Investing in Self-Storage or Boat and RV Storage: Is It Worth It?

If you’re considering investing in the self-storage or boat and RV storage industry, you probably have a lot of questions (and maybe more than one concern). That’s normal! You’ve come to the right place.

We’re going to be touching on a few key questions:

  • Is self-storage a good investment?

  • How do self-storage businesses make money?

  • Is self-storage a passive income?

  • Are self-storage spaces profitable?

Is self-storage a good investment?

The short answer: Yes!

Self-storage and boat and RV storage continue to be a solid investment choices. The need for self-storage is only growing in intensity, and surveys show that trend is set to continue in the coming years. There is a high chance of revenue potential attached to self-storage, and with a commonly month-to-month rental cadence it makes for an excellent investment decision.

Self-storage facilities are being developed across America with increasing numbers and still reaching ideal occupancy percentages more often than not. Although, this good fortune does somewhat depend on how thorough the developers of the facility are about their due diligence.

If developers and contractors take the time to commission or conduct a detailed self-storage feasibility study or boat and RV storage feasibility study (and they got the green light) their facility should be in good shape for the foreseeable future.

How do self-storage businesses make money?

Besides the obvious factor of tenant rent, there are several ways self-storage facilities can make money. For example, by offering certain items and requiring certain fees. Such as:

  • Security deposits

  • Tenant insurance fees

  • Administrative fees

  • Cardboard boxes

  • Locks for units

  • Packing tape

  • Adding boat and RV storage

These add up fast in the world of dollar signs and bottom lines. People will pay for what will make their life easier, and you can provide that. Customers pay for convenience. You can turn that fact into revenue.

Is self-storage a passive income?

Self-storage is considered passive income. This means there’s the opportunity to practice cost segregation for your facility—however, this may not make the most sense for you depending on your unique situation. Cost segregation defers taxes that will eventually need to be paid.

Are self-storage spaces profitable?

Yes, self-storage spaces are profitable. Profits for self-storage facilities land far above other types of small businesses. One source estimate state 11% as a typical profit margin. Another has it at 41%. This, of course, does depend on location and market characteristics. A self-storage feasibility study or boat and RV storage feasibility study helps determine the projected revenue of a given possible facility site.

With those margins, it’s easy to see why so many people are jumping into the self-storage and boat and RV storage space!

Katherine D'Agostino