Just when you think youve got self-storage figured out, boat and RV storage slips in with a new twist. Many facilities have had a few boat and RV spaces all along, so whats the big deal?
Making the numbers work on a facility primarily provides boat and RV storage may be more complicated than it appears. In a nutshell, the elements for putting together a self-storage package are feasibility, design, construction and operation. Aiming for boat and RV storage casts each of these factors in a different light.
Feasibility studies evaluate potential tenants and existing competition, estimate what can be charged for rents, and help determine unit mix. The ultimate goal is a yes-or-no answer to the question, Can I make enough money at this location to have a profitable business?
The self-storage experience tells us people prefer to store their belongings close to home, on their way to work, or near another frequently traveled-to destination. Yet if theyre seeking boat and RV storage, they may be willing to expand their horizons by choosing a site near a favorite recreation area or main route out of town.
Evaluating potential clientele just became more difficult. The competition may be a first-class facility with covered or enclosed parking, but it may just as easily be little more than an open parking area. Rates may be very low indeed. There are a number of unit-mix options for boat and RV storage, but they are all relatively large, space-intensive options. Is there enough demand for an upgraded facility? The ongoing question is whether reasonable rental rates will cover costs.
Crunching Numbers
On a square-foot basis, if a 5-by-5 unit rents for $45 per month and a 14-by-40 space rents for $145 per month, rent on the small unit is $1.80 per square foot, but the large space brings in a mere 26 cents per square foot. More money is made on small units than on large ones.
Its difficult to generate enough income to cover the cost of taxes, insurance, operations and mortgage for a facility devoted to boat and RV storage, particularly if the land is purchased at current market rates. Land taxes and insurance make or break many deals. The clientele and the type of storage they are willing to purchase make all the difference. But then you get back to the question, Who will your tenants actually be? Feasibility is a little tougher. Location is even more important.
The Big Picture
What about design? Boat and RV storage requires a surface that supports heavy vehicles. Drives and turning radiuses must be wider than normal and accommodate lengthy vehicles and trailers. Even if nothing more than open parking is offered, surfaces and spaces must be designed to accommodate tenants needs. Pull-through access provides the greatest maneuverability but also takes up the most space. The less driving skill the facility requires, the more comfortable people will feel parking there.
Wide roads with industrial-strength drives and corners are needed. Drives should be 50 to 60 feet long for perpendicular spaces, and at least 35 feet for spaces angled at 60 degrees.
Taller units create more wind resistance. The simplest storage structure is a tall, canopy style, with only a roof to provide cover from sun and severe weather. But these roofs can catch wind like a parasail. Because of the potential for lift, canopy units must be appropriately anchored, with strong supporting studs and purlins.
A manger-style unit is roofed and enclosed on three sides, possibly with individual partitions. Adding walls decreases wind lift, but all large structures require deeper footings and greater structural strength than traditional self storage.
The third type is a completely enclosed individual unit. These units require oversized doors (sometimes wind-rated), and can be individually alarmed, even climate-controlled. Wider, deeper units require lighting.
It may appear less expensive to build boat and RV units than to build traditional self-storage, but its usually not the case. Size increases cost. Metal costs are usually slightly higher for boat/RV storage than for with traditional units (unless the traditional storage is climate-controlled).
Versatility Through Phasing
Boat and RV storage can add versatility to a self-storage operation. Take the case of phased projects: When the ultimate goal is smaller, higher-income units, but cost or demand prohibits all units being built at once, unused land can be used for outside storage until the following phases are implemented. This way, RV storage becomes an income-producing space-holder rather than an end product.
On the flip side, if boat and RV storage is the final goal, phasing can be the least costly entry into the business, producing income with a minimal investment. Basically, you need a parking surface, fencing and lighting, and all options are open for future upgrades. Tenant response can dictate what is built next. Dont forget to plan well in advance for your phased project to control costs.
Ingress and egress should be planned for the project as a whole, taking into consideration the largest vehicles to be accommodated. Drainage for the entire property, rather that just the first phase, is very important. A 2-acre project (phase one) may not require a detention pond, but a 5-acre site (including phase two) will. A detention pond, or any factor having to do with the ground or underground requirements of the project, must be considered in the first phase to avoid costly problems.
Extra Income
Amenities for boats and RVs provide a plethora of income-producing options, such as dump stations, fuel and propane sales, cleaning services or wash stations, electrical hookups, camping supply sales, etc. These are typically offered only at higher-end facilities and can be labor-intensive and costly. Income can also be increased by adding smaller traditional self-storage units to the package. Often, those who store boats and vehicles need an additional unit for belongings needed on any given outing.
Miscellaneous Issues
Row boats as well as half-million-dollar homes on wheels can find their way to the same storage facility. Many municipalities have specific laws and regulations regarding outdoor storage or the storage of vehicles containing fuel. Insurance requirements may also differ. Malicious mischief plays even more of a role when outdoor parking is a factor. Consider your security solutions wisely.
The simplicity of collecting money for allowing parked vehicles on your land is enticing, but not always realistic. Evaluating a location takes a little more research than traditional self-storage, but a wealth of opportunity exists for facilities that find the right place, space and clientele.
Donna May is president of Cross Metal Buildings, a member of The Parham Cos., which specializes in assisting first-time builders, providing cost-effective, high-quality commercial, agricultural and self-storage buildings throughout the Southern United States. Ms. May is the former president of Joshua Management Co. and a commercial real estate broker. She has been a partner in 11 start-up self-storage projects totaling more than 703,500 square feet. For information, call 210.477.1260; e-mail [email protected]; visit www.crossmetalbuildings.com.