Vacant lots for storage units and car storage

[Samuel Gemus]

I am looking to but some vacant lots that already are used for car/boat storage and the revenue seems lucrative. Does anyone have experience in this field?

[Erik W.]

I am looking into that as well, so while I can't share direct stories of success yet I can share some of my research and analysis.

First, I do already own a traditional self-storage facility.  Requests from people asking if I had any outdoor storage available (I don't) are what prompted me to start trying to find some.  My lot is very tightly packed already.  No place to park anything.

You will typically at least need a fence and a gate that is 8 feet wide.  The gate can be automated with an electronic keyed entry pad, or I know one guy locally who just had a combination pad lock.  I am not kidding.  He has a chain link fence that's only 4 feet tall. No cameras that I'm aware of.  That's about as low tech as you can get + minimal security.  That said, his lot is ALWAYS full of boats, campers, and RVs.  He charges between $30 - $65 / month, depending on the parking space size.  Not sure exactly how many spaces he has, but spit wadding based on driving by, I've seen around 25-30 vehicles/trailers parked there at any one time.  Probably an acre of land.

You'll need a way to collect rent.  I use online software for my storage facility, and it can be customized to include parking spaces easily enough.  I wouldn't want people mailing me checks.  Takes too long for them to bounce.

Know the rules for what you can do for non-payers.  Can you lock them out?  Probably yes if you have an electronic system where everyone has their own unique pass code.  Probably not if you just have a pad lock.

What kind of parking surface: asphalt, gravel, or grass?  The cheap guy mentioned above only has grass.  Even with the occasional rain, I've never seen his lot degenerate into a mud pit.  Gravel would make it easier to care for in some ways as well as designate certain spaces for parking and others for driving.  Asphalt is cream of the crop and sheds water, so very attractive to renters, but also expensive and has to be maintained.

Will you have flood lights and cameras?  If so, where will they be mounted?  How will you get electric power to them?  Where will the cameras store data?  How frequently will you monitor them?  What will you do if someone cuts the line to one or more?

What liability will you need in case someone reports a vehicle missing or damaged?  What kind of insurance?

Is the land you're using zoned properly?  Typically, it needs to be commercially zoned to have vehicles parked on it unless there's already a house there.

I think it's a great model, which is why I'm researching it.  All of your costs are in the ground except for fencing, lighting, and security system, if you get one.  Simply put, there is a very low cost of entry compared to traditional self-storage, and if managed correctly I think it can be a cash cow.  But I haven't done it yet, so for me it's all questions, projections, and theory.