Self Storage Investing Benefits for Your Portfolio

Self Storage, like what Mindful Workspaces and Storage does, has become a great way to obtain tremendous cash flow without the headaches of having tenants or cleaning public bathrooms. Investing in self-storage facilities can be very profitable.

This blog will provide valuable information on:

1 – How to find good deals.

2 – The three main types of self-storage properties.

3 – The two ways these deals are structured.

4 – How to find funding for these properties.

5 – The two most common myths.

6 – What to watch out for.

Why Invest in Self Storage Facilities

  • No matter how the economy is, people will always need storage.
  • One out of every ten people in the US uses self-storage.
  • There are 50,000 self-storage facilities in the US.
  • The self-storage business is a $220Billion dollar industry.
  • 80% are owned by mom and pop operators.
  • Provides consistent cash flow.
  • The average stay in a self-storage facility is 1-3 years.
  • Lower turnover costs.
  • No toilets, no trash, no tenants.

The Three Main Types of Self Storage Facilities:

  • Class A: 2000 or newer builds, in ideal neighborhoods
  • Class B: Built in the 80s or 90s, owned by mom and pop operators, with stable numbers
  • Class C: Much older builds, more maintenance issues, often in poor neighborhoods, can be risky

The Two Biggest Myths of Self Storage:

Myth #1: It’s a hands-off passive income business

  • In any commercial real estate business that is income-producing you need the 4 M’s to be successful
  • Systems on handling the Money, the Marketing, the Management, and the Maintenance.
  • If one falls down they all can fall down
  • The better you are at managing your business the more money you will make

Myth #2: It’s a quick turnaround business

    • Renovations take a long period of time to get stabilized
    • Takes the 4 M’s to succeed

 

Things to Look For in a Self Storage Facility:

Size:

  • You must know the size of the self-storage facility
  • You need 30-40,000 square feet to be able to afford a full-time manager
  • If self-managing you can start smaller, just know your numbers

Unit Mix:

  • Have a Mixture of sizes of storage units
  • Need variation to offer customer base

Location:

  • 90% of your customer base will be within 1-5 mile radius of the storage unit
  • Do research on the radius area to make sure there is potential
  • Is there area growing or shrinking?
  • Is the city expanding in the area or away from the area?
  • Know your competition

Traffic count:

  • How many vehicles drive by the facility every day?

Signage and Visibility:

  • Understand local laws on signage allowances
  • An area that is easily accessible

Management:

  • Is property managed by the owner or a management company?
  • Are you going to self-manage or hire someone?

Drainage:

  • Poor drainage will cause issues
  • When you do due diligence the Property inspector will help find potential issues

 

In the meantime, before you own your own property, and if you are looking for a cost-effective storage option, don’t overlook a storage unit from Mindful Workspaces & Storage. They provide key solutions to many business issues such as extra office space. And remember that storage containers do not require much to set up and are a great temporary alternative for businesses that require storage.

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