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:
- 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
- Have a Mixture of sizes of storage units
- Need variation to offer customer base
- 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
- How many vehicles drive by the facility every day?
Signage and Visibility:
- Understand local laws on signage allowances
- An area that is easily accessible
- Is property managed by the owner or a management company?
- Are you going to self-manage or hire someone?
- 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.