RV and boat storage

[Robert Tinker]

Thinking into the future. Curious about RV and boat storage as an investment strategy. Anybody doing this? Pros vs Cons. Can you purchase one with an SBA loan? Thanks in advance!

[Account Closed]

@Robert Tinker, I'd be curious to see some responses, so thought I'd chime in. Were you thinking of established RV lots or setting one up? This strategy isn't my main focus, but I did get fascinated in it awhile back. I briefly needed to store a camper and found a local storage. It was an investor who'd bought a sfh with some land, rented the house, and then partitioned the land as a small RV storage. It was outside of city limits so the zoning rules allowed for it.

[Robert Tinker]

@Chad Lanting Kinda just in the investigating stage. Locally land is pretty expensive, might have to look into a little farther than my current area. Was hoping more would chime in. Seems like with the increase in RV sales and the restrictions from the HOA's there would be good opportunity. Maybe start with uncovered then add covered as time goes on.

[Account Closed]

@Robert Tinker, I think it's an interesting possibility. Where I am, land is pretty expensive, but the lot I was referring to was literally just a fenced dirt lot. The owner charged $90 and up to store RV's and could easily have fit 20 or more, so it seemed like a pretty good use of undeveloped land.

[Jess McLaughlin]

I am actually currently working on a development for boat and RV storage. I am in the beginning stages now. Meeting with contractors, meeting with the county, etc. The numbers look fantastic, especially if you dont have huge amounts of cash on stand by. Did you have any specific questions? maybe i could help. 

[Robert Tinker]

@Jess McLaughlin I'd like to follow up with you as you progress on your deal. What part of the country are you doing this in?

[Scott Meyers]

Hey Robert!

Yes, my partners & I are currently involved with one in Punta Gorda, FL.

Boat & RV Storage is indeed a niche strategy.  You'll typically see them partnered with traditional Self Storage - meaning those Facilities offering Storage Units for folks to store their household treasures AND on-site parking spaces for Boats, RV's, company trucks, etc.  That way you kind of hedge your bets (aka Risk/Reward).

Self Storage is historically Recession-Resistant as it has everything to do with Death, Divorce, Down-sizing, Dislocation, etc. - things that are prevalent in normal times and certainly, in not-so-normal-times, too.

However, RV & Boat Storage is similar but different, in that approx 1 out of 10 folks in the USA rents a Self Storage Unit, and that is not the case with Boats & RV's; hence it being a much more niche strategy.  You don't have the general population to fall back on for your historical & future trends.  

Also, Self Storage is needed in good times & bad, but that is not always the case with Boat & RV's.  When a large corporation is in financial dire straits, one of the first things they get rid of is the company jet.  Same can be said for a household.  The boat & RV is usually the first to go.

But we are certainly in interesting times right now as RV's & Campers seem to be in hot demand with some places having a hard time keeping them in stock and on the lot if it's a good deal.  They're being bought quickly.  And unless they're strictly for living in full time & travelling, they're going to need to be stored somewhere, right?  What I'm saying is you can't necessarily use conventional wisdom for 2020.  Question remains is: what does it look like in the years post-2020?

However, if you do your market research to determine the supply & demand and look at what other Boat & RV Storage Facility's are doing nearby, and pick a good market (Florida - the entire state is practically a boaters paradise, and for those that don't boat, well then, they RV.  Granted that's a broad generalization, but I think you get the point.)  You have to pick & choose your markets just like you have to pick & choose your assets classes.

And yes, the SBA does allow for Boat & RV Facility loans.  Course, I'm sure you know, the SBA doesn't actually lend any funds towards your business, they just underwrite & (partially) guarantee the actual lender who is loaning your business the monies.  So you'd be subject to that banks underwriting (in general & SBA) criteria, as well as their primary focus on businesses.  (Meaning some banks may, some may not - you can't force them to loan you the funds just because they are an SBA-approved lender.)  But if you have a solid plan, most likely a feasibility study, you ought to succeed in finding the funds.  Course that means your plan makes sense with or without government money.

I hope this helps.

If you have any specific questions - please feel free to post here and/or PM me.

Good luck to you!

Scott     

[Spencer Hilligoss]

@Robert Tinker we recently closed on a combo self storage and RV/Boat facility in Texas with our partners. I think it’s a killer niche as long as you vet the supply/demand and competition in the area.

[Jess McLaughlin]

Originally posted by @Robert Tinker:

@Jess McLaughlin I'd like to follow up with you as you progress on your deal. What part of the country are you doing this in?

 Hey @robert Tinker. I am in the central Va area. I think I have the spot picked out, I am currently working with engineers, contractors and the county to get a better understand of the numbers it will take to make it happen. 

[Henry Clark]

@Robert Tinker

Here are some exercises to help you find a location to check out.

Get on Sparefoot or Google.  Prefer Sparefoot since they show you the price.

Type in Round Rock/Austin/Temple/Waco/Killeen or just type in one of them.  Then in the upper left of Sparefoot you will see a drop down with vehicles, RV or boats, doesn't really matter, pick one.   On the map you can scroll between the towns.  As you get over them, there locations will show up on the map.

Round Rock/Austin are the same market.  Normally in Selfstorage you hear about your 1 to 3 mile market.  RV/Boat storage market range is even further, up to 20 miles.  Because there isn't as much competition.  Vehicle storage can't compete profitably when compared to Self Storage, "generally" speaking.

On the sparefoot page on the left side you can select covered, open, enclosed, etc.  I would pick uncovered and outdoor covered (canopy).  The cost of enclosed is huge and more risky.  Being in Texas with a lot of drill rod, if you have a welding friend with a high lift, I would look to do Canopy parking.  Need some shade down there.  

Back to looking at Google maps, what I am about to say isn't very scientific. You could go around and count, then compare to population.  But lets do this quick.  

Round Rock/Austin- lot of competition, plus your land is going to be higher.

Temple/Waco/Killeen- less competition.

Next look at the map and the competition closer.  You want to "out position" them.  Keep in mind most of them were built as "Self Storage" locations and not as RV/Boat locations.  They will want to be closer to the population and their land will be more expensive and harder to find a zoned location.  If they are doing vehicle storage it is more of Name calling.  Example: A 10 x 20 can be both self storage and Vehicle storage.  Beyond that, most self storage only being 8 1/2 foot tall or so wide, a 10 x 30 or 10 x 40 storage unit can't handle RV's and boats.

Recreation areas/cheaper land:  The way you beat your competition is to build closer to the Recreation areas or on routes to them, from the populations. Most people would prefer to not have to drag their RV or Boat back "into" town, especially if it is on the way to their primary rec area.  Also the land and rent will be cheaper out there.  "Out position".

Your Market:   Boats and RV's are the same thing.  Don't get into Enclosed right off the bat.  A lot of money and risk.  Your in the 30 to 40 foot range.  With some 20's.  Don't do the 50's.  This is for "A" class motor homes, which there are not a lot of.  Also if I buy a $250,000 to $1mm "A" class home, I want enclosed.

Don't look at the 20 foot vehicle storage, that won't be your decisive market.  

Mix:  equal parking 20/30/40 foot spaces.  

Zoning:

Read my Zoning I3? post.

Setup:

Read my Parking post.

Security:

Read my Security post.

 Financing:

Read my post on "Broad discussion on Financing".  Covers SBA.

Subject to in depth research, I like Belton, 317/36 intersection, 340/84, small towns/intersections between populations and recreation area.

Another business opportunity.  Your near Ft Hood, in Killeen.  I would look at RV/pontoon boat rentals near the lakes.  Especially if you can buy some land close by to stage/store them.  Require them to take out insurance.  

Good luck.  I'll attach some more info in a minute.

[Henry Clark]

@Robert Tinker

CONSIDERATIONS FOR RV OR VEHICLE STORAGE

A. Pull through- The front, pull as far forward as possible, gives the person next to you an easier angle to turn into, from behind you. Align your front with the fronts of all other vehicles. Be courteous and leave enough room on the Driver side, so that RV can open their doors.

B. Back to back parking- our locations are set up at 60 degree parking. Also, they are setup for the driver to back in on their side, so they can use the lot next to them for alignment. This way you only have one blind side on the right side backing in. Otherwise you have two blind sides.

We have 20/30/40 foot parking at our location at 26763 Highway 34, Glenwood, IA. Each size has a different width due to how hard it is to park a longer unit at the very front angle of their turn in. 20’s- 10 wide; 30’s- 12 wide; 40’s- 15 wide. Although you could park an RV in any of these sizes, it is easier with a wider width to make the “front” turn. Or ask for an end parking spot, so you are doing a 90 degree parking, but have the whole drive way to back in with, without a turn.

C. Canopy- same issues as others, depending on if 60 degree or 90 degree parking.

D. Enclosed- Really a matter of width and depth. Keep in mind all measurements for storage are relative. For example: A 10 wide x 20 deep x 8 tall unit, with studs, roll up door and door jambs; is really 9 wide x 19 ft 6 inch deep x 7 ½ foot tall. Also if you have a 20 ft boat or Camper, its really 22/23/24 ft depending on Propeller, bumper or front hitch.

E. Surface- Rock or hard surface (concrete/asphalt); If on rock/asphalt put your tongue leg or stabilizer pads on wider pads to spread the weight out. These pads are needed on Asphalt since in hot weather they will sink into the asphalt.

F. Pest control- we put mouse bait out along the fence lines and under the units, mow excess weeds and grass. You should put both rodent and bug control in your unit. Dispose of all food sources, for long term storage. If you want to be really diligent with pest control, don’t park next to overhead lights. They attract bugs at night and then mice underneath. Put scented drier sheets in all compartments and rooms. Open all cabinets and doors.

G. Stabilizers- if doing long term storage put you stabilizers down. Most parking is in an open area and the units can rock and move with the wind. This will also help with taking pressure off your tires so they last longer.

H. Security- Put a lock on the hitch. Although you are in a secure location, RV’s and trailers are the easiest storage to break into or take without notice. Recommend you put in motion sensors or GPS tracking security. Check your vehicle at least twice a month. Most Security systems only maintain footage for 2 weeks due to camera memory capacity.

I. Propane Fuel Tanks- disconnect and store if leaving for long term storage.

J. Electronic Lifts- disconnect the battery if leaving for long term storage.

K. Insurance- most storage unit insurance policies do not cover vehicles. Keep your insurance, just have them adjust your automobile to fewer miles or just comprehensive coverage. Wind, Flood, tornado, Hail, or third party damage or theft can still occur. Traditional insurance coverage, RV’s normally stay a flat rate throughout the year, thus you will still need to maintain full coverage. Or, if you seek out a specific RV or rec vehicle insurance company, you can move in and out of winterization rates.

L. Pricing- use a 30 foot vehicle as an example:

-In the country about a $1 per foot on rock.

-With Paved access and parking spot, this might run $60 to $90

- Enclosed parking this will cost about $120 to $170 for a 30 foot.

- Enclosed parking for a 50 foot, might cost $225 to $350.

The price extremes are the cost of the concrete/asphalt road and the storage bay. Also the longer the unit the price goes up significantly because it takes more driveway width to park and the type of door changes in both size and type (remote operated). A 50 ft RV will require about a 70 foot wide driveway to back in.

We are only addressing the long term Parking portion of storage. Other items are specific to each vehicle such as water clean out, Tire/window shades, etc.

Quick non Parking list:

Wheel/tire covers; Vehicle cover.

Remove and store your tires.

Store with a full fuel tank to prevent condensation

Add fuel stabilizers

Place RV completely off the ground to prevent flat spots on your tires, if left for a long time.

Cover your HVAC, skylights, vents and windows to prevent exposure to sun and breakdown.

Boats leave your plug out, whether covered or not.

[Henry Clark]

@Robert Tinker

Below is a template I used for a storage unit discussion.  Just change and add to fit your thoughts.  This will help you decided on how much your spot might cost.  This will help you to determine the amount of loan you need and then the amount of collateral you have to have.  This will help you narrow down your "expectations" and will speed up your site selection process.  You won't need most of this, but let it tickle your thought process.

	A. Self Storage Project Worksheet
	Drive up Storage
			Notes:
Land	$499,000		32.78 acres
Survey	$7,000		Site, elevation and building layout
Fence	$5,000		Black chainlink
Gate system	$50,000		Automated rolling 20ft
Engineer			if needed; $30,000 to $60,000
Dirt work	$100,000		Slight roll, no dirt brought on site
Building demo			if needed, $15,000 to $60,000
Electrical- site	$70,000		building lighting and office if needed, LED.
Electric poles			if needed; $2,000 per pole. First is free if nearby.
Security	$5,000
Storm drains			if needed; $50,000 to $150,000
Water	$70,000		if needed; $5,000 just plumbing
Water line			?? if an extension could be $10,000 up to $150,000
Fire Hydrant			if needed, $3,000
Sewer dump	$20,000		if needed: $5,000 plumbing
Sewer Line			if needed; $10,000 up to ????
Buildings	$		Phase 1 2 acres
Office	$30,000		if needed, plain storage unit 20x30; $25,000 insulated.
Office setup	$5,000		if needed, $5,000- computers, printers, HVAC, frig, cabinets, etc
Footings			if needed. ??????
Roads
Gravel	$50,000		if needed, ?????
Asphalt			if needed, ?????
Concrete	$676,133		6 inch Cubic yards, framed, poured, sawn,
Retention Pond			if needed, part of dirt work cost, less land for buildings
Landscaping	$5,000		I like trees and bushes. Less sterile
Road Sign	$15,000		For highway 55mph billboard sign
Total	$1,607,133

[Ben McMahon]

Glad I found this thread.  I am actually looking for buying opportunities in this space.  Particularly in the southwest as well as Texas and Florida.  Anyone have any suggestions on where to start looking?

[Robert Tinker]

@Henry Clark Thanks for all the great information!

[Henry Clark]

@Robert Tinker

your welcome.  If you get closer to a deal, give a yell out and I will take a look in anyway useful to you.

[Dhiraj Chhabra]

Hi guys,  I just bought a 130 unit storage/rv/boat. It's at 50% occupancy due to theft issues/poor marketing/management. I plan to bring the occupancy to 100% in 6 months. Here is the plan from my side :

1. Change the brand name(existing brand has bad reputation/reviews online)

2. Install world class security/camera alert systems

3. Find a local manager who can stay on site 24*7 at a reasonable cost

4. Spend on marketing : highway billboard(units are only 0.1 miles from the major highway), lake billboard(units are 1 mile of the lake), Facebook ads.. total budget 20k.

I have owned single family/multi fmly rentals before and this is my first big investment into storage units,  please help me out industry veterans and let me know what else can I do to get to profitabilty soon. Thanks in advance :)

[Jesse Herfel]

Quote from @Jess McLaughlin:

I am actually currently working on a development for boat and RV storage. I am in the beginning stages now. Meeting with contractors, meeting with the county, etc. The numbers look fantastic, especially if you dont have huge amounts of cash on stand by. Did you have any specific questions? maybe i could help. 

 Hi Jess, be interested to hear how this worked out?

[Chris Hatcher]

Quote from @Jess McLaughlin:

I am actually currently working on a development for boat and RV storage. I am in the beginning stages now. Meeting with contractors, meeting with the county, etc. The numbers look fantastic, especially if you dont have huge amounts of cash on stand by. Did you have any specific questions? maybe i could help. 

@Jess McLaughlin I'm curious to see what came of your development,  I'm about to start my journey on developing one. 

[Jess McLaughlin]

Quote from @Chris Hatcher:

Quote from @Jess McLaughlin:

I am actually currently working on a development for boat and RV storage. I am in the beginning stages now. Meeting with contractors, meeting with the county, etc. The numbers look fantastic, especially if you dont have huge amounts of cash on stand by. Did you have any specific questions? maybe i could help. 

@Jess McLaughlin I'm curious to see what came of your development,  I'm about to start my journey on developing one. 

It actually never got off the ground, unfortunately. The numbers were right, but the property owner decided to go a different way. How’s your project coming along?

[Colleen F.]

@Dhiraj Chhabra  how did you repositioning go? 

[Thomas Glenn]

@Henry Clark 

I am currently going through old threads on this topic, and your information is great.  I am currently in very early stages of possibly buying an existing RV storage lot which I am trying to work on how to value.  I am a smaller time investor with a few multi-family properties so this would be a large jump.  Do you have any type of system or process you use to value an existing one you would be willing to share?

[Henry Clark]

@Thomas Glenn

You’re in Texas.  

Don’t buy an existing location.  To much premium.

Go to all of the taxing authorities within your deal range.  Look up just their land items that are off the sale list.  See if the ground and site fit your needs.  Make a low ball offer.   

Don’t go to the tax auctions.  

Texas counties have no zoning so you should be able to put one there.  

Don’t trust anything I said.  You need to validate and do your research. 

Properties with power lines overhead are great since no one can build underneath them.  You can do parking or cargo containers though. 

[Henry Clark]

Also get in your property tax GIS maps.  Follow the railroads in towns.  Look for property that is owned by the railroad.  Make an offer on it.  If they are not using it, it is for sale.  They just don’t list. Check on any zoning issues if in town. 

[Ty Loney]

This is great info. Thanks Henry!