Category Archives: #RV/BoatStorage

New Source of Self-Storage Financing: Credit Unions

Issue 65- Boat RV Storage

Introduction… It seems were ever we go we find self-storage properties in large cities or small towns.   Self-storage units also represent an untapped lending niche for credit unions looking to expand their business lending portfolios. And credit units represent a new source of self-storage lending.

Why should any lender, including Credit Unions, consider self-storage.  Here is few stastics that tell us why we’d want to own or why a lender would want to lend:

  • The self-storage industry represents $37 billion in annual revenue
  • $16.1 billion in profit or a 43% profit margin
  • Self-storage businesses grew at a rate of 7.7% from 2012-2017
  • 3.6% future growth is projected in the near-term (2017-2022)
  • There are total of 58,000+ self-storage businesses in the country (roughly 85% of operators are mom-and-pop local operations as opposed to larger corporate or franchised outfits)

In addition, self-storage presents the following benefits to lenders and owners:

  1. Low fixed and variable costs
  2. Low break-even occupancy, generally around 50% with an average occupancy at 85%
  3. Among the lowest default rates of any type of real estate
  4. Not susceptible to economic down turns

In conclusion...The relative safety of owning or lending purchase money are why some lenders will make loans with 25-year terms as apposed to balloon notes as is generally available for commercial lending.

Why We Love Self-Storage More Then McDonald’s

Introduction…Turns out the only thing Americans may love more than Big Macs is hoarding.

There are more self-storage facilities in America than there are McDonald’s restaurants, according to a recent report from the commercial real estate publication REJournals. The U.S. has more than 4 times the number of self-storage facilities than McDonald’s. There are 58,000 self-storage facilities in America compared to only 14,146 McDonald’s restaurants at the end of 2016.

Finding a place for extra scrapbooks, holiday decorations, office records, boats and RVs isn’t exactly cheap either. The average American household is using about 18 square feet of storage at an average rental rate of $1.42 per square foot per month.

The industry makes more than $24 billion in revenue annually. Plus, state and property taxes get to scoop up about $3.25 billion.

Here’s 4 reasons Why We Love Self-Storage More Than McDonald’s:

  1. We are a hyper consumer nation consuming more than $14 billion in goods and services, much of which ends up in storage

  2. The psychology of self-storage is we have month to month leases with no end date so the renter thinks he will move out next month that never comes

  3. We are a nation on the move with 12% of the population moving each year

  4. When the economy is improving, we buy more stuff – when the economy is downsizing we store more stuff

Conclusion: So why are we building more storage facilities?  The population and the economy is growing.  But, more importantly, the trade area for storage is only 3-mile circle.  Take 18 square foot per household in an area and you can see the demand is great and growing.  And we have more room to grow as only 10% of the American households have discovered the joy of self-storage.

For more self-storage investor news, subcribe above.

Safe Clean Secure/ Top Storage Concerns

Safe Clean Secure

The concerns for those renting or looking for self-storage are easy to identify:

  1. Safe- Everyone wants to walk into a storage building or property where safety of the renter and family is not at risk. Antidote: The man who lived onsite at one for sale storage property I reviewed said he was disturbed late at night by what he though was a Meth lab.  I was convinced and did not return.
  2. Clean- Everyone wants to be free from the neighbor’s roaches due to storing dog food or smells from junk getting into their unit.
  3. Secure- Renters want to can store his or her property in a unit that can be properly secured.

Since 70% of our renters are woman and 92% of storage is used by households, the above list resonates.

Location is also important.  Tenants often pick the property that is closest to their home or work. However, in general the above list is how the best one will be sifted out.

One study showed most renters, 65%, were not that concerned with price. That’s why most properties are able to achieve a price increase once or twice a year.

What if I could satisfy the above concerns and cut my development and lease up time in half?  Well, then my return on investment skyrockets.

Our plan is to purchase and develop a series of properties with similar look and management tools to facilitate a future sale to a bigger fish.

Summary: One owner of multiple self-storage properties said he was selling his portfolio for $200,000,000.  Does that intrigue you?  If so, contact me.

This has been Bill Moist, MS, CPA.  Click here to watch “Safe Clean Secure: Top Storage Concerns

Investing In RV/Boat Storage: Five Questions To Ask First

RV/Boat Storage

Introduction...Ask any boat or RV owner and they’ll tell you: Finding a place to store those vehicles can be tough. Homeowners’ associations hate seeing them in driveways; cities ticket them when they’re parked on the street; and apartment-complex managers don’t take kindly to sacrificing their limited parking.

There is a great opportunity for self-storage business owners to expand our business thanks to the growing demand in RV and boat storage and the low supply thereof. There are five questions one should ask when adding these storage units to our new or existing self-storage business.

1. Why Should We Offer Boat/RV Storage?

The first thing we’ll want to ask ourselves when considering the addition of boat/RV storage is whether it’ll be profitable. In most markets, it will. The main reason is the scarcity of the service.

2. What Type of Boat/RV Storage Should We Offer?

The great thing about adding boat/RV storage to your facility is it won’t necessarily cost a fortune. Besides tailoring it to the needs of future consumers, you can modify it to fit your budget.

There are essentially three types of boat/RV storage, ranging from simple to luxurious. The most basic form is a simple parking lot with spaces available for rent. If we have land you can pave or an existing parking lot that rarely fills up, converting it to storage should be easy. Simply use paint to designate rental spots and number them accordingly.

One step up from parking-lot storage is canopy storage. This type features a roof only or a roof and walls on two or three sides. It’ll cost a little more, but it’s a worthwhile investment if you live in an area where it snows or you get excessive sun; tenants will be happy to know that a canopy is protecting their vehicle from the elements.

If we want to cater to customers who expect luxury, you can offer fully enclosed units. These feature high clearance for even the tallest of vehicles as well as roll-up doors, dependable locks and even unit alarms. If you live in an area where you see many high-end boats and RVs, this type of storage will guarantee you business.

3. What Basic Features Do I Need?

Installing boat/RV storage won’t require you to change everything about our facility, but it will necessitate a few tweaks. The most important thing you’ll want to offer these tenants is space—not just to park but also to drive. We’ll need drive aisles that are at least 35 feet wide to accommodate large motorhomes and vehicles that are towing boats or a fifth-wheel trailer. By giving vehicle owners that extra room, you’ll not only improve their storage experience, you’ll prevent them from potentially damaging your property.

4. What Amenities Should We Offer?

If we really want to go the distance, there are a number of additional features and services we can offer. Wash and dump stations, propane sales, vacuums with long hoses and even air pumps are outstanding amenities that are likely to result in consumers choosing your facility over another. Providing electrical hookups in units will wow tenants as well.

5. How Do We Attract These Tenants?

They’re probably already looking for us! All we have to do is let them know we exist. Prioritize Web-based marketing over older techniques such as print advertising. Use our website by including quality photos of your property as well as a detailed list of amenities you offer specifically for boat and RV owners. Use the same terminology on our website that boat/RV owners use, as this will help your facility place higher in online searches.

In conclusion...With increasing numbers of people eager for a taste of life on the road (or sea), RV and boat storage is more desirable than ever. Fortunately, supply hasn’t caught up with demand—that’s where we come in and can create great cash flow.

What Baby Boomers Retiring In Droves Means For Investors

Introduction…More and more baby boomers begin the new year with nothing on their schedule but plans to golf, travel, and spend more time with the grandkids.

The number of Americans aged 65 or older without a disability that aren’t in the labor force rose by 800,000 in the fourth quarter of 2016, marking the resumption of a long-standing trend: the exodus of their generation from the work force and into retirement.

Whether a larger share of senior citizens had previously been incented to remain in their jobs by higher wages or by a need to keep working in order to rebuild their nest eggs after the financial crisis is still an open question. But the recent non-farm payroll reports affirm that the secular trend of rising retirements can only be delayed for so long.

“The RV (recreational vehicle) has replaced the rocking chair, and the whole notion of retirement has changed in the last 10 years,” says Ken Budd, executive editor of AARP magazine .

There are two drivers, according to journalist Samantha Dunn, who’s written about RV retirees for the website Next Avenue. First, wireless technology means you can easily stay in touch with friends and family even while living on the road.

Then there’s the financial angle. Today’s retirees have long life expectancies. Living on the road for a year or five can be a way to spend less than hanging on to the big house or moving into a service-heavy retirement community.

“Even if you buy the $100,000 RV rig, it’s cheaper than dealing with an oversized house and taxes and all the things home ownership entails,” Dunn says.

Maybe the rising number of Americans retiring and the increased in RVs and boats has contributed to our newest property acquisition being 95% leased for the last 3 years and the closest competitor to be 100% leased.

We love RV and boat storage for several great reasons:

  1. These renters tend to be long term renters, at least until the sell their RB or boat
  2. These renters pay their rent on time as no one would let a RV or boat be auctioned off to pay a few months storage rental
  3. These renters are easy to manage as they appreciate a secure storage for their prized RV or boat
  4. These affluent renters rarely visit their storage units

Click here to watch the video What Baby Boomers Retiring In Droves Means To Investors.

Conclusion…Providing needed services and products to the Baby Boomers as they age, has always been very profitable for the providers.  We see the next wave in providing storage for their new RVs and boats acquired as they retire.

Forget New Year’s Resolutions!

 Introduction…Every year Americans fail to keep their New Year’s Resolutions.

But, somehow we think if we just try harder, this year will  be different.

There are scientific and spiritual reasons why we should “Forget New Year’s Resolutions and Instead Prepare Our Minds For Success.”

Click here to watch this powerful 5 minute video.

Click to get 9 Little Known Secrets For Steady Real Estate Income…Free