Investing in Boat & RV Storage - The Good, The Bad, and The UglyMay 04, 2023
Today we’re going to talk about something a little bit different. Boat and RV storage is a hot topic in the real estate industry, and for good reason. With the sales numbers for boats, RVs, and campers at an all-time high, there is a growing need for storage solutions for these large items. However, as with any investment opportunity, there are pros and cons to consider. For our purposes, the question we want to answer is, “How do people store their recreational vehicles and how can we, as self-storage investors, capitalize on that need?”
So today, we will take a look at the good, the bad, and the ugly of boat and RV storage and explore the opportunities that exist within the asset class.
The demand for boat and RV storage is huge, and in most places, it is underserved. This means that there is a real opportunity for investors to build and operate storage solutions for these large items. However, as the demand for boat and RV storage increases, so do the costs of building and operating these facilities.
One of the biggest advantages of boat and RV storage is the increased demand for these types of units. This is due to a number of factors: the increase in sales of boats, RVs, and campers, as well as the regulations around what you can do with these large items. In most cities, it is not allowed to park boats and RVs on the side of the road or in neighborhoods, and most homeowners associations have restrictions on these types of items as well. This means that there is a growing need for storage solutions for these large items. This creates an obvious opportunity for investors to provide storage options for boat and RV owners.
While the demand for boat and RV storage is high, there are some downsides to consider. One of the biggest challenges is the cost of building and operating these facilities. Land costs and building costs are at an all-time high, which can make it difficult to generate enough capital to make the investment worthwhile. Additionally, large units like RVs and boats tend to generate less revenue per square foot than traditional storage units, which can make it difficult to turn a profit.
Another challenge with boat and RV storage is the level of competition that is popping up. One of the downsides of these lucrative opportunities is that sooner or later, more investors realize the opportunity and want to get in on it. As more investors see the opportunity in this asset class, more facilities are being built, which can make it difficult to stand out in the market and turn a profit.
One of the ugliest aspects of boat and RV storage is the potential for damage to these large items. These units are expensive and can be easily damaged if they are not stored properly. Additionally, if the storage facility is not well-maintained or does not have proper security measures in place, it can be a target for theft. This creates a huge hurdle that investors need to consider. It also creates a liability issue for self-storage facilities. Damage to boats and RVs is a huge consideration to take into account. This will continue to be a problem unless investors learn how to adapt their facilities to these challenges.
Despite the challenges of building and operating boat and RV storage facilities, there are still opportunities to be had. One potential opportunity is to focus on building facilities in areas where the demand is high but the supply is low. You can also look at locations near neighborhoods with strict HOAs against these types of vehicles, and vacation destinations where people use their RVs and boats but need a place to store them during the off season. These are opportunities to consider.
Another opportunity is to offer additional services, such as maintenance and repairs, to attract customers to your facility. A full-service shop, for example, could be a great way to generate additional revenue and attract customers who are looking for a one-stop-shop for their boat and RV storage needs.
The need for boat and RV storage presents a unique opportunity for investors to tap into a growing market. As the demand for these units increases, and regulations around storing them become more restrictive, the need for storage solutions will continue to rise. By understanding the good, the bad, and the ugly of this asset class, investors can identify the areas of opportunity and make an informed decision about whether or not to invest in boat and RV storage. Through proper research, planning, and execution, investors can capitalize on the growing demand for boat and RV storage and create a profitable business that can generate wealth.
To wrap things up, let’s take a quick look at some facts and statistics regarding boats and RVs.
- According to a report by the Recreational Vehicle Industry Association (RVIA), the RV market has seen significant growth in recent years. In 2020, wholesale shipments of RVs reached an all-time high of 446,900 units, a 20.2% increase from the previous year. The report also predicts that this trend will continue, with wholesale shipments projected to reach 468,200 units in 2021 and 491,100 units in 2022.
- The National Marine Manufacturers Association (NMMA) also reported a surge in the boating industry. In 2020, the U.S. boating industry saw a 14% increase in unit sales and a 15% increase in dollar sales compared to 2019. Additionally, the NMMA's 2021 Recreational Boating Statistical Abstract shows that the U.S. boat market continues to grow, with an estimated $43 billion in revenue generated in 2020.
- Furthermore, a report by IBISWorld, a market research company, predicts that the self-storage industry, which includes boat and RV storage, will grow at an annualized rate of 2.9% to reach $40 billion by 2025. This growth can be attributed to an increase in demand for storage solutions as a result of a growing population and the rise in second-home and recreational vehicle ownership.
To summarize, these statistics show that the sales of boats, RVs and campers are on the rise and the industry is booming, which creates a huge demand for storage solutions. The self-storage industry which includes boat and RV storage is also expected to grow in the coming years. It’s an exciting opportunity for investors.