Growing Demand for RV/Boat Storage Facilities

By: Kaitie Moore Underwood | REALTOR®, Blue Collar Commercial Group

As RV ownership surges across the United States, self-storage operators are looking to expand their offerings to include RV storage facilities. The rising popularity of RVs is being driven by several factors, including the trend towards remote work and the desire for safe and socially distanced travel during the COVID-19 pandemic. According to the RV Industry Association, more than 11 million households now own an RV, with an additional 1.6 million households planning to purchase one in the next year.

For self-storage operators, this presents a significant opportunity to diversify their revenue streams and capitalize on the growing demand for RV storage. The self-storage industry has traditionally focused on providing storage solutions for smaller items, such as furniture and household goods. However, many operators are now recognizing the potential for RV storage as a profitable addition to their portfolio.

RV storage facilities require specific design features, such as wider drive aisles and oversized parking spaces, to accommodate larger vehicles. However, with the right investment, they can provide excellent returns. In fact, according to Inside Self-Storage, self-storage facilities that include RV storage units typically command higher rental rates and lower vacancy rates than traditional storage units.

One way that investors can determine the potential profitability of a self-storage facility is by calculating its capitalization rate (cap rate). The cap rate is a metric that measures the expected return on investment for a property based on its net operating income (NOI). It is calculated by dividing the property’s NOI by its current market value.

Investors can use the cap rate to assess the risk and return of a self-storage investment, as well as compare it to other investment opportunities. Generally, the higher the cap rate, the higher the potential return on investment, although this may also indicate higher risk.

When investing in RV storage facilities, investors should consider factors such as the local market demand, competition, and zoning regulations. It is also essential to conduct thorough due diligence, including a property inspection, financial analysis, and tenant analysis.

In addition to purchasing an existing self-storage facility, investors may also consider developing a new RV storage facility. According to Commercial Property Advisors, this can provide the advantage of custom design and higher rental rates. However, it also requires more upfront investment and a longer time frame to realize returns.

To successfully invest in RV storage, it is crucial to understand the unique needs of RV owners and how to market to them effectively. RV owners are often looking for secure and convenient storage solutions, as well as additional amenities such as electrical hookups and dump stations. By providing these features and targeting the right customer demographic, investors can maximize the profitability of their RV storage investment.

In conclusion, as RV ownership continues to surge, self-storage operators and investors have an excellent opportunity to capitalize on the growing demand for RV storage facilities. By calculating the cap rate, conducting thorough due diligence, and understanding the needs of RV owners, investors can make informed decisions and maximize their returns. As such, investing in RV storage could be a viable option for those looking to diversify their real estate portfolios and capitalize on emerging trends in the market.

Please call me with your questions. I would be thrilled to be a resource to you should you be considering Commercial Real Estate investing!

Kindly,

Kaitie Moore Underwood

REALTOR®, Residential & Commercial

737-203-4178

[email protected]

Bluecollarcommercialgroup.com

(Sources: https://www.sparefoot.com/self-storage/news/9566-operators-look-to-expand-rv-storage-as-ownership-surges/ https://www.insideselfstorage.com/facility-value/capitalization-rate-how-metric-helps-determine-self-storage-investment-risk-and https://www.commercialpropertyadvisors.com/how-to-invest-in-rv-storage/)