Self Storage Industry

[AroundTheWorld]

NEIGHBORHOOD

While lower income people certainly use self-storage, so do higher income people. What you want to look for in a location is: path of progress, population growth, new developments / subdivisions. etc.

A recent count states that one in ten American households uses self storage.

NICHE POSSIBILITIES

There are several niches in self storage - - - as people have already pointed out:

• Outdoor Storage
• Toy Storage (Boats, RV's, Snowmobiles, Watercraft) This can be indoor or out.
• Wine Storage is an emerging area

The beauty of this is that you can really tailor your self storage business to your goals or your area. Is your land in a lower income area? Go with the standard facility. Is it in a higher income area? Go with Indoor, climate control toy (rv / boat) storage, wine storage, etc.

 

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[AroundTheWorld]

START UP EXPENSE - CONSTRUCTION AND SITE​

Here is a short and simplified list to get your brain a turnin’

• Permit and License. Check with your local building code department to inquire about what kind of permits your project will require.
• Plan. You will need a site layout and plans for your building drawn up by either a drafter or an architect. Depending upon your government, you may need these plans to be stamped by an engineer. Check with your building department for information on what is required in your area.
• Cost of land. Your target land is: in a growth area, visible from a busy highway, 2 to 5 acres, flat or relatively flat.
• Site Prep: Do you need to remove any outbuildings? Eliminate top soil? Get rid of residual ‘junk’?
• Construction: Will you be using a general contractor or doing this yourself? If you will be using a general contractor, you can get bids from 2 or 3 contractors. If you will be doing it yourself, consider the following:
• Excavation and driveways. Your driveways need to include some sort of drain system for rain and snow.
• Concrete pad.
• Building: Will you be stick framing, or ordering a pre-fab metal building? You can even go with concrete walls! Remember to include labor and material. If your buildings will be climate control, there will be added steps and costs.
• Doors: There are also several variety of doors to choose from. Do an internet search and call several places for quotes.
• Gutters and Snow Breaks.
• Fence and Gate System. Not all facilities have a fence and gate system. Providing this adds value to your facility, and security for your clients.
• Office. There are several options here. Would you like to provide an apartment for an onsite manager? You can also do a stand alone office, turn one unit into an office, or have no office on site. This decision will impact your start up cost.
• Signage and Banners. This is an important component of your advertising campaign.
• Security and Lighting. Will you provide these amenities at your facility? Again, this is an easy way to add value.
• Office Supplies. You will need a computer, a software program, a telephone line, etc.

This is a basic list for your construction cost and does not include all of your start up costs... I'll save that for another day.

 

[Luke12321]

Being very interested in the self-storage industry....thanks for the list. Speed +++.

 

[yveskleinsky]

...How many square feet of a facility do you/can you generally fit on acre?

 

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[AroundTheWorld]

From 15000 to 20000 per acre.

 

[eTyler19]

NEIGHBORHOOD

While lower income people certainly use self-storage, so do higher income people. What you want to look for in a location is: path of progress, population growth, new developments / subdivisions. etc.

A recent count states that one in ten American households uses self storage.

NICHE POSSIBILITIES

There are several niches in self storage - - - as people have already pointed out:

• Outdoor Storage
• Toy Storage (Boats, RV's, Snowmobiles, Watercraft) This can be indoor or out.
• Wine Storage is an emerging area

The beauty of this is that you can really tailor your self storage business to your goals or your area. Is your land in a lower income area? Go with the standard facility. Is it in a higher income area? Go with Indoor, climate control toy (rv / boat) storage, wine storage, etc.

wine storage! I have never heard of that holy cow! That might work really well in my area... :idx:

I don't know if my area has enough wine collectors to support this type of storage... hmmmm

 

[Bilgefisher]

I seem to remember seeing a spreadsheet posted on self storage. I can't seem to find it or my memory is fuzzy. Is that available? Is that the same spreadsheet from the B&P videos?

 

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[Luke12321]

I don't know where a spreadsheet is located but I have just watched the videos from BP. Great job ATW & Doug. Speed ++

 

[Phil]

Speaking of a Low maintenance investments.

I saw a self storage business that wasn't even based in a warehouse!

It was literally just some land on an industrial park filled with large shipping containers that people could use to store the belongings in.

He had the lowest rates of any storage business in my city.
I would hazard a guess that he has some of the biggest margins too.

 

[AroundTheWorld]

Bilge - what specific info are you looking for?

 

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[Bilgefisher]

The B&P video you showed a graph on screen having to do with investment evaluation. For some reason I was thinking you posted that on here at one time, but I couldn't find it.

Its in part 1 of the video describing the phases of building. Perhaps you posted another spreadsheet. My memory is a bit foggy.

 

[Beepers]

I have a friend making a fortune in self storage in the UK.
He uses 40 foot containers standing outside.
He's just bought a second site for $3 million.
Be interesting to see how it goes the next 2 years
with the slowdown
cheers
mark

 

[andviv]

I don't remember seeing a spreadsheet about this, but I'd assume if she posts it then she will put it in the same thread as the videos in the fastmentors.com site...

 

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[Jason_MI]

So did any of you end up buying/building? I owned several for some time and sold all of them in....2006?

 

[reipro]

Slelf storage can be propfitable. Just be careful. You must have a sight that is big enough to have an onsite Manager. We did not, we had to make may trips to the site to rent out units. Imagine driving accross town to rent a unit for $20 per month. Not much fun! Also I would look at the CAP rates on the deal really close. General Electric sold something like $20 billion worth of self stoage 2-3 years ago and got out of that business. I would say they are smarter than I am so if htey think it is not a good investment, who am I to argue.

 

[SteveO]

General Electric sold something like $20 billion worth of self stoage 2-3 years ago and got out of that business. I would say they are smarter than I am so if htey think it is not a good investment, who am I to argue.

Just a note. Yes... I do think you are smarter than they are. The people making most of the operational decisions are employees. I make a business out of making better decisions than the larger players. It typically revolves around moving ito a market when they are moving out.

 

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[AroundTheWorld]

You must have a sight that is big enough to have an onsite Manager. We did not, we had to make may trips to the site to rent out units. Imagine driving accross town to rent a unit for $20 per month. Not much fun!

There are ways around that too!

 

[andviv]

There are ways around that too!

And now I feel so smart because I know (ATW, thanks for sharing the info on how to accomplish that during March's 2008 meetup). For those that want to know, check the video in the other website.

 

[reipro]

Thats for the vote of confidence Steve. Shoot me your phone number in an e-mail. nebraskainvestor@yahoo.com I would love to catch up.

 

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[AroundTheWorld]

From another thread....

Jeeze, I was racking my brain trying to think of other RK "automated" type businesses and I forgot the big purple elephant in the room!

(hope you don't mind being called a purple elephant, Sonya)

I prefer purple people eater.

What happens during an economic downturn?

Do people stop paying their bills, and you get all kinds of neat stuff?

Do vacancies increase? Delinquencies?

Any new problems?


-Russ H.

Occupancy in one facility has slowed, but is still going up. Occupancy in the other has leveled off. We were projecting growth. (still in the lease up phase).

Delinquencies are way up. However, it ultimately means more revenue, because we collect on late fees. The slow payers and troublesome, and make cashflow more challenging. However, increase in late fee income helps offset that a bit.

Auctions are NOT up. When it comes down to it, most people still just want their stuff... so they come in and pay just before auction.

Turnover is HIGHER. Typically, once you get through your "lease up" phase your tenants will stabalize and you won't experience much turnover. However, we have been experiencing a higher turnover. More move ins, and more move outs.

Moving Truck Biz. Doing well. People need to relocate during hard times.

 

[TJComer02]

Hello, This is my first post here. I usually don't join forums unless it's car related. Anyway, me and my friend were talking about storage property and the demand where I live. People are on a waiting list. I really would like to use around 40% of my income this next year to invest in this business and also maybe renthomes. I really know nothing about this market right now, but then again, the 3 businesses I have started, I knew nothing about them either, I just know how money works (still learning). Anyway, I really don't want to finance, even though my credit is good, unless I absolutely have to. I was wondering just how many people had a successful job/business first and used their own income mostly to finance their property? It seems alot of people on here bought property before they had alot of money coming in.

 

[Russ H]

TJComer-

Get to the fastmentors site-- it has one video that will give you great, great info on self storage.

And the way the Sonya and Doug are doing it solves virtually all of the problems that REIMentor mentions (build a better mousetrap, y'know?)

I was there at the meetup when they presented how they do self storage, and I have to say, I was impressed at how "hands off" they have made their business-- so much so that they can live in a different area, and monitor everything 24/7, and STILL not need an onsite manager!

-Russ H.

 

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[maximus20895]

I am very interested in starting up one of these businesses. My plan is to start up in real estate options to gain some money and then pull the trigger on this.

 

[Excalibur]

fastmentors.com link doesn't work. Did a domain search and it shows as available so I can only assume.....

Is the video available elsewhere?

 

[MJ DeMarco]

Spammer deleted ...

Maybe Sonya can comment on this 4 year old thread if she still operates the facility. I know she is going through some personal challenges and transitions.

 

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