Day 17: Reading a Boat & RV Rent Roll What Self Storage Investors Miss

Welcome to day 17 of the Boat and RV 100 series. I'm Joe Downs with the Storage Muggles, and today I'm showing you how to read a boat and RV rent roll without making the mistakes that self-storage investors almost always make, specifically around seasonal occupancy patterns that look alarming until you understand what you're actually looking at. This is in theory. We've seen deals killed by investors who saw 68% summer occupancy and walked Not understanding that that facility was outperforming its market, perhaps. And if you want the full deal evaluation framework with AI-powered tools, you should head over to storage moguls.ai. storage moguls.ai. It's our free community to join. We've got GPT tools there, multimodal learning across every storage vertical. And that's exactly why we built Storage Moguls, actually. It's a community made up of real people, actual operators just like you. 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But back to today, because if you apply your self-storage benchmarks, benchmarks, if you just went through the Storage 100 series and if you— everything you learned there, if you apply that to the boat RV rent roll, you might misread the asset So we're going to get into how to read it right, because when a self-storage investor opens a boat and RV rent roll and sees, like I said, 68% occupancy in July, their first instinct sometimes is something's wrong, and it probably isn't. 68% in July at a boat and RV facility often means the boats are out on the water and the RVs are at the campgrounds. That might actually be a very healthy facility. Flat monthly revenue is the expectation in self-storage. For some boat and RV facilities, revenue— actually, for a lot of them, the revenue is supposed to spike in the fall and move-in season and soften in the summer. A flat monthly revenue line would be a red flag for some facilities in this vertical. It means— it might mean the facility has no seasonal tenants and is serving a price-sensitive base, price-sensitive tenant base. That stores year-round because they're not actually using their vehicles. The annual average occupancy number is particularly dangerous if that's all you focus on. A facility that runs 95% in October, 90% in November, 75% in July, and 70% in August, for instance, might show an average annual 84% occupancy number, which looks fine. But the pattern tells you everything about the health of the demand cycle. Read the monthly data. Monthly, not the annual. Here's what you should expect to see on a healthy boat and RV rent roll by season. Fall, you got the rush September through November. Occupancy spikes to 90%, maybe 100%. This is when the boats come off the water and the RVs come back from the summer trips. In markets with strong forced demand, waiting lists form in October. That's your revenue peak. Winter, you got December through February. It's cold. Climate facilities stay full, but boats don't go back on the water in January. Warm climate facilities may see some summer, summer, winter travel, RV movement as snowbirds, let's say, head south. So watch for some regional variation there. In spring, you got moveouts, right? March through May, occupancy softens as the active season begins. Boats Start going back in the water and RVs start heading out on the road. A well-run facility retains 75 to 88% of its tenants through the spring because seasonal tenants maintain their spaces even while their vehicles are in use. In summer, you got the gap, the June through August, the, the planned trough. Vehicles are in use, tenants are storing on the water or at campgrounds. Your occupancy is going to dip. Let's say 65 to 80%. That's normal. It's healthy. It's— if it's at a well-run facility, that can still be healthy. A facility below 65% in the summer may have some retention problems, or it may be in a warm climate market where tenants are genuinely less active. Context matters. 5 things to look for beyond the headline occupancy number here. One is seasonal variance. Does the occupancy follow the expected cycle? High in fall, softer in summer. A facility with flat occupancy year-round may look stable, but it might mean the facility is serving mostly year-round storage tenants who aren't actually using their vehicles. That's a different tenant profile than the active boat and RV user. Waiting list documentation. If the facility has a documented waiting list— names, dates, contact info— that's your demand ceiling evidence. Tells you the market is genuinely supply constrained and your fall move-in occupancy is unlikely to be a problem going forward. Then 3, look long-term tenant concentration. What percentage of tenants have been there 3 or more years? In a healthy boat and RV facility, you'll typically see a significant portion of long-tenured tenants. That's because the switching cost is real and relationships are wrong or strong and In a well-run facility, they don't want to lose their spot. It's what they know and they're happy with it. Low tenure concentration suggests a churn problem. That's probably worth investigating. And 4, let's talk about seasonal pricing variances. Does the rent roll show different rates for fall move-in versus spring tenants? A sophisticated operator prices into the seasonal demand curve. Higher rates in the fall rush, retention pricing in the spring. Flat pricing year-round is a value-add signal. You can implement a tiered strategy and move the NOI. And then 5, revenue per space. Forget revenue per square foot like we do, like we look at in self-storage. In boat and RV, tenants pay per the space. Revenue per space is your true performance metric. A 100-space facility that's generating $15,000 a month is performing differently From one generating $22,000 a month, even if they both show an 85% occupancy. Here's 5 rent roll flags that for each one you have, here's what you want to ask. So summer occupancy below 60%. This is below the normal trough range and worth investigating. Is it facility specific or is this a market-wide problem? Check whether competing facilities are also underperforming. If they are, The market may have a structural issue. If they're not, problems may be operational. Maybe it's access, service, pricing, or a specific competitive disadvantage. High tenant turnover with many short tenures. In boat and RV, long-term tenants are the norm. So rent roll with fewer tenants over 2 years, well, that tells you something's driving churn. Maybe it's service issues, rate increases that weren't justified, or competitor opened nearby. Find out which one before you make an offer. No seasonal rate variation despite obvious seasonal demand? This is actually a value-add signal, not necessarily a red flag. But understand why it's flat. Is the operator unsophisticated, or is the market genuinely not supporting seasonal rate variation? That answer will change your pro forma. How about flat or declining revenue over 24 months? Get at least 2 years of monthly data. Get 3 if you can. A single year can be distorted by an unusual event. 2 years shows you a trend. Is revenue flat because the market is soft or because the operator isn't raising rates? Both require different responses. Single large tenant over 20% of revenue? That's concentration risk. I don't care what business you're in. One tenant representing a fifth or more of your revenue is a significant exposure. What is their lease term? What's their relationship with the current operator? Would they stay if the ownership changed? Definitely get those answers before you close. 1 year of rent roll data? Not enough. In boat and RV with a clear seasonal cycle, you need at least 2 full years to distinguish a pattern from an anomaly. With 1 year, you can't tell whether the fall rush is growing, flat, or softening. 1 strong October doesn't tell you the market is healthy. 2 consecutive strong Octobers, that might tell you something's real. With 1 year, a bad summer looks like a problem. With 2 years, you can see whether that soft summer was a one-time event, a competitor opening nearby, or unusual weather pattern, or the beginning of a trend. 2 years also lets you assess rate history. If rents haven't moved in 2 years, you can see that clearly. If the operator raised rates in the fall and lost 5 tenants in the spring, You'll see that pattern. 1 year hides it. And 2 years often captures the period before and after significant market events. A new competitor opening, a highway access change, an HOA ban being implemented. Those events show up in the occupancy data if you have enough, a long enough history. So build the 24-month minimum into your LOI as a due diligence contingency. If the seller can't provide full 2 years monthly data, ask why. We cover the exact LOI language on day 24 of the Boat and RV 100 series. Here's how to build a proper financial model from a boat and RV rent roll. 5 steps. 1, map the 24 months of monthly occupancy data to the seasonal cycle. Identify the fall peak, winter hold, spring softening, and summer trough for each of the 2 years. Look for the pattern. Is it consistent year over year or shifting? 2, calculate average revenue per occupied space per month. This tells you whether the operator is applying seasonal pricing, higher rates in fall, retention pricing in spring, or running flat rates year-round. The difference between these 2 approaches can be meaningful if you're value-add— meaningful in your value-add thesis. 3, build your pro forma as a 12-month model, not an annual average. Give each month its own occupancy assumption based on the trailing 24-month average for that calendar month. September gets the September average. July gets the July average. This is how you model a seasonal asset correctly. 4, layer your rate assumptions on top of that monthly occupancy model. If you plan to implement a fall rate increase, apply it in September through November. If you plan retention pricing in spring, apply it in March through May. Your stabilized NOI estimates come from this model, not the annual average. And then 5, run a downside case. What if fall occupancy comes in 10% below your assumptions? Maybe a competitor opened or the market was softer than expected. Does the deal still work? What's your breakeven occupancy? Know these numbers before you make an offer. And here's the frame to carry into every boat and RV deal evaluation. Seasonal occupancy is not necessarily a problem. In fact, it's the asset. A boat and RV facility where occupancy dips in summer is telling you that its tenants are actively using their vehicles, which means they're the right tenants. A facility with flat year-round occupancy, maybe storing vehicles that never move, that's a different tenant profile and a different retention story. Use monthly data, Not annual averages. Annual averages can hide the cycle. The cycle is the thing you need to understand. And definitely get 24 months minimum. I'd argue for 36, but minimum 24. Year-over-year comparison tells you whether the pattern is stable, improving, or softening. One year doesn't give you that. Read the context. 70% occupancy in July is normal and healthy. 70% occupancy in October is a problem worth investigating or an opportunity. That same number means completely different things in different months. The investor understands this, sees value where self-storage investors see risk. That's a real competitive advantage in this vertical. All right, up next, day 18, we're going to dive into space count economics. That sounds fancy. Space count economics— why fewer spaces means Each vacancy costs more. Please like and subscribe if you wouldn't mind to this channel by clicking the bell. I recently learned— stupid me, I'm not a boomer, but I recently learned you got to click the bell. So subscribe, ring my bell, please. That way, all you have to do after you watch them is share them, because that's advertising to your network that you're putting in the work to become a storage mogul. And the best part, it's free, and I did all the hard work for you. And remember, the seasonal pattern on a boat and RV rent roll is a feature, not a bug. The investors who understand it see opportunity where everyone else might see risk. Build that 24-month model. Read the context. For the full deal evaluation framework and deal analyzer, if you're one of the first 500 to join Storage Moguls Community, join for free. At storage moguls.ai, storage moguls.ai. You can start for free, level up at your own pace. And again, if you register soon, you're going to get that free deal analyzer GPT we built and use ourselves. Remember folks, if learning how to read a boat and RV rent roll is what brought you here today, wonderful. But wait until you learn how to see, understand, and evaluate all the other storage verticals that make this storage asset class so exciting. All right, again, join us at Storage Moguls. We will transform you from someone interested in boat and RV storage to a storage mogul your friends will start talking about. Tomorrow we're going to look at the math behind having fewer spaces and why each vacancy in this vertical costs proportionally more than it does in self-storage. That's important to know. See you tomorrow.