I happened upon a pice of property, 2.5ish acres, that is fairly priced and in a hard to find area that is zoned correctly. It would be ideal for a self storage lot for RVs, trailers, cars, boats, whatever. My idea is to gravel it, fence it, put in basic security cameras and a coded electronic gate and start renting spaces out. My area has a high demand for it and I figure I can get about 200 parking spaces inside the fenced area. Average rates in my area are $80-100 per month depending on size with very limited availability.  Long story short, I think I could fill it to 80% capacity fairly quick.

What I'm not sure of though are the day to day operating costs that will be incurred. I have no idea what kind of insurance would be needed and what the costs would be for that. I would run the business myself while still holding a full time job with the idea that not much will actually need to be done to the property each month. Am I crazy for thinking about doing this or is it a great way to earn some extra income?

Biggest operating cost is likely to be labor. You need someone there or nearby to sell and babysit.

-shooter

LLC the property and/or the entity.
Get stout insurance of the business
Tax ID of the business to open checking account
You might should obtain umbrella insurance for your personal items as well.

The initial setup of the facility and then filling it is going to take quite a bit of energy/time. Probably the first year it would be a near full time job to make it succeed.

Once it's up and running, after year 1, it'll be killer.

I've got two different groups of guys who are investors in similar storage facilities.

Can I PM you to talk on the phone?

Sure but I'm on a burner of a schedule until Sunday.
Flying from Miami to Las Vegas for a 9am meeting, right now. Then flying back at 3pm local tomorrow.

Saturday going to an electric car event all day.

Post up more questions here if you'd like as there is quite a bit of depth on here for all facets. And/or we'll link up Sunday to see if I can help you at all.

OP...re-think the 80 spaces with motorhomes and large fifth wheel trailers Not going to happen. Maybe fifty is a more realistic estimate. Cars Only? Sure you can do 80.

The problem with these type deals his you "miss" something, spend your money and THEN discover the defect you missed and are stuck with it.

I'm not sure what you mean here numbers wise? The lot is 2.5 acres and at 300 sq ft per storage space (10x30) that would mean there would be room for 363 units theoretically. Now include setbacks and travel lanes and I think 200 spaces would be realistic. At 80% occupancy that means 160 of them would be taken and $80 per space that's nearly $13k worth of revenue monthly and that pencils with less than $5k/ mo in carrying costs.

Thanks, I'm doing some more research next couple of days and I'm sure I'll come up with some good questions.

10x30 isn't big enough. A small RV is 8x24. Most the class C motorhomes are bigger 8x32 and the class A motorhomes build on a charter bus frame are 9x44. That's before the trailer or car carrier most also have with it. You are also looking at a minimum of 20' travel lanes just to allow backing into the spots, 26' would be better as I do it professionally most these folks won't.

Bump because this is pertinent to my interests.

OP, any updates?

We own one if you are still interested in information. IM me if so.

Can you go ahead and share some of your thoughts with the forum?

This is something I have also considered

@Ranger6940

I'm also considering this as a business opportunity.  Do you mind sharing experiences, pitfalls, realistic income expectations, etc.?

Info, I all ears

We have 3 acres on a commercial lot with about 2.5 acres of openness. Have thought about this. We're realistically looking at 120 RV spaces and that's pretty tight for people not banging into other peoples stuff when backing up. Probably a few more smaller spaces for boats, but not by much.
Wish we had those rent prices around here. Open space is plentiful and lots of unused large lots, and lots of people who would just store stuff at a family members farm.
We're in a pretty good spot right off the highway. Would have to fence it in and gravel the entire thing which would probably cost another 60k. It might be worth it for 60/month, but when people are only paying $200 a year for the spot in better locations next to several campgrounds, it's not even worth dealing with people and lot maintenance. Let alone dealing with crap abandoned and rent due. So even if our lot was ready to go, wouldn't do it (with our typical rent prices).
I imagine most storage places were started because they had the land, and needed something to use it for. Not necessarily a working model for those who need to purchase the land and do lot work, build fence and make it work.
Crunch those numbers and see if it works for you. I'd only do it if you see potential to be bought out later if a city seems to be growing in that direction. I'm guessing 1000/month profit for "passive" income that could be a big fat stinking headache.

For the insurance side, you just need a BOP to cover the property and liability.  The cost would depend on the amount of property, but the pacific northwest is generally pretty reasonable.  It certainly wouldn't be a deal breaker.

Sorry for not responding. I have been non-stop travelling.

On the surface self storage appears simple. Using a pilots analogy: Good Approach Good Landing Bad Approach Bad Landing.

The biggest issues are collecting money, gate codes administration, unit seizure for non-payment, power gate maintenance, maintaining overall security.

Money can be made but would advise against believing that big money will be made. At least at first due to initial capital investment.

I can share with you our situation if it would help.

Convenience is key, for both you and your customer.

Take a look at Sitelink or Easy Storage Solutions as a software partner. Software is going to make or break that convenience factor. Be prepared to spend a couple thousand on a gate system and $40-$60 a month on software / merchant solutions.

My facility is setup with an electronic keypad gate for entry and exit. Customers can rent a unit 24 hours a day by pulling to the gate, hopping on the website and completing their digital lease agreement (hire a lawyer) and entering payment information.

There's no paper lease agreements or cash exchanging hands. No credit card or ACH account, you don't lease. Everything's auto pay only.

All the empty units are locked with a word lock disc lock. This allows for security of empty units, as well as allows the computer to email the customer both their gate and unit key code. That way I've got access to the unit in the event of fire / flood / emergency, and I'm not meeting up with someone just to hand them a set of keys for their unit.

The reason for an exit keypad and not an automatic gate with a sensor is twofold. It prevents people tailgating someone else in, less they're trapped in there, and secondly if a code "signs in" but doesn't "sign out" within a specified period of time, I'm alerted on my phone which prompts me to check cameras and identify why someone's spending so much time in there (sleeping, running a business, maintaining vehicles, etc).

Our exterior RV spaces are 10x50 with 30' travel lanes. Remember these aren't professional drivers you're dealing with here, more room is better. Your climate may dictate different, but in Tennessee with the extreme summer sun majority of our customers are looking for covered parking (think lean too / carport) which account for 80% of our outside spaces. Many of our customers elect for 30 Amp hookups similar to what you'd see in a campground. These are individually metered and power cost is marked up by a few points.

I've got 15K square feet of inside storage and we're adding an additional 10K by the end of Q2. I've owned the place since July of 16' and purchased it as an established 5K square foot facility in neglect. It's considerable hands on work in the beginning, but once you reach the autopilot stage it has it's benefits.

Feel free to PM me with questions.

@Ranger6940

Email sent.

Since some of this is titled property that may or may not have a title lien against it doesn't that complicate matters?

Seizing  an financed RV or boat is going to be a bit more of a challenge vs a bunch of personal property in a storage unit?  Or do you have it towed and partner with a tow company/impound lot?

I have a new storage facility in west Texas. Some great info in here, thank y'all for posting!