The RV Storage Side Hustle

• The RV Industry has Tripled in Size since 2009 (RVIA)
• Over 11% of households own an RV (RVIA)
• Millennials alone, own over 15 million RVs (RVIA)

On December 14, 2021, Business Insider reported that RV maker Thor Industries now has an $18.07 billion order backlog according to the company’s 2022 first-quarter?earnings report.?According to Business Insider, Thor Industries — which owns 14 brands including?Jayco?and?Airstream?— first saw rising sales in May and June of 2020 – during the COVID pandemic. Since then, interest has yet to taper off. Thor achieved $3.96 billion in net sales in the first quarter of 2022, a 56% increase compared to the same time last year.?

The Big Quit, combined with the pandemic, and significantly buoyed by the broader acceptance of remote working environments is rapidly shifting the landscape. ?When the pandemic magnified our concerns over travel, the RV emerged as a great alternative when it comes to controlling your own personal environment, while taking the family on a much-needed vacation.

So, why are we talking about RV storage??Well, the simple reason is that most homeowner associations (HOAs) don’t allow RVs to be parked within their communities.?With interest soaring, RV storage areas are starting to show up everywhere, and the price points in our local area in the Phoenix suburbs are ranging from $45/month per parking slot on raw desert land to nearly $700/month for an enclosed storage area.?A typical 12’ x 25’ uncovered storage lot runs around $100/month on average.?Covered, the price is around $150/month.?We’ll work with these numbers to show a rough idea of the cost and opportunity.

How Many Vehicles Can Be Stored Per Acre of Land?

According to most industry experts, a good rule of thumb is about 40 vehicles per acre of land.?This allows enough room for back-in slots, a variety of pull-through slots which accommodate RVs towed behind vehicles - along with access roads.?Probably 10 acres is the smallest size property to consider for efficiency, with 20 acres+ being a more effective size to run with staffing and security.

What’s the Cost of Developing?

This is going to vary widely, depending on improved or non-improved land, and amenities offered, such as pre-trip staging areas, dumping stations, covered and enclosed units, and RV wash areas.?According to an RV storage and resort developer, www.JTNorthroup.com, you should expect mid-range land improvements, security entries, walls, offices, and chip-seal paving – and a mixture of uncovered, covered, and enclosed storage - to run at about $46,600 an acre.?Of course, it will be much less if you eliminate the enclosed storage areas and the covered areas, but that will change your income opportunity as well. You can also adjust the ratios of uncovered to covered and enclosed spaces to change the cost per acre.

So, on a 10-acre site, you’re looking at raw land development costs of $466,000. ?On a 20-acre site, that will run $932,000.?And the price of the land will be on top of this amount.?The closer to town you go, the more expensive the land.?For purposes of this “side hustle” idea, assume that you should spend no more than $20,000/acre.?That takes your total development costs up by another $200,000 to $400,000 for a 10-acre site or 20-acre site respectively.?

To summarize, this is about what an expensive home is going to cost – somewhere between $666,000 to $1,332,000.

What's the Income Opportunity?

This is where the numbers become interesting. ?Using a blend of the uncovered and covered starting rates to keep things conservative, we’ll use the $125/slot average shown above.?And remembering our 40 RVs per acre metric, that produces this table:

Depending on loan amounts and interest rates, you can see that this has some enormous potential once investment monies are recovered.?And this is before other services are added, like RV washes, LP gas, batteries, RV supplies, water & ice dispensers, etc.

What are the Operating Costs?

Let’s assume that it will take you 3 people per day shift to operate the property and that you’ll require a 3-shift operation for security and coverage.?In the later hours, you can reduce coverage to 2 people. ?That is 7 people per day.??Let’s pay them a wage of $15/hour.?That is $360/day for the first shift and $480 for the two remaining shifts.?That’s $840/day or $302,400/year.?On top of that, let’s add $100,000 for utilities per year.?That takes our costs up to $402,400/year on a conservative basis.?And it’s assuming you’ll take a more active role in the start-up phase to ensure it runs smoothly.

How Does That Show Up for Profits?

What’s most interesting about this is that the operating costs don’t really fluctuate when you increase the size of the lot.

Conclusions

Overall, the opportunity for continued and substantial cash flow is definitely there.?Can you save money on the development costs??Yes.?You can use chip-seal instead of asphalt for roadways and covered parking, or even use just leveled dirt in some areas of the country.?You can use chain link fencing with razor wire instead of concrete walls.?Can you save on land costs??Yes and no.?Yes, if you are moving to a more rural location, you’ll be surprised how much bargaining you can do on land.?Most times, the landowner will agree to carry the entire note, with as little as 10% down.?You can work with a developer who will sometimes share the investment costs with you as a partner, or finance some or all the development costs for you.?

Can you improve your income??The answer is probably 'significantly' if you’re closer to the city and highly visible.?Both of these factors – closer to the city and higher visibility - can be good trade-offs when it comes to advertising spending.?But you’ll be surprised how quickly the word gets out even when you’re in a rural location.?

The downside is filling up your lot.?However, you can presell the lots as you begin to build out the property.?That will probably account for between 25-50% of your sales on opening day.?But you’ll need to figure, on average, it will take a year to fill it up.?RV sellers will be happy to let customers know about you, so use them to leverage your start.?Also, leverage your current customers by giving them a free month for every customer they refer to you that rents a lot.?

Is this “side hustle” right for you??That’s up to you and your personal situation.?For sure, I’ve deviated from my previous examples that required little to no upfront monetary investment.?But I think it’s important to see a range of side hustles that might give you even more options than just simple ones that require little or no resources to start.

Maybe this becomes more feasible if you can take on a few partners to help share the upfront investment or work with a developer who will partner with you on the development.?It’s hard to make that call for you.?But is this an idea worth putting in front of you? I certainly think it is.?

This demand is only getting stronger.?Of all the newest RV owners, millennials show the highest intent to buy at 31%, followed closely by Gen X at 26%, and Gen Z at 21% according to the RV Industry Association (RVIA).?

Maybe this storage opportunity, as well as the construction of RV parks and resorts will be one of those emerging industries that permanently change the landscape, as remote work and online schooling become more prevalent.?Wouldn’t it be nice to be on the front end of it??It could change your life in the process.?

And did I mention that there are no franchises out there for this yet? ?Wouldn’t it be great if you were the one to develop the cookie-cutter approach??Reach out to developers and find one that will work with you on budgets and financing, and you may find that this new trend is right for you.

? Joe DiDonato and Side Hustles Newsletter