Day 56: Adding Covered Storage The ROI Math Every Boat & RV Owner Needs to Run

All right, folks. Welcome back to day 56 of the Boat and RV 100. I am Joe Downs with the Storage Moguls, and today we are running the math on covered storage—one capital decision that can add 40 to 60 percent to your revenue per space. The people in this community are doing stuff like this right now—not planning to, doing it—and I'm talking couples, you know, husband and wives, entrepreneurs, solopreneurs—all actively working through deals like this between 400. $1,000 and $2 million. Why that range? Because it's financeable, it's digestible, it's real. And that's the room. And if you want to be in it with folks doing that, I'm like, if that's what you want to do, you should be joining storagemobils.ai and become like all the other folks in our community that are finding deals. You can start for free and then you can level up at your own pace. We've got the full pathway for you from, I think this is a good idea, to owning and operating your first facility. But back to today, because most operators have not run this math yet. So let's fix that. Here's the fundamental dynamic: boat and RV tenants will pay significantly more to store their vehicle undercover—not marginally more, talking 40 to 60 percent more—and that's typical in most markets. A facility charging 150 per month for open air spaces can now typically charge 210 to 240 for. Covered space of the same size. And the reasons are obvious once you think about it. From the tenant's perspective, you got UV degradation on a gel coat finish or on an RV roof, and that's real and that's expensive. And you also have rain, hail, and debris accumulation, and they damage high-value vehicles over time. So a boat owner just paid $80,000, $100,000, $150,000 for a vessel, is going to spend another $60,000 or more a month to keep it under cover. And the math is not that complicated for them. So what this means for you as an operator, if you have an open-air land, or if you have land with open air that can support covered structures, you have a value creation opportunity sitting on your property if the demand's there. Question is not whether covered storage commands a premium. We already know it does consistently and predictably. The question is whether your site, your zoning, and your capital support the addition. And we can We can answer that today. So let me walk you through the cost side before we build the playback model, starting with single slope metal carport structures. What is the most common— what, which is the most common covered storage format for boat and RV facilities? They run $8,000 to $15,000 per space installed. And I know the range is wide, but it's because it's driven by 3 factors: the size of the space, The region you're in and the contractor, right? So a 14 by 50-foot-wide deep single-slope carport in the Southeast will be on the lower end of that range. But for the same structure in the Northeast or Pacific Northwest, it's gonna tend towards the higher end of the range. The key design spec here is minimum 14-foot clearance height for most Class A RVs. Now, if you want to serve the full Class A market, including coach-style motorhomes and larger fifth wheels, you're going to want to plan for a 16-foot clearance. This is not a place to cut corners. A covered structure that can accommodate a 14-foot-tall RV is serving a narrower tenant mix than you planned, and your premium rate will suffer accordingly. Good news, metal carport structures are modular, so you can add rows incrementally as demand proves out, which is exactly the sequencing we recommend for most operators. Here's the simple payback model. Structure, you've got your structure costs, $12,000 per space, let's say. Monthly rep premium for covered versus open air is $150 per month, right? Annual premium revenue then is $1,800 per space. Simple payback on the premium alone, $12,000 divided by $1,800 is 6.7 years. That's not fast. I get that. And it's not, that doesn't sound too sexy, but that's not the right way to look at it either. You're not just capturing the premium, you're capturing the full rent. So if your open-air rate is at $180 and your covered rate is $240, the total annual revenue from that covered space is $2,880. So simple payback on the full rent, $12,000 divided by $2,880 is 4.2 years. On a facility you're holding for 10 to 20 years, a 4-year payback on incremental capital is a strong return. And that calculation doesn't account for the NOI multiplier. So if your facility trades at a 7 cap, every $2,880 of annual revenue is a gross amount you add as a gross $41,000 in asset value at disposition. So a $12,000 structure that adds $41,000 in gross value is a 3.4x return on capital before you account for the income during the whole period. It pencils. The phase 2 path. The way most operators actually do this, though, if you acquired an open-air boat and an RV facility, you almost certainly didn't have the capital at acquisition to immediately build covered structures across the entire site. If you did, great. If you didn't, that's fine too. The most common and most sensible approach is to add covered storage in phases funded by the facility's operating cash flow. So here's, that's, here's one way this sequencing can work here. So year 1, stabilize operations, build occupancy, confirm your market's demand for covered storage. The signal you're looking for is a waiting list for covered spaces. So tenants calling to ask if you have covered availability. If you don't have covered spaces yet and tenants are asking, you have confirmed demand. Year 2, go ahead and design and permit The first row of covered structures. Select the section of your site closest to the entrance maybe, or with the best access characteristics. Start with 10 to 15 spaces. Price them at the market premium and lease them up. Year 3 and beyond, use the cash flow from the covered, the covered row spaces to fund the next phase. Repeat until your land is optimized or demand is saturated. The key advantage of this approach, you never build ahead of confirmed demand. That's right. Every phase is funded by the previous phase. The capital risk is distributed over time rather than concentrated at acquisition. Before you run the numbers though, you need to check 3 things off your list. So for zoning, can you— can your parcel support permanent structures under current zoning? Some agricultural or special use outdoor zoning permits, uh, or permit open-air storage but restrict permanent structures. So check that before you design. The municipal conversation takes 30 minutes here and can save you a significant cost. For setbacks and height restrictions, most municipalities have setback requirements for permanent structures. So how to, you know, how close to a property line, for instance, or road can you build? Height restrictions can also affect how tall your carport can be. Know these numbers before you design. Because they determine how many spaces you can add and where. Now, regarding the permitting timeline, adding covered structures typically requires a building permit. So in some markets, that's a 30-day process. In others, it's 90 days or longer. Factor the permitting timeline into your phase 2 so you're not holding cash while you're waiting for approvals. None of these checks are deal killers, though. They're planning inputs. The operators should get surprised by zoning or permitting. on a covered storage addition are the ones who started designing before they made the phone call to the municipality. All right, let me give you the design framework in a format you can use right now though. First, do you have documented demand for your covered storage? Are tenants asking for it? Is your open-air facility full while a competitor with covered spaces has a waiting list? If yes, you have a demand signal. Second, do Does your site have the land to add at least one row of covered structures with 50-foot drive aisle clearance maintained on both sides? Sketch it out. If the geometry doesn't work, discussion's over. And third, does your zoning allow permanent structures and what are the permit requirements? And fourth, run the payback model at the high end of your construction cost estimate, $15,000 per space, and the low end of your rent premium estimate. $120 per month. If the payback works at that conservative case, then it works. If it only pencils at the optimistic case, maybe revisit the demand signal. The covered storage decision is one of the most defensible capital allocations in boat and RV storage when the demand is confirmed and the site supports it. Here's the frame: covered storage is not a luxury upgrade, it's a demand-driven capital decision With a predictable premium, a calculable payback, and a meaningful NOI multiplier. But you got to run the math before you decide. The math almost always works, but you got to run it. All right. If the covered storage math gave you something to model, like this video, that's exactly what it's designed to do. Subscribe for day 57, ancillary revenue from amenities like air rinse stations, vacuums, propane. One of the most overlooked income streams in this vertical. We're covering exactly how to turn them into consistent cash flow. And then share this with boat and RV operators sitting on an open-air land who's never run the payback model or don't offer to buy it. The numbers are usually better than they expect. StorageMoguls.ai for covered storage ROI calculator. It's there. Sequencing framework. Operators have already done this addition and more are there. It's free to join. So join Storage Moguls, run the math, build what the demand supports. See you tomorrow.