ROI/CAP Rate on RV Boat Storage?

[126whitetail]

Hello All,

What is a typical CAP rate for RV/boat storage enclosed units?

Assuming no financing and using property we already own, just improving it with gravel, fencing, etc.

[Clarkstoragellc]

The easiest way to answer your question is for you to go out on Loopnet and look up Similar locations and get the CAP rates from those listings. There was a large one for sale near Dallas recently, but it is mixed (Enclosed, Canopy, surface).

The way your question is posed, no one can answer your question. Even if they do answer the question, the data is not useful, since not apples to apples.

Unless you are a "Financial" investor and are trying to compare similar assets, CAP rate is not useful for you as an individual developer. Just calculate your returns.

Before going further in responding, are you in a market with $250,000 to $700,000 RV's? Are your customers willing to pay $250 to $350 per month for storage? If not, your market won't support RV enclosed storage, unless you have purchased a very very cheap old massive building with Concrete all around for driveways that you are rehabbing.

Run the numbers.

[Grizz]

We have people using boat/rv enclosed storage for just about everything, not just boats and rv's.

A place around the corner built a few LARGE buildings with heat (I'm in Alaska) for these and the na-sayers said it was a waste of good money. Well actually it was for the then owner who priced everything at rock bottom prices just to fill the units. He sold it to get out from under it and now the new owner has raised the prices and probably making a few $$. I think he has room to go higher but thats a different story... My point is those units house multiple vehicles, toys and household goods for many of the snowbirds and big equipment for the local oil refineries, not just commercial boats and RV's

[Grizz]

As far as CAP rate goes, why would it matter what the other business are doing? Just make your property as appealing as possible on the outside (landscaping, security, etc...) and the inside (your books, occupancy, etc...). 100% occupied is worthless if the rates are too low and 50% occupied may look fantastic if your rates are high enough

[BobbyE]

Agreed, I have 2 facilities and we are constantly on looking for a 3rd. I do browse Loopnet, but I'm looking at sites with medium occupancy and below market rates. The first thing I would do is add a website and raise the rates. From my experience it's the quickest way to add to the valuation.

[Acres]

Can't tell you exactly, but Boat/RV storage is an emerging sub-sector of self storage with Class A - C properties. As with other commercial properties, your cap rate will be determined a lot of the quality of your facility. The better the quality, the lower a cap will usually be.