For the last several years, self-storage entrepreneurs have basked in the success of the RV- and boat-storage market. Construction sales for RV- and boat-storage projects have skyrocketed in many areas across the United States. Still, the need for quality storage has not been filled. A recent phone survey of the San Francisco Bay area showed 95 percent to 100 percent of available covered storage spaces were occupied or had waiting lists of several months.
The Rise of Recreation
The RV industry reaps approximately $12 billion a year. Current statistics from the Recreational Vehicle Association show more then 7 million RVs are on the road, and these numbers are expected to rise 15 percent over the next seven years. A recent poll revealed one of six households intends to purchase some type of recreational vehicle in the near future.
The popularity of RVing has increased in the last decade, as enthusiasts across the generations have experienced its fun and convenience. Baby boomers have led the trend as they retire and invest their extra income into leisure for the first time in their lives. Working parents have decided they want to spend more quality time with their children, enjoying the outdoors together. This became particularly true as traditional family values rejuvenated after the 9/11 tragedy. Last but not least, the energetic Generation Xers have been raised watching shows such as MTV's "Road Rules." To them, RVing is synonymous with adventure, freedom and extreme living.
Ironically, as the popularity of RVs has increased among the public, their acceptance by city planning boards has diminished. Most ordinances prohibit larger vehiclesusually those longer than 22 feetfrom being parked curbside for longer then 72 hours. And today's newer housing developments do not have large side or backyards to accommodate these vehicles. Trends clearly show covered parking for hire is the only storage solution, especially as prolonged exposure to the elements can damage vehicle siding, gaskets, seals and tires and cause interior deterioration.
While most vehicle-storage marketing has been geared toward RV owners, recreational boating is also a booming trend. According to the National Marine Manufacturers Association, the number of recreational boaters has climbed over the last several years. There are an estimated 17.5 million recreational boats in use.
The storage needs of RV and boat owners are similar, though boats have additional options of wet slips and vertical storage. There are six basic storage options for boats:
1. Open marina storage/wet slipsThis is one of the more expensive types of storage. Although it provides boat owners convenience, it also has the potential to cause the greatest amount of damage to watercraft. Boats left docked in an uncovered waterway are susceptible to all weather conditions, such as extreme heat, wind and rain.
2. Covered marina storage/wet-slipsThis is the most expensive type of storage. Boats are docked in the marina but are covered with a steel awning for shade. This provides the boat some sun and wind protection, but the boat is still susceptible to water damage.
3. Dry-stack/vertical storageVertical storage is designed for smaller watercraft. Boats are stacked two to five stories high and require a forklift for access. Although this is one of the more affordable types of storage, it is very inconvenient for the boat owner and is simply not an option for larger boats.
4. Open storageUsually, this is little more then a gravel road, chain-link fence and padlock for security. This type of storage provides little to no protection from the elements or vandals.
5. Storage at homeThis option takes up valuable backyard and/or side-yard space and can be an eyesore to neighbors. Many local ordinances prohibit parking in front of homes.
6. Covered dry storageThis is the best type of storage for convenience and protection. Owners can have easy access to their vehicles through locked gates. Boats are protected from sun, wind and water. Successful storage facilities are located close to freeway on-ramps, lakes and other popular boating destinations. Even sites near retirement communities make good locations.
There are three types of covered dry-storage facilities available for boats and RVs:
1. Units with three walls provide upper, side and rear protection. This option provides the best defense for sites with property-line divisions.
2. Covered (fl at or angled) units provide overhead but not side protection. Angled covers generally provide better site coverage and use, resulting in more spaces per acre. These units are similar to a basic carport design.
3. Fully enclosed units, like a large self-storage unit, provide optimum security, privacy and an endless number of optional amenities. Higher-end RV- and boat-storage lots may even provide climate-controlled spaces with running water, electricity, wash bays, dump stations and propane.
There are four reasons to invest in RV and boat storage: easy construction, simple maintenance, an untapped market, and the rising popularity of RVs and boats. To make the most profit, investors need to ride the wave of the vehicle craze and build now. The return on investment can be greater than that of selfstorage, since the building costs are less. Structures are easy to build as there are no moving parts (except in the case of enclosed spaces), and the sites are virtually maintenance-free once operational.
RV- and boat-storage investors need only follow these simple steps to get their project off the ground:
- Locate a property. There are several factors to take into consideration when choosing property for RV and boat storage. Properties near freeway entrances and those visible from the freeway do well. Sites near vacation spots, such as lakes, have an added bonus. Boat owners typically want to park their vessels closest to where they launch. They can actually save money this way, as savings in gas often makes up for storage costs.
- Consider the marketability of the area. Is it a safe area where people would likely want to store their belongings? A few hours on the Internet can sometimes show you the demographics of a location. This is important, since we know the average RV owner is married, owns a home and has a median household income of $56,000. We also know through research that the baby-boomer population is the leading force behind the upswing in the market.
- Find out if market competition is fierce or loose. Don't be discouraged if there is already a facility in town. If the market is right, several facilities can exist at 100 percent occupancy without a problem. In fact, once you begin looking around, you may find several have waiting lists of customers needing storage.
- Look into zoning. The city-planning center or a commercial real estate agency can tell you if a property is zoned for a storage facility.
- Secure financing. You can obtain financing through small-business administrations, banks, personal loans, etc. Some steel companies will lease you the materials needed to build the storage facility, thereby reducing initial start-up costs.
- Choose a design. An RV- and boat-storage professional can suggest the best design based on property size and your budget. He will provide pictures of facilities he has built in the past and work with you one-on-one throughout the design phase.
- Hire an engineer. Many construction companies provide in-house engineering. Engineers will create the blueprints and calculations needed to obtain permits. Unless other arrangements have been made, owners will usually need to pull building permits from the city themselves.
- Build the structure. Construction time will vary depending on the size of a project. Generally speaking, it will take two to three weeks to build 40,000 square feet, once engineering is complete and materials are on site. Construction costs vary depending on the structure. Fully enclosed units will cost between $6.50 and $9.50 per square foot to build; covered units will cost between $3.50 and $6.50 per square foot; and three-walled units will cost between $4.50 and $7.50 per square foot.
- Create a marketing plan. The best advertisement by far is a good location, visible from the freeway or a main street. RV- and boat-storage business owners can market through the Yellow Pages, the Internet, direct mail, etc. Many who hire a professional to create a marketing program are surprised to find they have actually reduced their marketing costs.
How much rent can you charge for RV-and boat-storage spaces?
Spaces range in price from $45 to $750 per month, depending on the type of structure (the coverage) and amenities offered.
What happens if a tenant doesn't pay his monthly fee?
Similar to self-storage, liens are the most common remedy for tenants who refuse to pay their rent.
How much land do you need?
The optimum amount of land is 10 acres. Although you can build a nice facility on 1 acre, it will not leave you any room to expand in the future.
What kind of coverage can you get per square foot?
You can typically get 40 percent coverage.
What's the best layout design?
I recommend putting the buildings back-to-back, with spaces on a 60-degree angle. Use 11-by-30-foot spaces with 35-foot driveways. Spaces designed perpendicular would require 50-foot driveways.
What size spaces do you recommend for the units?
I usually recommend 11-by-30-foot units set back-to-back.
What additional costs should I anticipate?
The daily operating costs associated with running an RV- and boat-storage facility is minimal. Most storage facilities have an on-site manager residing in an apartment to keep constant surveillance. Insurance fees can be obtained through an agent/broker or self-storage specialty insurance agency. This insurance will cover losses due to theft, etc. The cost of security will vary depending on what you provide. The most desirable storage facilities will have locked gates with keypad entry, security cameras, perimeter fencing and special lighting. Other miscellaneous expenses to keep in mind are property taxes and repairs.
How can self-storage facilities appeal to boating enthusiasts?
Contact local boating associations, marinas and fishing organizations. Offer to extend their members a special discount. Consider offering amenities such as boat-trailer rental, boat transport and launching services, fueling, boat repair, etc.
Robert Hayworth is CEO of Baja Construction Inc., which has been at the forefront of the turnkey metal-structure industry for more than 30 years. The company's structure gallery includes self-storage, carports, and RV and boat storage. Baja maintains the highest standards while keeping costs low and construction time to a minimum. For more information about starting a project in your area, call 800.366.9600; visit www.bajacarports.com.