No place to store your boat or RV? Thinking of opening a boat and RV storage business? You’re not the only one.
Couldn’t find a place to store your boat or RV and thinking of opening a boat and RV storage business? You're not the only one.
Why right now is the best time to start a boat and RV storage business, and the steps to get there.
As a self-storage feasibility consultant, I am often the first person people call when they begin exploring the idea of building a boat and RV storage facility. And as a serial entrepreneur myself, I am always excited for them too. Because I am asked a lot of the same questions over and over, I thought it would be helpful to answer the most commonly asked questions about what to do to start a boat and RV storage business.
Is boat and RV storage a good investment right now?
Yes, it sure is (as long as you build the right facility in the right place for the right price).
Bear markets are a great time for start-ups. According to the Kaufman Foundation, more than half of the Fortune 500 companies were started in a recession or bear market. During economic downturns, low borrowing costs (although credit may be tough to get) and new business models (such as unmanned boat and RV facilities) propel entrepreneurship.
And boat and RV storage facilities have a unique position because unlike most start-ups, it is secured by a hard asset: real estate.
The most compelling factor for most would-be boat and RV storage entrepreneurs is the strong consumer demand for these vehicles during the pandemic. Despite forced retail closures this spring and supply chain shortages, 2020 boat and RV sales are expected to surpass 2019’s.
But don’t take it from me, take it from the horse’s mouth:
“There’s a 10% increase in retail sales that’s been trending out this year, but we’re 20% down in manufacturing output because of shutdowns and supply chain shortages,” National Marine Manufacturers Association President Frank Hugelmeyer said during a November webinar to discuss the latest numbers. “That’s not just boating. That’s across RV and other motorized sectors as well—anybody who’s trying to create an end product and has an input has dealt with supply chain disruption. It’s very difficult to see when that’s going to balance out, it’s going to be difficult to forecast because of that discrepancy we’re seeing.”
“The demand for RVs continues to be strong heading into the fall and the industry is on track to surpass last year’s numbers, despite the six to eight-week closures earlier this spring,” said RV Industry Association President Craig Kirby. “Between the growing trend to work and learn from your RV and the incredible fall and winter RV travel options, we do not see the demand for RVs going down anytime soon.”
How do I start a boat and RV storage business?
This is a multi-step process. In the end, how long it takes and whether or not you actually open your boat and RV storage facility is going to depend more on taking action than anything else.
Research the boat and RV storage industry—click here for a list of resources I recommend. This is an ongoing process, not something you will get done in a day, a week, a month or a year. Keep moving forward on the other steps as you educate yourself.
Familiarize yourself with your financing options and establish a rough budget for how much you have to invest and what you can expect to get a loan for. Potential lenders can provide you with a list of everything you will need to provide. This is a good time to begin working on your business plan and gathering the documents you will need to provide a lender.
Research the market you are interested in to determine if you think it will support a boat and RV storage facility. Find out the rental and vacancy rates for competitors and plug the pricing numbers into a calculator (I like Trachte Building System’s investment calculators) to see how much you can pay for land in different scenarios.
Look for land—seek out parcels that are already zoned for boat and RV storage or where boat and RV storage is allowed with a special or conditional use permit.
An ideal parcel is 5 to 10 acres, flat, with easy access and visibility on a well trafficked road.
If you know an engineer, ask them to check out the parcel with you for red flags. If you don’t know an engineer, now is a good time to get referrals to an excellent one.
Secure the land—put it under contract with the stipulation that your earnest money is fully refundable if you are unable to get financing. (Don’t worry, you won’t be able to get financing if your feasibility study is negative and you decide not to build. You are not going to have to buy the land in that case.) Try to get as long of a due diligence period as possible—six months with two one-month extensions is ideal.
Get a boat and RV storage feasibility study done to make sure the market will support your facility and have an expert weigh in on its potential return on investment. A boat and RV storage feasibility report should provide recommendations for the type of storage to build (enclosed, canopy and/or open parking), unit mix, pricing and phasing recommendations, a twenty-year proforma and financial model, and marketing communications recommendations.
Engage your engineer and determine what topographical, geographical, soil testing, surveys, and site plans you will need and how much they will be. Get started with the ones you will need to obtain construction estimates right away.
Obtain three construction estimates from general contractors. Unless you have a development background, I do not recommend acting as your own general contractor.
Finalize your business plan and apply for a loan. I recommend contacting at least three lenders.
There are multiple steps taking place within each of these steps. And there are multiple steps after your loan is approved. And after you begin construction. And before you open your facility. Remember, if it were easy, everyone would be doing it.
If you get stuck at any point along the way, feel free to drop me a line. Even if I don’t know exactly what you should do next, I almost certainly know someone who does that would be happy to help.
Trust your instincts. They were right when they told you the boat and RV storage industry is a great business, and they will be right when you do your research and take action to open your own boat and RV storage facility. Go get ‘em, Tiger!