Uhaul rental income in Mini Storage complex

[CANative]

13 years on the forum and that's about how it is on any given subject. But knowledge does accrue over the years.

 

[CANative]

Income from a Uhaul running out of a storage facility... I say count it.
Income from a Uhaul running out of a small convenience store or gas station... I say don't count it.

Just be careful in deciding what the income really is.

 

[Ken B]

I figured out what you meant right after I posted.

But specifically, I see a parallel on hotels that offer day use passes to the storage facility that also has a Uhaul operation. The complimentary nature of a storage facility and a truck rental operation is almost the same as the complimentary nature of a hotel with a day spa operation. Some say NOT to include the Uhaul income. Why? The complimentary real estate uses can command higher revenues. The self storage doesn't need any significant buildings and the hotel doesn't either.

I think the difference between a spa and a truck would be self-evident.

 

[CANative]

I've been in trucks that felt like a spa.

 

[Michael S]

Not that this is the gold standard, but I just opened up my copy of "Self Storage Economics and Appraisal" published by the Appraisal Institute, and here is the relevant section regarding Other Income.

"Ancillary or other income in the operation of self storage property is most commonly derived from the following sources:
Administration Fees
Unit Insurance
Late Fees
Truck and Equipment Rentals
Income from the sale of merchandise (such as moving supplies)"

 

[Ken B]

Not a self-storage guy or a hotel guy, but I do play devil's advocate -

While any income realized from leasing UHaul trucks would seem to be entirely attributable to the business, if I store UHaul trucks on-site, am I foregoing income that could be realized from leasing outside storage space, thus effectively reducing potential rental income attributable to the real property?

 

[CANative]

Maybe, maybe not. Maybe all that needs to be "stored" is a reasonable rental ready inventory. Maybe one or two trucks? Uhaul has a national booking system (like flagged hotels/motels). The truck only needs to be there on the day it is booked.

 

[Michael S]

Not a self-storage guy or a hotel guy, but I do play devil's advocate -

While any income realized from leasing UHaul trucks would seem to be entirely attributable to the business, if I store UHaul trucks on-site, am I foregoing income that could be realized from leasing outside storage space, thus effectively reducing potential rental income attributable to the real property?

I've appraised a few self storage facilities and I don't think any of them offered outside storage. The only ones I've appraised that offered truck rentals were actual U-Haul self-storage facilities. In those cases we only included a portion of the income generated by the truck rentals. They also keep track of when people buy boxes, locks, packing supplies, etc. for a storage unit or for a totally unrelated U-Haul move. I don't recall how much of the total income was attributed to the allocated portion of the truck rentals and sales but it was definitely less than 50% of the total truck rental income.

 

[Ken B]

Again, not a self-storage guy, but from what I've seen, many have space for outside storage of vehicles (including RVs) and boats. That may be more common in areas like South Florida.

 

[CANative]

Again, not a self-storage guy, but from what I've seen, many have space for outside storage of vehicles (including RVs) and boats. That may be more common in areas like South Florida.

No. There's a Uhaul right here in Ukiah that has indoor self storage as well as small areas for parking/storing vehicles for a fee. I don't think I've ever seen any stored vehicles at this Uhaul and I go there every month or so and drop off the kids for school right across the street.