RV and boat storage property

[Tyler Hardy]

I'm in the planning stages now for an RV and boat storage facility in my area of Pike county Georgia. There's an urgent need and I know there's a large number of people in the area who have expressed that something needs to be built. I've already narrowed down a few pieces of property, but I'm wondering what sort of budget I should set for this type of a project?

The issue in my area is the dollar per acre. It looks like this property on a major highway is going to run around $30,000 an acre. That's much more than I think a storage facility can justify. The pricing in my area for this type of storage is generally $50 for outdoor storage, and $125 to $150 for covered storage with power for RVs and boats to maintain a trickle charge. I'm in the process of pricing out buildings for the covered areas but my plan was to open the facility as a simple outdoor lot to start bringing in some cash flow up front. Not to mention, build up the word of mouth in the area. Does anyone have experience in these types of facilities? Is there a certain size piece of property that I should be shooting for? Should I look for a cheaper property and focus on outdoor only, or swing for the fences and do a barge lot of nothing but covered? Any advice is good advice. Thanks for reading!

Keywords: Zebulon, Williamson, mini warehouse, Atlanta, Griffin, McDonough, Henry county, Spalding county, camper, trailer

[Logan Hartle]

Hey Tyler. What if you found someone with some spare land attached to their building they they aren’t using. You could always lease a portion of their land with an option to buy. You may be able to start with smaller monthly payment and get the facility up and running before buying the land.

[Bryan Mitchell]

@Henry Clark can help you with this. 

[Henry Clark]

@Bryan Mitchell  thanks for shout out.

@Tyler Hardy

$30,000 an acre isn't to much.  Run your numbers, the difference between $30,000; $20,000; $15,000 per acre over 25 or 30 years isn't much.

Bigger pockets doesnt allow Excel attachments, so I will just past below.  Format might not come across.

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.

PROJECT ESTIMATION TEMPLATE

Whether I am building or buying a location, I always run the Estimation template to dial in whether I can or should do the project. Each of us will have our own Payback, CAP rates, cash flow models and Tax implications thresholds; I am not covering that. This is a back of the napkin estimation, just on a spreadsheet.

We are in 8 locations and 5 towns; and we have used this approach to determine upfront whether to invest or not. Six of the locations are in towns of less than 5,000. Two of the locations are in a 1mm metro area (630 and 330 units). We will have built 47 buildings once we complete these last two sites.

This project list is for outside Storage and for the locations/cities we have looked at. Own the thought process. Example: HVAC, Fire Sprinklers, Facade, frost free footings, Storm retention ponds, road type, fire hydrants, etc. These and others, are the items that will hurt you, if you don’t own your knowledge. This spreadsheet is not all encompassing. For example on this project, I was “done with the spreadsheet”. I missed that there is a “Wet” spot in the middle. We will need to put in a $30,000 drain tile not reflected in my estimate. Still learning. You might want to put a SWAG factor (5%) in, up front.

Fill in the green areas. For the building quote, get one in your local area. This should represent the Building material, concrete base, and erection all delivered on site.

Side notes:

A. You can also use this template in reverse without knowing your site. Leave the “Land” amount blank and plug numbers in. This will give you a range of how much you can pay for the Land.

B. How many buildings should you build Phase One? I always have my first set of buildings pay off all of the land, fencing, initial ground/electrical/plumbing work. We use a 65% break even factor. This is a Cash flow estimate of how many of the units need to be filled to cover all expenses (except Depreciation) plus Principal/Interest payments. Although this is a little Chicken and Egg, or Circular logic. If you need 150 units to pay these costs, then add 80 more units for a total of 230. 230= 150 divided by 65%. Your building/road layout might dictate you build 240 or 204, then that is what you build. We never want to build just enough units (65%). The most depressing (counter intuitive) time for a storage owner is when you hit 90%; you have to decide if you build another building.

C. Phase 2, you will find your break even is around 35%. This is where the money starts to roll and your occupancy rate risk starts to decline.

See spreadsheet on our website (ClarkstorageLLC). Where ever it says spreadsheet, then hit the open button at the bottom. Change it and adapt it to your needs.

Again, don’t Trust anything I tell or give you. Own your info and data. Anything in the Storage Business can be validated. 

Start small and make your big mistakes early.

[Tyler Hardy]

@Logan Hartle I actually thought about this idea from the very beginning but discounted it because I wouldn't be able to take advantage of the appreciation of the property. Now you've got me thinking more that this might be an option. Even if only to show proof of concept in my area. Thanks.

[Tyler Hardy]

@Henry Clark

@Bryan Mitchell

Thank you so much for such a detailed list of information! Feel like I would be looking back on this response even years from now. If you wouldn't mind, I'd love to get you on the phone at some point just to chat a little bit more about your business. I can send you a PM with my phone number. Thank you Bryan for putting Henry on this chain!

[Henry Clark]

@Tyler Hardy

Glad to pass on info.  But you owe me one.  If my LSU Tigers play your Georgia team you have to root for the Tigers. The LSU Tigers.

[Tyler Hardy]

@Henry Clark

...........I can honestly say that I can't promise you that. Is there anything else on the table? Maybe something that doesn't affect my pride? .......or my dawgs?

[Logan Hartle]

@Tyler Hardy I agree. As a proof of concept it could be much less risk to get into the property now without having to buy it. You would also lock in that appreciation by having an option to buy attached to the lease at a pre-determined price. You'll buy for "x" at any time in the next "y" years type of thing. Then if the concept works, you go to the bank with your T-12 financials and borrow the $ to exercise your option.

[Francis Louis Vogel Jr]

Tyler,

Boat and RV storage is one of the most profitable of all of the self storage business models. When developing your business plan you should work with a friendly bank, private lender or commercial mortgage broker that can assist you with your due diligence. Hence when you're ready to move forward you have the financing in place.

This is a great post with some excellent answers.

Good luck.

[Brandon Hobbs]

@Tyler Hardy

Agree with all of the good advice here. Another low risk approach you might consider is to tie up the land with an "Intended Use" contingency. Try to get as much DD time as possible - min 60 days, shoot for 90. Be transparent with the listing broker and seller on your intentions for the property and make sure the contract allows you to get your EMD back if your feasibility does not pan out. Look for a local civil engineer who can assist with a first draft concept site plan. From that site plan you should be able to get an estimate on how many buildings and spaces the site will yield. You can pro-forma from there to see if the deal pencils out and hits your criteria. If it does not, you walk away and get your EMD back. Your only cost will be the site plan which should not cost more than $1500-$2000 range. That's money well spent regardless of the outcome.

I agree with @Henry Clark $30K/acre is not that bad for properly zoned land - depending on what your rates will be and how many spaces you can get.  Might not make sense for a 50 space facility.  But 150 space facility with rates $100/mo or more could be interesting.  

Best of luck.  Go Dawgs.

[Wesley Mullen]

@Henry Clark I think this is the post that you were referencing, so wanted to tag so I can keep it for historical purposes. A lot of great info in here!

[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

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 profitability soon. Thanks in advance :)