By Peter Harris
Are you wondering what type of commercial real estate to invest in during these unprecedented times? While most beginners have at least heard of RV parks as well as self-storage, very few realize that when you put the two together, you get an incredible niche property type that performs beautifully. Now is the perfect time to invest in RV and boat storage for reasons spelled out below.
Money-Maker Niche Market
There’s so much competition in many forms of commercial real estate investing that it can be difficult to break into the market. However, because RV and boat storage has gone unnoticed as a profitable niche market, there isn’t as much competition. Moreover, RV and storage facilities are in high demand. According to a report by the Recreational Vehicle Industry Association, the third month into the coronavirus, RV sales hit an all-time high. Similarly, boat sales spiked during the pandemic.
While the numbers of RV and boat sales have somewhat dipped, most experts believe sales for both will increase throughout 2024. And, a high percentage of purchasers will need a place to store their RVs and boats. By all accounts, the number of facilities to safely store these toys is far below the demand, making this real estate niche a great prospect for money-making.
High Profit Margins
Compared to single-family home rentals, RV and boat storage has higher profit margins. This is true for a couple reasons:
- With real estate rentals, such as houses and apartments, when someone moves out you must shampoo the carpet, paint walls, clean, maybe change an appliance or two and whatever else is needed. With RV and boat storage, all you need to do is sweep and spray for bugs.
- When a tenant moves out of a single-family home, the occupancy rate is zero until a new tenant moves in. With an RV facility, you have hundreds of units, so even if 10 tenants move out, you’ll still be making money.
During Coronavirus restrictions, many people purchased recreational vehicles to travel as well as enjoy life outside of four walls safely. This increased demand for storage because many cities have ordinances that prohibit parking RVs and boats in a yard or on the street.
The chances that HOAs are going to loosen the reins on vehicle restrictions, outdoor enthusiasts will continue needing RV and boat storage.
RV and boat storage facilities have a more stable income than even its cousin, self-storage. If you’ve seen the self-storage TV series called Self-Storage Wars, you’ve seen storage operators auction off units that have been abandoned. That’s not likely to happen in RV and boat storage facilities because people are storing high-priced RVs, ATVs, jet skis and boats. They’re not going to abandon these expensive toys. Problem solved.
In any commercial real estate investment, you will need to do marketing, maintenance and management. What’s great is you can practically automate all three of those using a software designed for RV and boat storage. Today’s technology can maintain the safety of your site, allow tenants to complete transactions–including renting a unit and paying their monthly fees–all online. For an owner-operator, it doesn’t get much better than this!
Peter Harris is a leading commercial real estate investing mentor, a best selling author, and mentor for people interested in investing in numerous real estate assets. When not building up his own portfolio and helping others become financially free, he enjoys spending time with his family and serving his church. This article was first published by Commercial Property Advisors.