Storage/rental

[sberry]

Is there a demand for rental space, could be big and heated? How hard is it to get customers?

 

[smokey_truck]

Build a RV Garage, RV people really will like that. RV people baby the RVs like me, if I can find a closed RV garage I would not mind to pay twice as much as I pay from the current open storage.

Ganesh

 

[boiler7904]

RV and Boat / jet ski owners are always on the hunt for heated storage especially if the price is right. I've been working in Muskegon since June and it seems like most covered / heated boat storage has a long line of boats to store for the winter. Might also find people that want to rent space for hobbies like woodworking if you have a slab and electrical service for the space.

 

[TWX]

There are very few things worth paying extra to store. RVs, boats, jetskis, ATVs, and cars are about it, in my opinion, and only if people actually get them out and use them often.

I agree with the RV idea if you're going to bother. You would do well to go to one of those RV sales conventions they hold from time to time to get dimensions on a bunch of models, to make sure that you build something that makes sense.

 

[cjbcpa]

Every location will have defferent characteristics; I've had good luck renting my barn to car collectors. If the space is large enough, you can attract renters looking to consolidate their collection that might be scattered around in various locations. I advertised in a local car club newsletter and was able to fill my heated space within days. I suggest the local BMW/Corvette/Porsche club chapters.

Some things I have learned:

- Have a lease that clearly documents you are providing storage only with no insurance coverage.

- Consider the logistics of getting vehicles in and out as well as access to the space. If not, someone will always want to remove or store a vehicle at odd hours with little or no notice.

- I have a lift in my space and that is also spelled out as off limits.

CB

 

[sberry]

I was considering buying a building. Boiler, I am north of Muskegon a couple hrs. I had considered a truck and a crane wouldn't be all that much of an issue. 200,000 sg ft or so, at one time I had read a bit about rates. In will do a little searching, didn't really want to go out on a limb unless I could fill a good portion. Is anyone familiar with rates? It would be cheaper in my area for sure.

 

[Zeke]

Storage rental has the highest rate of occupancy in the real estate industry. I don't see it working in rural settings so well. That's about it.

 

[sberry]

I checked with one big marina, say they are not full. I am thinking of other options, Somehow this seemed bigger when I was in it and not sure how they measure but its only 88k sq ft, I guess that makes sense, 200X400 insulated, super good utilities, in fared heat, 2000A 480 3 ph, they want 400 but am sure they take 3., some rental already in it. What I would really rather house is freight, some kind of truck terminal type thing. I might be inclined to hire the management.

 

[MrSnicks]

There's a retired couple that live down the road from me that own/run a storage business. They're always full. I put myself on the wait list for a 10x20 ($50.00 a month) and took 7 months to get one. I'm on the list still because I wanted 2 units and it's been 3 months since I got the first one.

I use them for classic car storage as I have 3 and my collector car insurance states the vehicle must be in a locked, enclosed storage space. So when I feel like cruising I drive down there in my daily driver and switch out vehicles for the day.

Patrick

 

[TWX]

There's a retired couple that live down the road from me that own/run a storage business. They're always full. I put myself on the wait list for a 10x20 ($50.00 a month) and took 7 months to get one. I'm on the list still because I wanted 2 units and it's been 3 months since I got the first one.

I use them for classic car storage as I have 3 and my collector car insurance states the vehicle must be in a locked, enclosed storage space. So when I feel like cruising I drive down there in my daily driver and switch out vehicles for the day.

Patrick

Don't misinterpret, but if they're completely full up with a waiting list for $50/month, they are in a position to raise the rent.

For them, the optimal price point is one where all of the units are full and the waiting list is short, as they've raised their prices to the maximum point that demand will allow for. If I were them, I'd experiment with notifying customers near the ends of their lease terms that the rent is going up to $75. If tenants complain but don't leave then they're good. If too many tenants leave then they can lower it down to $65 or so and see if they drain down the waiting list a bit.

I know that's not exactly good for you as the customer...

 

[Zeke]

Don't misinterpret, but if they're completely full up with a waiting list for $50/month, they are in a position to raise the rent.

For them, the optimal price point is one where all of the units are full and the waiting list is short, as they've raised their prices to the maximum point that demand will allow for. If I were them, I'd experiment with notifying customers near the ends of their lease terms that the rent is going up to $75. If tenants complain but don't leave then they're good. If too many tenants leave then they can lower it down to $65 or so and see if they drain down the waiting list a bit.

I know that's not exactly good for you as the customer...

Yes, but one of the tenets of good business is to have a low turn over. The bottom line says it all.

 

[sberry]

I like the way TWX looks at that. Its a poster idea for good business, I see a lot of places that haven't added a single bay in 20 yrs, when they are all full rate increase is in order.
I wasn't planning on building, can buy ready to turn the key for 3 or 4$ a sq ft, heck any one thng cost more than that, roof sheeting,,, they paid 2$ just to get the floor painted, cant pour a common garage floor for that. This is insulated, fully heatable, the heating equipment alone, or the wiring cost that much. Lit.
Need some scheme to rent shop space to people from other parts of country, proto type ventures? Maybe even co from international? If I was more suburbia or metro would be looking at "heated parking" Could park 20 semi's in every night without too much congestion. More than that, its 10 times as big as my shop. Probably cost 400 a day to heat in cold weather.

 

[HICKS]

You should find out what insurence will cost you. If you're storing someones $100k RV and the building burns down, you're going to need good insurence.

 

[TWX]

Yes, but one of the tenets of good business is to have a low turn over. The bottom line says it all.

I like the way TWX looks at that. Its a poster idea for good business, I see a lot of places that haven't added a single bay in 20 yrs, when they are all full rate increase is in order.

I know that from the customer's perspective, the customer always wants to get something for the lowest price possible, and the lower the price, the more customers.

From the seller's (or landlord's, in this case) perspective, the idea is to get the highest price possible.

Unfortunately in a fixed market (ie, fixed number of units), the landlord can't spontaneously manufacture new units in many circumstances. Sometimes the landlord can expand the facility, or can build a second facility, but there could be characteristics like location that increase the popularity of a given facility. There could also be competing storage companies that are too close to make it practical to add another facility near the current one.

Raising the rent will certainly drop some potential customers off of the list. They are probably on the list partially because of the price of rent. It will probably also cause some customers to leave, because they too are there because of the low rent. But, there is an optimal point where the demand just outpaces supply, to where there's a short list of customers for the units, where the units are essentially all rented. Yes, it's not necessarily good for the consumer, but it's also bad for the landlord right now, since the landlord isn't getting all that he or she can for the space.

We have a rental house, and we fairly carefully studied our market before coming up with a price point. Even when we did come up with one, we still had ineligible people coming out of the woodwork, like people with felonies from significant criminal property damage, a couple with a menagerie of animals bordering on a zoo, etc. There are a lot of people who can't buy now, because their credit is messed up from the housing market bubble, but are otherwise good renters, so what used to be a $1000/month house can now rent for $1200/month without batting an eye. That doesn't mean that it's necessarily worth forcing a change in tenants, but on the other hand, it does mean that we as landlords would be shortchanging ourselves if we didn't get the most rent possible for the house. I fully expect that some day the housing market will change, and if it does, at best the rent will remain flat, and at worst we might have to lower it a little if the current tenants leave. Fortunately they seem to be the kind of people who don't like moving, as they rented their previous house for something like fourteen years, but we're taking good care of them while we take good care of ourselves.

As for storage units, while I will probably never have one again after the boondoggle that it was last time, I'd much rather rent from a facility that is financially stable because they're in the black than renting from some place that'll be padlocked shut because they aren't charging enough.

 

[sberry]

Good perspective and well thought thru. Part of Americas business issues relate to some of this thinking, especially from the last generation that are still in business or on the tail end. Haven't changed any philosophy especially as the world changes and go out of business. Its really hurt 3rd generation business owners, many have ran hand to mouth without sufficient cash flows to allow for generational ownership changes.

 

[Stuart in MN]

If you're storing someone's $100k RV and the building burns down, you're going to need good insurance.

I was just thinking about this very thing...there's a storage facility just down the street from my office. When I went out for lunch today, someone was pulling into the facility with a BMW Z8 to store it for the winter. Those cars are right in the $100k price bracket these days.