. If all you want to do is have an outdoor space in which people can park their RVs and boats with no covering of any sort and no bells and whistles, it is easy enough to set in motion, but your rental rate likely will have to be well under $100 a month. If you decide to provide a three-sided garage that customers can back their boats and RVs into, the price normally goes up to the $100 to $125 range. And to have a totally enclosed garage puts you in the $125 to $150 area (or higher).

All these prices depend on the size of the space you are offering, with smaller spaces obviously costing less. But, from a marketing standpoint, the benefits of offering covered and/or enclosed boat and RV storage are numerous. Covered parking storage helps block UV rays to keep a vehicle’s body from fading and cracking. The covering reflects infrared rays to keep temperatures in RVs lower, reducing the premature cracking of tires, especially in the sidewall. Also, the covering protects vehicles’ paint jobs and exteriors.

You can also charge more to provide electrical outlets for RVs, normally around $20 per month.

What is involved in building boat and RV storage? The simplest of the covered offerings is a canopy style with roof only. The manger style has a roof, is enclosed on three sides, and can include individual partitions. The third is a completely enclosed individual unit. All three styles require deeper footings and additional structural strength to accommodate greater heights and widths and to provide wind resistance.

As one might expect, boat and RV storage units vary quite a bit in height, width and depth. In the case of having such storage on your property, the options also will vary according to the amount of land space you have available. Besides the space for the boat or RV itself, you will need to accommodate add-on fixtures such as ski racks, jet skis, motorcycle racks, trailers and air conditioning units, among other items. It is not unusual for boat and RV owners to rent separate units for these kind of items, but many may want everything in their one boat or RV space.1.

So what sizes should you consider for each kind of boat and RV space? The smallest space you will likely need to consider will be one that is 12 feet in width with a maximum depth of 45-50 feet. That said, the most common unit size is 14 feet wide with mixed depths up to 40 feet and an eave height of about 16 feet.2.

How do you determine what is the best size for your boat and RV spaces? Consider the cost to build versus potential income on a per-square-foot basis. For example, a 14-by-40 unit takes up 560 square feet of land. How does this measure up to having established indoor self storage units and the payback per square foot that you get on those versus what you will get for boat or RV spaces? If you feel there is enough need in your community to have boat and RV storage, then the payback per square foot is likely worth the effort. But having empty boat and RV storage space versus filled indoor units may be enough to make you want to stay away.

Many communities have restrictions in place for parking RVs and boats on the road or in driveways, so offering boat and RV storage is a good alternative and can prove to be a solid money-maker. So size up your available space, see if your community has a need for boat and RV storage and swing into action!

Sources:

1. Inside Self Storage website (www.insideselfstorage.com/articles/2013/09/considerations-and-costs-for-adding-boat-rv-storage-to-a-selfstorage-property.aspx)

2. Inside Self Storage website (www.insideselfstorage.com/articles/2013/09/considerations-and-costs-for-adding-boat-rv-storage-to-a-selfstorage-property.aspx)


Is Investing in Self Storage a Good Idea? You Bet!

OK, here’s a pop quiz for you. Imagine a business with little overhead, little interaction with customers after they sign on and one that has continued to grow impressively in recent years, even when times have been tough. If you guessed self storage, you would be right (and those of you who said funeral homes are excused).

Is self storage an industry worth investing in? You better believe it!

Once a self storage facility is built, the only major concerns are maintaining the property so it is clean and appealing, assisting customers, and accounting for monthly payments from customers. Once goods are stored, there is a very strong likelihood that you will only see customers on a very infrequent and scattered basis.

In a certain sense, you are a hero to your customers. You talk with them to help them through tough times. Many people in need of self storage are downsizing, going through a divorce, or have just run out of space at home to store the things that matter to them. You are part psychologist, part entrepreneur and almost always a friend.

So you want some facts about the industry itself?

*According to the Self Storage Association, the self storage industry in the United States generated $27.2 Billion in annual U.S. revenues in 2014. Growth potential? Self storage has been the fastest growing segment of the commercial real estate industry over the last 40 years and has been considered by Wall Street analysts to be “recession resistant” based on its performance since the economic recession of September, 2008.

*There are roughly 53,000 self storage facilities in the United States. There are six public corporations operating in the industry (Public Storage, Extra Space Storage, CubeSmart, National Storage Affiliates Trust, Sovran Self Storage (Uncle Bob’s) and U-Haul International). In addition, the industry has some 4,500 large and mid-sized firms that own and operate more than one facility; yet there are still more than 26,000 one facility owner/operators.

What about the stock market? The four major REITs in the self storage industry, Public Storage (NYSE: PSA), CubeSmart (NYSE: CUBE), Sovran Self Storage (NYSE: SSS) and Extra Space Storage (NYSE: EXR) have stocks that yield 3.28%, 2.82%, 3.53% and 3.54% respectively, considerably higher than the S&P 500’s average yield of 1.89%. All four REITs have increased their dividends by double-digits over the past few years.

If it sounds like a success story, it is. Self storage has grown by leaps and bounds since its early days in the 1970’s when it was located in warehouses at the edge of town. It has become a smarter, more savvy industry that has learned how to promote itself and improve its product.

Yes, this is a very good time to invest in self storage…or funeral homes, but the former is a lot more pleasurable than the latter.

*source – 2015 SSA Factsheet