A three-year-old Colorado startup billing itself a kind of as Airbnb for vehicle storage may present some income possibilities for commercial real estate owners and managers stuck with empty parking lots and other vacant spaces.
STOW IT was launched in 2017 as a peer-to-peer app by a small group of entrepreneurs, many of whom were Colorado State University grads, in Fort Collins, Colorado. Now it uses the app and a website to connect renters and hosts who have the means and ways, respectively, to address common vehicle storage issues. So far, it has 15 locations up and running in three states -- Colorado, Minnesota, and Texas. For example, here are available spaces near Denver.
Below, co-founder and CEO Carmelo Mannino shares what STOW IT is all about and how it can benefit investors.
Please describe the services your company provides.
STOW IT connects companies and individuals that have vacant real estate, such as surface lots, parking garages, land, and barns, to others who need vehicle storage. We specialize in storing items on wheels such as cars, boats on trailers, RVs, and semi trucks.
STOW IT takes care of the marketing, payment processing, and evictions so that property owners can easily create a new revenue stream through storage.
There are millions of vacant parking spots and millions of acres of land that are sitting idle not making any income. Warehouses, parking garages, and barns sit empty for years in some instances. The storage industry keeps building facilities to keep up with demand, but that demand can be met with existing but unused space.
Please describe the surge in your business. How many clients do you have now, and how fast is it growing?
We have grown over 100% every year since inception, but currently COVID-19 has further increased our growth rate.
Boat and RV sales are expected to double 2019's sales, which means more people need storage. Plus, the semi-truck industry is having to hire new drivers to keep up with the increase in e-commerce. This means more commercial drivers on the road who have to store their semi equipment each month.
A lot of parking garages also are at only 40% to 60% capacity. It's a great time for operators to start using their empty spaces for vehicle storage because the demand is so high.
Who are your clients?
We work with anyone that has vacant space. Our clients range from billion-dollar real estate firms to individuals with a single-car garage. We work with many parking operators large and small and work with individual owners of land and barns to help them turn their vacant space into monthly income.
How do your clients price to compete with operations such as the big national chains?
Typically, our prices are 20% to 30% cheaper than traditional storage. Many of our property owners may not offer all the benefits of a traditional facility, but most consumers do not need all the amenities that they pay for but never use at a traditional facility. Most consumers just want a safe place to store their vehicle. They don't care about all of the bells and whistles.
Pricing varies based on amenities and location, but the average outdoor space rents for around $70 a month, and the average indoor space rents for around $150 a month. At our website, we have an estimator so that operators can see how much they could make per space.
How much space do you need to make a location like this work?
STOW IT works if you have thousands of spaces or just one. The system works the same. The more spaces you offer, the more you can make each month.
We have individuals that rent out one space and pay their electric bill each month with STOW IT, and then we have companies that make over $100,000 a year with STOW IT in additional revenue through storage.
What's involved in starting up a business like this, including permitting and those kinds of considerations?
The permitting varies from county to county, but most of the time you are allowed to have some type of vehicle storage, especially in a commercial space.
The more improvements you make to the property, the more desirable the space becomes for potential renters. But no improvements are necessary.
Many of our property owners rent out their land with no improvements. However, many consumers do want some basic amenities such as fencing and gravel. No improvements are necessary to work with us.
How about providing security and managing it? How much is involved there?
Consumers store their vehicles at their own risk, and the liability aspects are covered in our terms that all consumers agree to. Adding in security can increase the price and attractiveness of your space to potential renters.
We leave this part up to the property owner. We have spots that are gated with lights and security cameras and other spots that are fields of grass where the owner may live on-site.
While we handle the marketing, payments, and evictions, we do ask that property owners move each tenant into their space. Other than moving them in, there is not much management, and our system makes staying organized easy for the property owner.
Can anyone do this who owns a property, or do you need to be a big CRE firm with a lot of resources to make this work?
Anyone can use STOW IT. There are no upfront fees or hidden costs. We take 10% of the list price per month when we bill the renter. If you aren't making money, neither are we.
What's the secret sauce for identifying a good spot and market for this?
Location and price are the top determining factors for how successful a space will be. If the price is right, people will travel for storage. Most individuals only need access a few times a year to their vehicles, so they are willing to travel for a lower price.
On the outskirts of major metro areas is where most people need storage. There are a lot of HOAs, for instance, that have rules that require residents to store their boats or RVs at some other location, ideally near their home.
What's your best piece of advice for anyone considering diving in?
Go for it. There really are not many risks involved in getting started.