When it comes to analyzing traditional self storage, there are many resources available. Once we establish the proper trade area - one-mile, three-mile, five-mile, etc. - we can look at demographics and competition. We even have resources such as the SSA Consumer Demand Study to help us understand what customers are looking for, and there is even an establish measure of equilibrium where anticipated demand meets supply. We can survey features, and in most cases, figure occupancies and trailing rates. All of these metrics give us a good indication of probability of success or not.
However, this is not the case when analyzing a boat and RV project. There are no specific demand indicators. There are no specific demographic profiles for these customers. The trade area, though much greater locally, can also include customers coming from all over the United States and even internationally.
Add to this the options for construction; a minimalistic grass field, a paved and lined lot, or an in-between piece of land with landscaped blocks of dirt or composite coverings. There are covered spaces - some with solar panels - large open buildings for valet parking, individual drive-in units, and the ultimate “man cave”. And then there are optional services like auxiliary power, dump stations and wash bays.
To validate how challenging all of this is, even new online services offering development insight do not include any of these 100 percent boat and RV projects in their reports.
First and foremost, how much does the land cost? If you are starting off with a particularly expensive piece of land, you may want to rethink developing solely boat and RV. Including some traditional storage may make more sense. Typically, boat and RV outdoor parking spaces generate only single-digit revenue per square foot per year. Even with development costs kept to a minimum, total revenue may not cover the cost of the land and site work. Let’s assume that the land makes sense. How much and what to build?
So, how do we attempt to determine demand? As I stated earlier, the trade area is much larger than traditional storage. We may look at facilities up to 15 miles away. Visiting and talking with a similar facility in this area will help to determine occupancy, customer needs and wants, and pricing. You will also see what features are available and what are possibly lacking.
Next, we locate and visit boat and RV retailers in this extended market area to question what they hear and say to their customers about storage. It’s also helpful to get a sense of who their customers are and average rental rates spent on a vehicle. This, along with the demographic details, will help to determine average price points.
Finally, we also research in this extended area, usually by county, the number of registered RV’s and boat trailers or registrations.
While this approach works, it is not an exact science for probability of success. However, doing all of this research and gathering this information is usually sufficient to come to justifiable conclusions.
We also recommend that any of these projects include traditional storage. Most boat and RV customers have a need for additional storage. Having this option available on-site increases the probability of securing a customer while adding revenue.
Pros and Cons of Self Storage SBA Loans vs. Traditional Loans
Decide wisely between SBA and traditional loans for your self-storage business. SBA offers lower down payments, but traditional loans provide lender reliability. Make informed investment choices for your storage facility.