The Right Time to Build Boat/RV Storage? Understanding the Market Before Taking on the Challenge
|Copyright 2014 by Virgo Publishing.|
|Posted on: 05/02/2011|
By Caesar Wright
"Nobody goes there anymore; it's too crowded." —Lawrence Peter “Yogi” Berra, former catcher, outfielder and manager of American Major League Baseball
Self-storage industry feasibility and demographic expert RK Kliebenstein of Coast-To-Coast Storage once said there was a two-year window for investing in the boat and RV storage market. The problem is he said that almost two years ago. He had just put aside all of his data on self-storage and said the boat/RV-storage market called for an entirely “new template.” His investment model for this segment was scrupulous, the numbers worked, and the returns looked great. And then the sky fell.
To say there was a change in the economy would rank right up there in insight with a Yogi Berra quip. But for those who choose to invest, there have been some positive results of the economic downturn where boat/RV storage is concerned.
A Good Time to Build
Often in business, one person’s loss can be another’s gain. In today’s economy, land costs are down, steel prices are as low as they’ve been in years, concrete is readily available and less expensive, and good construction crews are scratching to find work. As a result, this is actually a great time to build boat and RV storage.
The question is, do the current savings in land and construction offset the cost of financing? That’s where the experts and your instincts come in. Now more than ever, paying attention to every detail is crucial in making a project work.
Any of the major, reputable steel-building suppliers are willing to get involved early in the design phase of your storage facility, and they can help you save time and money if allowed to have input in the layout and structural design of the buildings. It’s not that these suppliers are smarter than your architect, engineer or general contractor, but this is what they do for a living. Day in and day out, they see what works and what doesn’t. They know what it takes to build a quality project within budget and on schedule, one that will provide cash flow and, at some point, be profitable. The real secret to a profitable boat/RV-storage facility is to build the right structure in the right place, at the right cost, and exactly at the right time.
Should You Add Boat/RV Storage?
It’s not uncommon for a self-storage operator to consider adding boat and RV storage to his existing facility through renovation or expansion. But he soon discovers that boat and RV buildings, due to their size and drive-aisle requirements, take up a lot of land. Another drawback to this niche product is it doesn’t have the same financial return per square foot as regular self-storage.
However, in many parts of the country, there’s still a good market for the development of boat/RV storage. We’re seeing a lot of developers and owners add it to existing storage facilities in locations and markets where it makes sense. Having land that’s already paid for makes the numbers work that much better.
If you’re considering the addition of boat/RV storage to your facility, first ask your managers how many calls or visits they receive from customers looking for this type of storage. It’s a good place to begin when determining if it will be viable in your current market. Also consider that people who can afford class-A recreational vehicles and large boats were not as hard hit on expendable income during the recession. They’re still willing to pay for a secure place to get their expensive toys out of the weather.
One of the biggest factors in determining whether to build boat and RV storage is location. Can your facility act as a “destination” or pick-up/drop-off site for these vehicles? Is your facility or land near or on the way to a body of water, campground or other popular attraction for boat/RV users? Facilities near recreational areas will attract more tenants. This criteria is important to deciding what and where to build, and how much to invest.
Consider talking with one or several of industry consultants who specialize in feasibility for boat/RV storage. Too often, business owners will spend millions on a building project, but are unwilling to spend a few thousand to hire the right advisor.
Be a Risk-Taker
Even though land is reasonable, construction is cheap and the market for boat/RV storage is there, we’re all wondering what’s going to happen with the economy. Nobody knows what the future may bring, but storage developers and owners have always been true entrepreneurs. Those who step up and take a risk stand to win or possibly lose it all, but the real reward will be in having tried. Take a chance on boat/RV storage and the opportunity created in a weak economy. Your business and bottom line may be much stronger for doing so.
Caesar Wright is president of Carlsbad, Calif.-based Mako Steel Inc., which designs, supplies and installs steel buildings for the self-storage industry nationwide. For more information, call 800.383.4932l; visit www.makosteel.com .