Boat, RV, Snow Mobile Storage

MommyLiberty5013 · March 2016

DH and I are looking to buy a more rural property with some acres. We only have .33 now and want several.

Many of these properties have extra outbuildings besides detached garages. Aside from storage of our own stuff, we were thinking we could rent out portions of any larger building we had to people here in MN wanting to store their boats, wave runners, or smaller RVs in the winter months (or snow mobiles in the summer months). Many people have water craft here since we have 11,000+ lakes in the state and three main rivers in the Metro area. Lots of homes have 3 car garages for boat storage. But other people store their boats in other locations. Snow mobiles and RVs are popular in MN too.

So do you store your boat or know someone who does? How much do you pay per season or per month?

If we did this, the storage would be totally covered and out of wind or elements. And, it would be locked. Although it would not be heated. Obviously, we would do our own research into local rental places to see what a common charge was and we would likely charge a bit less than that.

julieanne912 · March 2016

We used to store our camper before we moved into our current house. We paid $40/month, for an uncovered spot, at a facility that was specifically for vehicle storage.... ie mostly campers/RVs and some boats. The caretaker lived on site, and the storage was secure with gates and personalized pins to give us access (so they could keep track of who was coming in and out). From what I can recall from my research, covered/indoor storage would run $75-90/month for covered and over $100/month for completely inside.

Some negatives to renting out space in your own outbuilding are:

1) You'll have to give access to the people who are coming to get their boat/camper etc., pretty much 24 hours a day, since that's what they could get at a storage facility. I wouldn't want people showing up on my property at all hours.

2) What happens if their vehicle/boat is damaged while it's in your building? Will your homeowners insurance cover it? Will their insurance company come after you if they think it's your fault that it was damaged?

3) How will your own things that you are storing be secure? Are you going to want to be present every time they pick up or drop off their vehicle?

brij2006 · March 2016

My parents rent out part of their shed for winter storage. They charge $300/season, which is Oct-April. We live in a LCOL rural area though. It is not heated and is one large area that all of the items are stored in (they have 6 renters). It is each persons' responsibility to set their item up to prevent mice from making nests or other animals/rodents to get in. They have 1 person who leaves the cover off their boat because it doesn't allow a warm place for animals to go.

It's a really good idea though and you would definitely find people who will utilize this option. We're outdoors people and love our seasonal toys, so having that option where someone vacations or spends a ton of time, makes it easier than needing to transport back and forth.

short+sassy · March 2016

Insurance is a good point. I would bet dollars to doughnuts your homeowner's insurance would not cover another person's property, especially since it is being stored as part of a business enterprise.

To be safe, you'd want to have an insurance policy in place for the items being stored on your property (not each item, a general insurance policy). I think this type of insurance would be fairly cheap, but it is still something to look into and consider in your pricing model.

MommyLiberty5013 · March 2016

julieanne912 said:

We used to store our camper before we moved into our current house. We paid $40/month, for an uncovered spot, at a facility that was specifically for vehicle storage.... ie mostly campers/RVs and some boats. The caretaker lived on site, and the storage was secure with gates and personalized pins to give us access (so they could keep track of who was coming in and out). From what I can recall from my research, covered/indoor storage would run $75-90/month for covered and over $100/month for completely inside.

Some negatives to renting out space in your own outbuilding are:

1) You'll have to give access to the people who are coming to get their boat/camper etc., pretty much 24 hours a day, since that's what they could get at a storage facility. I wouldn't want people showing up on my property at all hours.

2) What happens if their vehicle/boat is damaged while it's in your building? Will your homeowners insurance cover it? Will their insurance company come after you if they think it's your fault that it was damaged?

3) How will your own things that you are storing be secure? Are you going to want to be present every time they pick up or drop off their vehicle?

All good points/questions:

1. I think it depends on how the rental agreements are set up. My grandpa, for example, in Upstate New York stores 3 boats at a local farm nearby the lake where he owns property. He calls ahead to let them know when he would like to come over. It's just a family and they store boats in their barn. If that arrangement didn't work for someone, then they could certainly look elsewhere. But since we didn't and wouldn't offer 24/7 access, we would reflect that in our rental prices.

2. I agree that the insurance liability is the biggest question. Obviously, it begs more research. How much would it cost us to pay for the insurance we needed. And, would that offset the cost of the rental fees? If not, then we don't do it. If we break even, we don't do it. If we make a profit, then maybe we do it. And, it begs how we write up the rental agreements, for example, how/what people can keep on their boats and what they cannot (fire arms, ammo, fireworks, food [attracts pests], etc.).

3. If it worked out, we would store our things in a separate place. And, yes we would need to be present. If they didn't like that, then there are other rental places to use. I'm not talking about a huge number of boats, maybe tops a handful. For example, some of our existing neighbors own boats and store them off property. We could ask them if they wanted to store with us.

Thanks for your questions. It's making me think more on this.

MommyLiberty5013 · March 2016

short+sassy said:

Insurance is a good point. I would bet dollars to doughnuts your homeowner's insurance would not cover another person's property, especially since it is being stored as part of a business enterprise.
To be safe, you'd want to have an insurance policy in place for the items being stored on your property (not each item, a general insurance policy). I think this type of insurance would be fairly cheap, but it is still something to look into and consider in your pricing model.

Yes, I agree. Insurance would be my biggest question area. That and writing up the agreements to specifically spell out who is responsible (or not responsible) for various things.

MommyLiberty5013 · March 2016

brij2006 said:

My parents rent out part of their shed for winter storage. They charge $300/season, which is Oct-April. We live in a LCOL rural area though. It is not heated and is one large area that all of the items are stored in (they have 6 renters). It is each persons' responsibility to set their item up to prevent mice from making nests or other animals/rodents to get in. They have 1 person who leaves the cover off their boat because it doesn't allow a warm place for animals to go.

It's a really good idea though and you would definitely find people who will utilize this option. We're outdoors people and love our seasonal toys, so having that option where someone vacations or spends a ton of time, makes it easier than needing to transport back and forth.

Do you think your parents would be willing to share a copy of their rental agreement with their names and personal data cut out of it? I am curious about the language of it and how they write it being they are a local, private rental "facility" and not a national or local chain.

brij2006 · March 2016

MommyLiberty5013 said:

brij2006 said:

My parents rent out part of their shed for winter storage. They charge $300/season, which is Oct-April. We live in a LCOL rural area though. It is not heated and is one large area that all of the items are stored in (they have 6 renters). It is each persons' responsibility to set their item up to prevent mice from making nests or other animals/rodents to get in. They have 1 person who leaves the cover off their boat because it doesn't allow a warm place for animals to go.

It's a really good idea though and you would definitely find people who will utilize this option. We're outdoors people and love our seasonal toys, so having that option where someone vacations or spends a ton of time, makes it easier than needing to transport back and forth.

Do you think your parents would be willing to share a copy of their rental agreement with their names and personal data cut out of it? I am curious about the language of it and how they write it being they are a local, private rental "facility" and not a national or local chain.

I know their agreement is very short and brief. So it may not cover all of the legal things needed, but they only rent it out to people they know.

A couple of key points I know we made sure they had in there was of how it was the tenants responsibility to prevent against pests, provide their own coverage for their property stored there, and they could not sue in the event of liability. They also write in that the items can not leave floor spill (oil, antifreeze, etc). If it does, it is the tenants responsibility to bring the floor back to its original state.

As far as insurance, people's property coverage they have on those items will cover it when it's in storage. We store 2 of our vehicles there during the winter months, and our comprehensive covers them while they're in storage. It is not my parents' responsibility to provide that coverage. Their homeowners insurance also covers the liability for someone coming onto their property. The same as it would with any other time someone came onto your property. However, we checked with their insurance and they can do this up to $4,000 in gross receipts annually and then they would need to get a separate general liability policy.

Oh, and they also offer electricity for an additional $50/season. This is used for vehicles that may need a battery tender attached to them throughout the season, but they only have 1 tenant that utilizes that option.

Erikan73 · March 2016

short+sassy said:

Insurance is a good point. I would bet dollars to doughnuts your homeowner's insurance would not cover another person's property, especially since it is being stored as part of a business enterprise.
To be safe, you'd want to have an insurance policy in place for the items being stored on your property (not each item, a general insurance policy). I think this type of insurance would be fairly cheap, but it is still something to look into and consider in your pricing model.

Short & Sassy is correct, your home owners insurance will not cover any damage done to the vehicles you are being paid to store. You need to talk to your insurance agent about getting additional coverage. I'm not sure if a General Liability will cover it or if there is something else you need. Basically you will need some type of commercial/business insurance to properly cover yourself. Because if any of the renters get injured on your property while they are dropping off or picking up their unit, they could file a claim against you. Even a simple trip can land an insurance claim against you depending on what type of person you are renting to or how aggressive their medical insurance provider. You want to make sure you have the proper insurance so that they don't try to sue you & you risk losing your home.

Erikan73 · March 2016

Also realize that if you are turning this into a business you will need to claim the income from the rental. I would also recommend talking to a tax accountant to see if first can you deduct the expense of the insurance from your taxes. And second, would it be better to form a limited liability corp for tax purposes for the rentals you are doing. Another advantage of forming an LLC for the rental aspect is that if something happens & someone tries to sue you for something, they are suing the LLC and the assets of the LLC and not the personal assets of you and your husband. Sorry but in this day of sue happy people you have to look at all angels to protect yourself. And third, if you do claim the income on your personal taxes, how much can you get before you get bumped into the next tax bracket & have to pay more taxes, making it that after taxes & insurance, you really aren't making any extra money.

abrewer5 · March 2016

We pay $1200 a year for our boat for indoor storage, but we have keys to the building and 24/7 access. H goes down pretty much every night in the summer to tinker and the owner has no problem. I'm honestly not sure the type of insurance the property has but it's a boat yard/business so I'm sure insurance would cover damages if something were to happen to the property.

It stinks because up until last year it was his uncle's business and we got a family discount and only paid $600 per year in exchange for H cutting the grass, helping with the other boats, and other things around the property, but the property his uncle leased was sold and now we rent from the new owner.

ETA: we also have electricity access.

smerka · March 2016

Erikan73 said:

Also realize that if you are turning this into a business you will need to claim the income from the rental. I would also recommend talking to a tax accountant to see if first can you deduct the expense of the insurance from your taxes. And second, would it be better to form a limited liability corp for tax purposes for the rentals you are doing. Another advantage of forming an LLC for the rental aspect is that if something happens & someone tries to sue you for something, they are suing the LLC and the assets of the LLC and not the personal assets of you and your husband. Sorry but in this day of sue happy people you have to look at all angels to protect yourself. And third, if you do claim the income on your personal taxes, how much can you get before you get bumped into the next tax bracket & have to pay more taxes, making it that after taxes & insurance, you really aren't making any extra money.

And if you claim the income on a Schedule E, you will also have to pay Self Employment tax which is both the employer and employee side of SS and Medicare tax or 15.3%

brij2006 · March 2016

abrewer5 said:

We pay $1200 a year for our boat for indoor storage, but we have keys to the building and 24/7 access. H goes down pretty much every night in the summer to tinker and the owner has no problem. I'm honestly not sure the type of insurance the property has but it's a boat yard/business so I'm sure insurance would cover damages if something were to happen to the property.
It stinks because up until last year it was his uncle's business and we got a family discount and only paid $600 per year in exchange for H cutting the grass, helping with the other boats, and other things around the property, but the property his uncle leased was sold and now we rent from the new owner.

ETA: we also have electricity access.

It's in your best interest to check into this. 90% of these work the same as a tenant renting a house. The landlord is responsible for insuring the building itself, but the tenant is responsible for insuring their belongings.

short+sassy · March 2016

brij2006 said:

abrewer5 said:

We pay $1200 a year for our boat for indoor storage, but we have keys to the building and 24/7 access. H goes down pretty much every night in the summer to tinker and the owner has no problem. I'm honestly not sure the type of insurance the property has but it's a boat yard/business so I'm sure insurance would cover damages if something were to happen to the property.
It stinks because up until last year it was his uncle's business and we got a family discount and only paid $600 per year in exchange for H cutting the grass, helping with the other boats, and other things around the property, but the property his uncle leased was sold and now we rent from the new owner.

ETA: we also have electricity access.

It's in your best interest to check into this. 90% of these work the same as a tenant renting a house. The landlord is responsible for insuring the building itself, but the tenant is responsible for insuring their belongings.

SITB

True, but with that said, I could see a person (or their insurance company) renting an outbuilding going after the owner of the building if it could be argued the "bad" was due to the owner's negligence. Like if a big tree falls on the building and damages the boat/RV or an electrical fire.

julieanne912 · March 2016

short+sassy said:

brij2006 said:

abrewer5 said:

We pay $1200 a year for our boat for indoor storage, but we have keys to the building and 24/7 access. H goes down pretty much every night in the summer to tinker and the owner has no problem. I'm honestly not sure the type of insurance the property has but it's a boat yard/business so I'm sure insurance would cover damages if something were to happen to the property.
It stinks because up until last year it was his uncle's business and we got a family discount and only paid $600 per year in exchange for H cutting the grass, helping with the other boats, and other things around the property, but the property his uncle leased was sold and now we rent from the new owner.

ETA: we also have electricity access.

It's in your best interest to check into this. 90% of these work the same as a tenant renting a house. The landlord is responsible for insuring the building itself, but the tenant is responsible for insuring their belongings.

SITB

True, but with that said, I could see a person (or their insurance company) renting an outbuilding going after the owner of the building if it could be argued the "bad" was due to the owner's negligence. Like if a big tree falls on the building and damages the boat/RV or an electrical fire.

This was the scenario I was kind of thinking of... if the damage to the stuff inside was caused by something outside or by the building itself.

brij2006 · March 2016

short+sassy said:

brij2006 said:

abrewer5 said:

We pay $1200 a year for our boat for indoor storage, but we have keys to the building and 24/7 access. H goes down pretty much every night in the summer to tinker and the owner has no problem. I'm honestly not sure the type of insurance the property has but it's a boat yard/business so I'm sure insurance would cover damages if something were to happen to the property.
It stinks because up until last year it was his uncle's business and we got a family discount and only paid $600 per year in exchange for H cutting the grass, helping with the other boats, and other things around the property, but the property his uncle leased was sold and now we rent from the new owner.

ETA: we also have electricity access.

It's in your best interest to check into this. 90% of these work the same as a tenant renting a house. The landlord is responsible for insuring the building itself, but the tenant is responsible for insuring their belongings.

SITB

True, but with that said, I could see a person (or their insurance company) renting an outbuilding going after the owner of the building if it could be argued the "bad" was due to the owner's negligence. Like if a big tree falls on the building and damages the boat/RV or an electrical fire.

Actually, in that instance it is considered an "act of God." So whether the vehicle was parked in a parking lot, a storage facility, or your personal home. It would be a comprehensive claim. It's the same as if your neighbors tree falls onto your home. Your homeowners insurance pays out, not the neighbors'. Unless they find that the tree was visibly dead and the property owner neglected it.

The electrical fire is a possibility. As long as the owner was negligent.

This is all the same if you have a storage unit with contents in it. The storage facility almost always offers the option to purchase property damage coverage along with the rent cost, to protect your belongings. They do not provide that coverage without an added fee.

Insurance is fun. ;-)

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