Is now a good time to build an RV&Boat storage?

Question

I own 9 acres directly on FM1314, near the intersection of HW99, in Porter TX. I have plans to build an RV&Boat storage with 160 units (a mix of enclosed and open faced), however, the overall price of the steel structures have gone up 20% in the last 12 months. I also have approved plans for building a 9000 sqft retail strip in the front of the lot. I plan on executing this once the storage facility has met positive cash flow. I would like to hear comments in regards of the current price increase in materials and perhaps what you would do if you where in my shoes. Thanks.

Henry Clark · Answer

Steel prices:

We do Self Storage and surface RV/Boat/Vehicle storage.  Steel prices have gone up.  This is a covid issue.  You could wait till trade fully resumes.  Luckily Steel is only a portion of your costs.  Concrete, land, Erection costs, fence, electric, security; keep your building steel cost down as a percentage of the total.  In other words your total project isn't going up 20%.  For us, the steel increase is not enough of a financial factor.

In your shoes: (don't know if this is a general question, or just in relation to the steel price), but I will answer generally:

There is always a market for RV/Boat storage, its just hard to make the numbers work.  Plus you have a location that is expensive/good location, even if you own it, it has a higher $ usage.  Surface parking is a good "Hold" strategy subject to finding a higher paying usage.

Break the RV market down between RV's around $30k to $50k; and then ones over $150k.

Your enclosed storage will take a rent of $250 to $350 per month to work.  Your lower end RV units won't pay that much.  Your higher end RV's will also be bigger, taking up more space and also more road.  Example a 50 foot enclosed bay for a Class A Mobile unit will require at least a 65 foot drive way, parking at a 90 degree.  Thus your actually giving up more ground for less "total" sq foot rent, with a higher investment up front. Also these folks will want a remote entry fob, which will require about a $3,500 panel door, versus a chain pull up Roll up door.

Surface parking do at 60 degree angles with driver left shoulder back up for all spots.

General comments:

Zoning obviously.

Can you do rock roads and are you required to put Footings on the enclosed.  If you have to do hard surface roads which would be concrete (asphalt won't work) and footings, the cost gets a lot higher.

Also check to see if you have to put in a Storm retention pond.  This will cut down on your 9 acres and the placement/drainage of the pond might impact where your buildings go.

Surface parking on Rock, is a low risk, add as you need, removable product.  Good "hold" strategy.  Takes a long time to break even or pay off (if you include your land cost and don't call it free).

Enclosed or canopy parking, takes up a lot more space because you are dealing with a larger size unit.  Have to commit a lot more investment up front and in larger and not incremental segments like surface parking.

I would look at doing Contractor bays for Electricians, Plumbers, HVAC up front.  Doing mechanics, landscapers, tow truck operators, welding in back.  Take advantage of your central location and easy highway on/off for them.  Along with Surface parking in back.  See if you can do Cargo Containers for storage.  No property taxes.  Add as you need.  Put some rock at the front and back to get them about 4 inches off the ground.  They are expensive now, due to less trade.  Used 20 footers.

You should be able to get $1 per square foot for Subcontractors and less driveway requirements than Enclosed RV.  RV at a small 12w x 50L with at least 14 ft height doors would be 600 sq feet at the top end $350 equals $.58/sq ft plus a large 65 foot driveway.  Subcontractors would be $1.00 per sqft with smaller drive way.  Building would be more expensive.

Below are some notes. Did not update for your situation.

CONSIDERATIONS FOR RV OR
VEHICLE STORAGE

A.  Pull through- The front, pull as far forward as
possible, gives the person next to you an easier angle to turn into,
from behind you.  Align your front with the fronts of all other
vehicles.  Be courteous and leave enough room on the Driver side, so
that RV can open their doors.

B.  Back to back parking-  our locations are set up at
60 degree parking.  Also, they are setup for the driver to back in on
their side, so they can use the lot next to them for alignment.  This
way you only have one blind side on the right side backing in. 
Otherwise you have two blind sides.

We have 20/30/40 foot parking at our location at 26763 Highway 34,
Glenwood, IA.  Each size has a different width due to how hard it is
to park a longer unit at the very front angle of their turn in. 
20’s- 10 wide; 30’s- 12 wide; 40’s- 15 wide.  Although you
could park an RV in any of these sizes, it is easier with a wider
width to make the “front” turn.   Or ask for an end parking spot,
so you are doing a 90 degree parking, but have the whole drive way to
back in with, without a turn.

C.  Canopy- same issues as others, depending on if 60
degree or 90 degree parking.

D.  Enclosed-  Really a matter of width and depth. 
Keep in mind all measurements for storage are relative.  For example:
 A 10 wide x 20 deep x 8 tall unit, with studs, roll up door and door
jambs; is really 9 wide x 19 ft 6 inch deep x 7 ½ foot tall.  Also
if you have a 20 ft boat or Camper, its really 22/23/24 ft depending
on Propeller, bumper or front hitch.

E.  Surface- Rock or hard surface (concrete/asphalt);
If on rock/asphalt put your tongue leg or stabilizer pads on wider
pads to spread the weight out.  These pads are needed on Asphalt
since in hot weather they will sink into the asphalt.

F.  Pest control- we put mouse bait out along the fence
lines and under the units, mow excess weeds and grass.  You should
put both rodent and bug control in your unit.  Dispose of all food
sources, for long term storage.  If you want to be really diligent
with pest control, don’t park next to overhead lights.  They
attract bugs at night and then mice underneath.  Put scented drier
sheets in all compartments and rooms.  Open all cabinets and doors.

G.  Stabilizers-  if doing long term storage put you
stabilizers down.  Most parking is in an open area and the units can
rock and move with the wind.  This will also help with taking
pressure off your tires so they last longer.

H.  Security-  Put a lock on the hitch.  Although you
are in a secure location, RV’s and trailers are the easiest storage
to break into or take without notice.  Recommend you put in motion
sensors or GPS tracking security.  Check your vehicle at least twice
a month.  Most Security systems only maintain footage for 2 weeks due
to camera memory capacity.

I.  Propane Fuel Tanks-  disconnect and store if
leaving for long term storage.

J.  Electronic Lifts- disconnect the battery if leaving
for long term storage.

K.  Insurance- most storage unit insurance policies do
not cover vehicles.  Keep your insurance, just have them adjust your
automobile to fewer miles or just comprehensive
coverage.  Wind, Flood, tornado, Hail, or third party damage or theft
can still occur.  Traditional insurance coverage, RV’s
normally stay a flat rate throughout the year, thus you will still
need to maintain full coverage.  Or, if you seek out a specific RV or
rec vehicle insurance company, you can move in and out of
winterization rates.

L.  Pricing-  use a 30 foot vehicle as an example:

-In the country about a $1 per foot on rock.

-With Paved access and parking spot, this might run $60 to $90

- Enclosed parking this will cost about $120 to $170 for a 30 foot.

- Enclosed parking for a 50 foot, might cost $225 to $350.

The price extremes are the cost of the concrete/asphalt road and the
storage bay.  Also the longer the unit the price goes up
significantly because it takes more driveway width to park and the
type of door changes in both size and type (remote operated).  A 50
ft RV will require about a 70 foot wide driveway to back in.

We are only addressing the long term Parking portion of storage. 
Other items are specific to each vehicle such as water clean out,
Tire/window shades, etc.

Quick non Parking list:

Wheel/tire covers; Vehicle cover.

Remove and store your tires.

Store with a full fuel tank to prevent condensation

Add fuel stabilizers

Place RV completely off the ground to prevent flat spots on your
tires, if left for a long time.

Cover your HVAC, skylights, vents and windows to prevent exposure to
sun and breakdown.

Boats leave your plug out, whether covered or not.

Kevin Bledsoe · Answer

@Alan Biddle I don’t know your particular market but covered RV parking has generally been very successful. My experience has been that these facilities can fill to maturity very quickly. As long as the project pencils, and gives you the return that you desire, it could be a winner. However, I would probably discourage the retail space. If you could add a self storage space instead, that might be a better option. A future buyer would rather have self storage and RV storage versus retail spaces. I think that it would be a better long term option for you.