Similarly, in 2000, more than 11 million boats were in use in the United States. Many states--particularly those on the coasts--have a large population of boat enthusiasts who enjoy water sports. Boats range in type and size as greatly as they do in price. A new market focus has been generated with the enthusiasm for such water sports as jet-skiing.
A contributing factor to the explosion in RV and boat sales includes increased marketing of such recreation, but industry leaders largely attribute this boost to the aging baby boomers, who comprise a large population of adventure-seekers. Most are not content to spend their golden years rocking away on their front porch. The RV and boating lifestyle provides the freedom they crave; but this lifestyle comes with a price tag. For example, basic RVs start at $10,000, with luxury models going for as much as $1.5 million. With an investment like this, storage of recreational vehicles is particularly important.
Increasingly restrictive city ordinances that ban the parking of large vehicles in residential areas have contributed to the popularity of boat and RV storage. Most cities restrict long-term parking of such vehicles, requiring them to be moved every 72 hours. Some ban all parking of RVs and boats in driveways, while others require a petition to be signed by neighbors to allow storage of vehicles over a certain size. Most new housing developments do not allow any overnight RV or boat parking, as houses being built generally have smaller yards than in the past. Finally, many baby boomers are opting to live in adult communities comprised of condominiums and townhouses, which means there is often no yard at all.
As recreational vehicles are a long-term financial investment, concerns about security and protection from the elements have also contributed to the storage need. Theft, burglary and vandalism are serious fears of RV owners, who recognize the value of a secure site. RV- and boat-storage facilities can provide 24-hour surveillance in the form of security cameras or personnel, while streets and yards leave vehicles vulnerable to vandals. There is also the issue of the elements--sun, wind, ice and snow--all of which can be extremely damaging. In the case of boats, marina storage is becoming more difficult to find and leaves the boat exposed to the elements.
Space becomes the final factor. Even when vehicles are permitted in yards or driveways, they are cumbersome and can block such areas for other uses. Facilities specifically designed for vehicle storage make it easier to maneuver in and out of spaces, as well as to perform routine cleaning and maintenance.
The people who will profit in the RV-storage market are those who adjust to meet the demand. There are huge financial opportunities in the RV and boat market. Investors are choosing related storage projects for several reasons:
- There are very few dedicated boat and/or RV storage facilities in existence. Of those that exist, many are open storage facilities with very few amenities.
- This type of storage involves very simple construction. There are no moving parts except for roll-up doors on enclosed units. Unlike self-storage that must be built on a concrete slab, RV storage can use gravel.
- There is an untapped market. Very few facilities exist that offer more than open, uncovered parking. Covered RV parking protects from environmental exposure. Most damage to personal property is a direct result of prolonged exposure to the sun.
- Once the facility is operational, maintenance is limited to cleanup and repairs.
- The return on investment can be greater than that of self-storage since the building costs are less. Rents for storing an RV or boat range from $45 per month for simple open parking to $750 for fully enclosed storage with amenities such as detailing and winterizing services.
Types of Storage
There are four types of RV and boat storage:
1. Fully enclosed units--These are similar to garages and may have heat and electricity. They are totally secure and accessed only by the RV owner.
2. Covered units with three walls--These offer some protection from the elements but do not include a roll-up door.
3. Covered parking--This provides an awning or canopy that protects vehicles from the sun but does not block moisture or wind from the sides. Angled RV canopies fall into this category.
4. Open parking--This is basically a gated parking lot with no protection from the elements.
Before building, it is important to determine the type of storage to be provided. Low-level, low-cost storage can consist of open parking and some canopies, while upscale storage with amenities should include enclosed units. The decision depends on how much the developer can spend, what kind of returns are desired, location, and the clientele the facility hopes to attract.
Before beginning planning a boat- or RV-storage project, you must take into consideration the outside costs and expenses involved. While this ancillary service can be lucrative and construction costs are generally less than those associated with traditional self-storage, there will be other expenses, such as a manager, insurance and security (computer-controlled access, permiter fencing, surveillance cameras and lighting). Advertising must also be taken into consideration, such as a Yellow Pages ad, mailers, signage and a website. Finally, it is important to investigate property taxes. Contact your county assessor and determine how he will value your project before building the site. Sometimes, canopies will be treated as buildings for the purpose of taxation, which is obviously more expensive. All these items will affect the feasibility of your project.
When exploring potential sites for your project, look at the marketability of the product in your area. What are the local demographics? Is there a high population of retirees in your area, or a body of water close by? These indicators can be helpful when determining feasibility. Pay close attention to zoning restrictions and possibilities for land reclassification. Look at the local competition to guage what the demand in the area might be. Finally, be certain you can procure the necessary financing for the job. Some options for securing money include banks, small-business administrations, partnerships, friends and family. Some leasing companies will even lease you building materials, such as steel.
As with any construction project, there are a lot of logistics to consider and expenses to cover at the outset--including the hiring of a quality construction team (architect/designer, civil engineer, contractor and attorney). But not only is boat and RV storage less expensive than many other building categories, return from rents is only the tip of the iceberg. Liens on vehicles are a common remedy for tenants who fail to pay their rents, allowing an operator to sell the property under the state's requirements. This translates into extremely low risk and high potential. Assuming proper research has been conducted on the local market, there are many likely returns in the business of storing recreational vehicles.
Robert J. Hayworth is the CEO of Baja Construction Inc. in Martinez, Calif. Baja has more than 30 years of experience building boat and RV storage projects in all areas of the country, keeping costs low and construction time to a minimum. For more information, call 800.366.9600; visit www.bajacarports.com or www.bajastorage.com.