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 toilets. Investing in self-storage facilities can be profitable.
This article will show how to find good deals, the three main types of self-storage properties, the two ways these deals are structured, how to find funding for these properties. It will also highlight the two most common myths and perhaps most importantly, what to watch out for.
Why Invest in Self Storage Facilities
- No matter the economy, good or bad, people will always need storage
- 1 out of every 10 people in the US use self-storage
- There are 50,000 self-storage facilities in the US
- The self-storage business is a 220 Billion dollar industry
- 80% are owned by mom and pop operators
- Provides cash-flow
- The average stay in a self-storage facility is 1-3 years
- Lower turnover costs
- No toilets, no trash, no tenants
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
2 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:
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.