The even better news is interest in boats and RVs doesn’t appear to be waning. In fact, the U.S. RV market is forecast to grow from a 2021 value of $55.9 billion to $87.98 billion by 2028, according to global market-research firm Fortune Business Insights Pvt. Ltd. In the past five years, more than 2.5 million RVs and 1.6 million motorboats have been registered in the United States.”
A surge in boat and RV sales and a correlating need for vehicle-storage space has created fresh opportunities for investors from self storage and other industries. If you’re in a position to capitalize, here are some things to consider.
One of the ripple effects from the COVID-19 pandemic was that consumers re-evaluated their choices for travel and recreational activities. Many looked for destinations that were drivable and outdoors, which sent the sales of boats and RVs skyrocketing to record highs. The need for places to store these vehicles also grew exponentially, creating ongoing opportunity for self storage operators and investors.
The even better news is interest in boats and RVs doesn’t appear to be waning. In fact, the U.S. RV market is forecast to grow from a 2021 value of $55.9 billion to $87.98 billion by 2028, according to global market-research firm Fortune Business Insights Pvt. Ltd. In the past five years, more than 2.5 million RVs and 1.6 million motorboats have been registered in the United States.
Also driving the market is the fact that most homeowners associations forbid the parking of boats and RVs in driveways or on the street for extended periods. This forces vehicle owners to find storage facilities that can house their large “toys.” RV owners use their vehicles an average of 25 days out of the year, while boat owners operate their vessels 54 days per year, according to the RV Industry Association. The rest of the time, these assets need a place to rest.
Though many self storage facilities offer some form of vehicle storage, boat/RV storage can also be its own business model. As a specialty service, it has its own requirements for location, land and infrastructure. The costs and clientele are also different.
If you’re a real estate owner or investor interested in capitalizing on this lucrative niche market, read on for the benefits and other considerations.
Why Invest in Boat/RV Storage?
Boat/RV storage isn’t a necessity for the average consumer. It’s a specialty service catering to a niche clientele in specific areas. The largest markets based on dedicated acreage are Denver, San Francisco, Dallas and Phoenix; but even if you aren’t in one of these areas, boat/RV storage can be a smart investment.
Here are a few primary reasons:
- High demand and low competition – Right now, consumer demand outweighs supply. Boat/RV-storage facilities, usually found near a body of water, national park or campground, aren’t as common as traditional self storage sites. Whether you can purchase land adjacent to your existing facility for expansion or are game to develop from the ground up, if you’re in the right area, profit is there to be had.
- A broader customer base – On average, boat/RV-storage customers will travel 20 to 50 miles to store their vehicles. That may seem unreasonable, but these owners tend to be high-net-worth consumers with large disposable incomes. They want to store their goods safely and will travel to do so.
- Increased rental rates – When shopping for storage, boat and RV owners seek site features that help ensure security, accessibility and convenience. To enhance profitability and the customer experience, facility operators can tap into income-producing supplementary services such as dump stations, wash stations, in-house retail stores and 24/7 security personnel—all amenities that help them justify higher rental rents. Though these additions may incur higher upfront costs, the return on investment is plentiful.
- Long-term tenants – Boat/RV customers tend leave their vehicles in storage for an average of six to eight months before taking them out, which helps create a long-standing, loyal customer base.
- Low delinquency – Boat/RV storage typically has fewer tenant delinquencies than traditional self storage. Why? Most boats and RVs carry considerable value, sometimes as much as $500,000. With that amount of investment, owners don’t want to lose their assets.
Development Considerations
When building boat/RV storage, whether as part of a larger self storage operation or a standalone facility, there are several important considerations.
The first is storage type. Your business can offer one or more of the following:
- Open Parking Spaces
- Canopy-Covered Parking
- Three-Sided Buildings
- Fully Enclosed Structures
Each unit type comes with its own pros and cons, including varying levels of security and protection from the elements. When deciding which will make the smartest investment, it’s essential to keep in mind;
- Lot Size
- Budget
- Target Audience
Remember, too, that boat/RV storage requires more land than self storage due to the need for wider drive aisles and larger turn radii for what are sometimes massive vehicles. The minimum drive-aisle width is about 50 feet compared to the usual 25. Though this may sound problematic from a cost perspective, it’s important to note that boat/RV storage is often in rural areas where the price of land is less expensive.
A Bright Future
The future for boat/RV storage is filled with immense possibility. Traditional self storage facilities often don’t have the space or need to accommodate large vehicles, so there’s a gap in the market. With demand and pricing for these properties increasing, investors are catching on to this opportunity. As more people buy boats and RVs, storage development will continue to grow.