By now you’ve probably heard that (what seemed like) the entire free world bought boats and RVs during the pandemic. And, full disclosure, I was one of those people.

If you’ve done your homework, you’ve also noticed the same trends Yardi Matrix reported in its Summer 2024 report; “RV and boat registrations have both fallen from record levels in 2021, while at the same time construction of new dedicated RV and boat storage facilities has increased, particularly in smaller markets in the Midwest and Southeast.”

As a storage owner and developer, you are likely asking yourself the same thing I hear from so many of my feasibility clients: Is adding more boat and RV storage to my market a good idea?

While I can’t speak to your particular submarket, in many markets, the answer is still yes. Let’s explore the most important development considerations for those entering this high-potential profit center.

If I rig it up, will they set sail?

IMHO: yes.

But first, let’s talk about the elephant in the room. In a June 2024 article entitled, “It’s a Buyer’s Market for Boats, RVs and Other Pandemic Toys,” the Wall Street Journal documented the buyer’s remorse many experienced. Post-Covid-19, the cost of living increased as did interest rates to finance the shiny playthings which is especially hard on boat and RV sales which are based on monthly payments.

But take heart, because -

1.      All those boats and RVs still need to be stored somewhere

And

2.      Millennials really, really love them

Obviously, boats and RVs are difficult to store at home due to their size and the restrictive covenants in many residential areas.

This creates a robust demand for offsite storage, where owners can securely park their vehicles when not in use. According to the RV Industry Association, over 11 million households now own an RV, a 62% increase from 20 years ago. Similarly, there are around 12 million registered boats in the U.S., with 95% of boats under 26 feet.

Millennials' love for boats and RVs stems from a desire for flexibility, adventure, and outdoor experiences that align with their focus on wellness and sustainability. These vehicles offer affordable, customizable travel options and allow for a work-life balance, especially with the rise of remote work. Social media influencers and content creators also inspire younger audiences by showcasing the joys of van life and boating adventures. The appeal is further enhanced by the ability to explore nature, disconnect from daily stress, and prioritize experience over material possessions.

I’m not saying that sales of new boats and RVs haven’t come down since the record sales of pandemic, because they have.

• The boat market might have become more turbulent as demand eased if not for tight supply constraints that restricted the number of vessels available when demand was high. The National Marine Manufacturers Association projects that total U.S. new and used boat sales this year will be around 22% lower than their 2021 peak.

• The RV Industry Association's September 2024 survey of manufacturers showed some mixed trends within the industry. Total RV shipments for September 2024 were 29,105 units, marking a 3.7% increase compared to August 2023. This growth was primarily driven by towable RVs, such as travel trailers, which saw a 9.6% rise in shipments, totaling 26,245 units.

• On the other hand, motorhome shipments were down significantly, with a 30.8% decrease. The survey highlighted a shift in demand patterns, with motorhome types like Type A, B, and C all experiencing declines. Motorhomes overall shipped 2,860 units compared to 4,130 units the previous year.

• Year-to-date (YTD) shipments, up to August 2024, showed an 8.6% increase in RV shipments compared to the same period in 2023, totaling 231,817 units. However, park model RVs experienced a downturn, with shipments falling by 21.3% year-over-year in August.

But remember, sales of used boats and RVs have increased. Because of the aforementioned buyer’s remorse and the glut of used boats and RVs for sale, prices for used boats and RVs have also decreased, making ownership more attractive.

3.      There is not enough boat and RV storage

Boat and RV storage is still undersupplied market in many regions, despite high demand. This makes it a prime opportunity for developers or storage operators to fill a critical need without facing as much direct competition as traditional self-storage facilities.

4.      Developers are sitting on the sidelines

Yardi Matrix is tracking 52 RV and boat storage properties under construction and 196 that are planned or prospective. Although interest in the sector is high, development activity has slowed, with deliveries in 2024 and beyond expected to be well below recent years.

Compare that to the 3,418 self-storage properties at different stages of development Yardi Matrix is tracking, including 850 under construction, 2,065 planned, and 503 in the prospective phase. By the end of September, the nationwide share of self-storage projects under construction (in net rentable square feet) represented 3.4% of the existing inventory.

There has been a steep drop in sales of RV and boat storage per Yardi Matrix, with only 14 properties sold in the first half of the year versus 46 at the same time last year and 75 sold year-to-date by June 2022, a record year for investment sales. Average price per acre has soared to around $800,000 in 2024 as groups with large allocations to the sector have entered the market and built national portfolios and brands focusing on the niche property type.

What Are the Benefits of Offering Vehicle Storage?

The benefits of offering boat and RV storage go beyond just meeting the growing demand. Here are several key advantages:

High Demand with Low Competition

Not only is there not enough supply, many self-storage and boat and RV storage facilities offer subpar storage options: gravel parking lots, decrepit buildings with swing doors, unit sizes and ceilings in the nice self-storage buildings that don’t accommodate boats and RVs, and canopies that don’t protect the entire vehicle.

Easy to Document Demand and Target Customers

When writing a boat and RV storage feasibility study, I actually have more information to determine unmet market demand than when writing a self-storage feasibility study. Not only can I document the amount of existing supply, I can find out the number of boat and RV owners in a given submarket. Wouldn’t it be nice if you could identify the exact customers needing self-storage? Not only that, but you can reach the boat and RV owners directly by email and snail mail.

Steady and Long-Term Rental Income

Owners of RVs and boats typically store these vehicles for extended periods, especially during off-seasons. While the median annual usage for current RV owners remains steady at 20 days, people intending to buy an RV plan to use their RV a median of 25 days per year. Depending on the state, boat owners take their vessels out between 9 to 24 days per year.

Because of the limited amount of time most boat and RV owners actually spend using their vehicles, many do not discontinue their storage unit rental when the RV is not at the facility. This leads to stable, long-term rental income compared to other storage solutions, which often have higher turnover rates. It’s not uncommon for boat or RV owners to rent storage for months or even years at a time.

Premium Pricing Potential

Because of the larger size and specialized nature of boat and RV storage, operators can charge premium rates when a submarket is undersupplied. Covered or enclosed storage spaces command higher rents, and additional services—such as maintenance, product sales and amenities—can generate ancillary income.

Low Maintenance Costs

Compared to self-storage, boat and RV storage often has lower operating expenses. Covered and open-air lots do not require temperature control or extensive maintenance, making them relatively inexpensive to maintain while still commanding good rental prices. I personally own and manage two Class A boat and RV storage facilities, and self-manage them at a sub-25% expense ratio (compared to the 35% expense ratio for self-storage).

Anchor in the Right Harbor When Determining Feasibility: New Build or Existing Site?

Before diving into boat and RV storage, it’s crucial to determine if the venture will be profitable. Several factors can help guide this decision, from market analysis to site location.

1. Market Demand and Competition

Start by researching local demand for boat and RV storage. Use surveys, demographic research, and industry reports to assess whether your target area has a sufficient number of RV and boat owners. Your feasibility consultant will be able to tell you exactly how many when you get to that point. Additionally, scope out existing competitors. How saturated is the market? What gaps exist in the types of storage offered (e.g., open, covered, enclosed)? An underserved market with high RV and boat ownership is an ideal location.

2. Property Location and Accessibility

Next, consider the property’s location. Sites near highways, lakes, campgrounds, marinas, and national parks are especially well-suited for boat and RV storage. Accessibility is key, as customers prefer easy access to their vehicles. If you’re considering an existing property, ensure the infrastructure can accommodate the size and weight of RVs and boats, including wide lanes, durable surfaces, and large turning radii.

3. New Build vs. Repurposing Existing Property

You’ll also need to decide whether to build from the ground up or repurpose an existing property. A new build offers greater customization and can be designed specifically for boat and RV storage. However, repurposing an existing industrial or commercial site may be more cost-effective, provided the site can be modified for the larger vehicles.

At my facility in Oglesby, Illinois called Bon Voyage Storage, my business partner and I bought an existing facility and put “lipstick on the pig” to increase the facility’s curb appeal and our ability to charge high prices. Because it is entirely valet storage, customers never go past the lovely holding lot, and their boats and RVs don’t care that the inside of the facility, which is a converted warehouse, is just plain ugly.

Feasibility studies can help calculate costs, returns, and expected vacancy rates, helping you determine whether the project makes financial sense.

Product Types: Pros and Cons of Each

When offering boat and RV storage, there are three main product types: open storage, covered aka canopy storage, and enclosed storage. For simplicity’s sake, I am excluding storage condos from this article, as they are a different animal. Each has its own pros and cons, which should be considered when planning your facility.

Open Storage

·         Pros:

·         ·         o    Least expensive to build.

·         ·         o    Can accommodate many vehicles in a large outdoor lot.

·         ·         o    Low maintenance.

·         ·         o    Opportunity to serve other customers with parking for semi-trucks and construction vehicles.

·         Cons:

·         ·         o    Exposed to the elements (weather, sun, hail).

·         ·         o    Less secure than covered or enclosed storage.

·         ·         o    May command lower rental rates.

·         ·         o    Low barriers to entry for competitors.

Covered Storage

·         Pros:

·         ·         o    Provides protection from direct sun, rain, and snow.

·         ·         o    Commands higher rental rates than open storage.

·         ·         o    Can be a happy medium for customers who want more protection without paying for full enclosure.

·         Cons:

·         ·         o    More expensive to build than open lots.

·         ·         o    May be as expensive to build as enclosed storage due to wind load requirements, without being able to charge the same rental prices.

·         ·         o    Doesn’t offer full protection from weather or theft.

Enclosed Storage with Individual Units

·         Pros:

·         ·         o    Offers the highest level of protection against weather and theft.

·         ·         o    Customers are willing to pay premium rental rates, especially for units with automatic doors and electricity.

·         ·         o    Attracts business tenants and can double as “flex warehouse.”

·         Cons:

·         ·         o    Most expensive to build and maintain.

·         ·         o    Requires more square footage per vehicle.

·         ·         o    Higher costs may reduce the potential customer base.

Warehouse or Interior Dry Stack Storage

·         Pros:

·         ·         o    Offers the highest level of protection against weather and theft.

·         ·         o    Customers are willing to pay good rental rates.

·         ·         o    Tenants do not need to worry about parking their vehicle (remember, boat and RV owners only use their vehicles fewer than 20 days per year on average and let’s face it, backing these big rigs is hard!).

·         ·         o    Good conversion opportunities.

·         Cons:

·         ·         o    Tenants cannot access their boat or RV without giving notice.

·         ·         o    Requires skilled employee.

 

Rig for All Conditions: Development Considerations for Boat and RV Storage

When developing boat and RV storage, there are unique considerations that differ from traditional self-storage.

Wider Drive Lanes

RV and boat storage requires significantly wider drive lanes and parking spaces than standard self-storage facilities. Most RVs range from 8 to 12 feet wide, and with the need for maneuvering space, drive aisles should be at least 40 to 60 feet wide to accommodate larger vehicles and ensure ease of access.

Durable Surfaces

Since RVs and boats are heavy, the storage surface needs to be durable enough to withstand constant use. Asphalt or reinforced concrete pads are ideal for minimizing wear and tear on both vehicles and the parking surface. Gravel may be less expensive upfront but can result in higher maintenance costs down the line due to erosion and shifting.

Security Features

Due to the high value of stored RVs and boats – and the fact that they are an attractive nuisance - security should be a top priority. Consider investing in surveillance cameras, keypad access, and perimeter fencing to deter theft. Enhanced lighting also helps improve safety and visibility at night.

Sometimes all of these deterrents are not enough. Our facility in Fort Worth, Haslet Boat & RV Storage, has been broken into five times and we now have a $50,000 monitored security system. Despite this and our high-traffic location in an affluent area, thieves still try to drive through and cut the fence.

Drainage and Weather Protection

Water runoff can be an issue with open storage and canopy lots. Ensure that proper drainage systems are installed to prevent flooding and damage to vehicles. Covered and enclosed storage also requires thought to weatherproofing, particularly in areas with heavy snowfall or rain.

Additional Advice on Building Vehicle Storage

Developing a successful boat and RV storage facility requires careful planning, market research, and execution. Here are a few additional tips for maximizing success:

Keep Your Compass Pointed to Expansion

If possible, design your facility with future expansion in mind. Even if your budget or demand in your market starts small, it’s likely to grow over time as more people purchase RVs and boats and you are in an area with population growth. Leaving space for additional storage units or parking spots can help your business scale as demand increases.

Offer Value-Added Services

Customers appreciate convenience. At Haslet Boat & RV Storage, we offer premium services to all tenants -whether open parking, canopy or enclosed – for free, including a dump station for RV, a wash station, potable water, an ice machine, air compressor and vacuums. Consider offering additional services such as vehicle maintenance like shrink-wrap, summarization and winterization, boat and RV specific products like tire blocks, propane and firewood, or even a dog park or kids playground! These services can help differentiate your facility from competitors and provide additional income streams.

Invest in Marketing

Effective marketing can help you fill vacancies quickly. Direct mail campaigns, partnerships with local dealerships or marinas, billboards and yard signs can drive traffic to your facility. Highlight security features, convenient access, and any value-added services in your promotional materials.

Dropping Anchor on This Topic

Boat and RV storage is a fast-growing market that offers attractive returns for developers willing to invest in the right location, facility design, and customer service. With long-term demand driven by increased outdoor recreation, steady rental income, and relatively low maintenance costs, this niche within the self-storage industry has significant growth potential. By charting your course carefully and considering the factors outlined above—from feasibility studies and product types to development logistics and future expansion—you can position yourself to capitalize on this exciting opportunity.