The Pros and Cons of Owning a Self Storage Facility
If you’ve ever thought about owning a self storage facility, there’s never been a better time to start. The storage industry is booming, and it’s time to make a move. If you’re wondering how to navigate the world of self storage and facility management, Sunbird Storage Management is here to help guide you through the process.Â
Why Start A Self Storage Business?
Starting a self storage business, owning a self storage facility, or getting into storage management is a real estate business investment that provides an easy, stress-free, and practical solution to a growing challenge: what do we do with all our stuff? Storage is necessary to keep valuables safe and organized. But beyond the obvious that we have too much stuff, self storage facilities also address various issues brought about by unexpected business expansion or contraction, and of course, life changes.An Increased Need for Storage Among Homeowners
Many homeowners are currently downsizing or in the process of selling their homes and need to store items in a high-security self storage facility. As for vehicles, the continued rise in fuel prices has forced some to store their extra cars and SUVs in storage facilities equipped with long-term, off-site vehicle storage as well, where security won’t be a problem.ÂThe Rise of the Home Office and Its Effect on Self Storage Units
Purely work-from-home arrangements have modified traditional home spaces. The home office has now displaced extra bedrooms or old storage areas at home, and now, even more, stuff needs to be put in a self storage unit. There are also unexpected legacies from family members (what will you do with grandma’s old furniture?) to deal with as well.ÂCurrent Business Trends and How They Boost the Self Storage Industry
Many small businesses have embraced virtual working spaces and need safe and secure storage facilities for all business records and extra office equipment. Some local businesses also use storage facilities to stash precious business inventory. There are even online entrepreneurs that use their storage units as a staging area for delivery fulfillment.ÂThe Growing Population and the Future of Self Storage Facilities
Finally, the growth in population, matched by shrinking living floor areas, is another factor. The demand for extra storage space will only increase in the years to come.ÂThe Pros of Owning A Self Storage Facility
As with all new business ideas, however, it pays to take some time and check your storage investing options. There are a lot of moving pieces needed to set up a new business. We’ve compiled this helpful list of the pros and cons of getting into the storage business.1. High Demand
Today’s high-consumption society will increase the demand for storage facilities. Customers are buying more, encouraged by the speed of online transactions and deliveries. Many small businesses now also offer online services, shopping, and more. People will need extra storage units to keep their items accumulated over the years. The need for self storage never changes as people progress through life’s varying stages. Whether customers are moving, renovating, or opening a business, self storage offers ideal solutions.2. Low Maintenance Business
Running a self storage business is generally low maintenance, so your administrative and overhead costs are reasonably low. Customers will typically come in and inquire about rental rates, ask about any insurance policies required, choose payment plans, and rent their storage unit. You probably won’t have to interact with them again until they move in and out of their self storage unit. You’ll also save on salary expenses; you won’t need many staff on-site and you can manage operations easily and focus on keeping your property safe and secure.3. Manageable Work Hours
When running a self storage business, you have the freedom to set your own business hours and make them as flexible as possible. If you are not as hands-on in running this small business, you can hire staff or extra security to keep your storage facility safe and visit occasionally. The choice is yours.4. It can Generate Other Related New Business Opportunities
Owning a self storage facility can give birth to many other businesses. Of course, the main source of your revenue is the rent from your storage units. But you could also offer the following:- Offer insurance policies for their items
- Sell packing supplies
- Rent out truck or van rentals
- Provide moving equipmentÂ
- Offer pre or post-move cleaning services.
5. Support Local Businesses
Self storage facilities are perfect for companies that need extra space to store items such as documents, seasonal equipment, and business inventory. Not only will they be kept secure but also free up space to accommodate their customers better.6. A Self Storage Business is Recession-Resistant and Resilient
Thanks to its unique business structure, self storage facilities do well in both thriving and struggling economies. When the economy is doing well, the self storage market also does well. Many will buy more items, businesses will expand and they will need storage space. The same thing goes for a bad economy. People will downsize and the extra storage will come in handy.ÂThe Cons of Running a Self Storage Business
1. A Bad Location Can Be Bad for Business!
Where your self storage facility is located is key to your success. It should be in a high-traffic or high-visibility area so prospective tenants can easily find you and get easy access to their storage units. You can purchase real estate property to build a new facility but you need to make sure before any new construction takes place, its location is in a commercial zone for storage facility use. A quicker way to get started is to buy an existing facility and change or upgrade the facilities and management systems. But make sure you do your due diligence. Check their historical sales and analyze how they were doing business-wise. This can give you a clue on how you’ll do as well. If the area is promising, your storage facility has a good chance of thriving. Whichever you choose, take the time to do the proper market research.2. Finding the Right Employees Can Be Challenging
Many self storage enterprises have failed due to bad employees and bad management. It’s hard to find the right people to help your business grow. Take the time to vet potential new hires and take a look at your hiring systems as well. Better yet, partner with storage management experts like Sunbird. We’ll help you manage your team, and to listen to their viewpoints, and ensure that they stay motivated and engaged.3. Large Financial and Personal Commitment
The high demand for self storage is not enough to ensure the success of your self storage business. You’ll need to give your full commitment by working hard to submit all regulatory requirements, manage staff effectively, implement targeted marketing efforts, and guarantee great customer service. You’ll also need the capital to cover all the start-up and operational costs of owning a self storage facility. You need to consider all the construction costs and how much it will range per square foot. And if you have investors, you need to be accountable to them and communicate how self storage investing is working out for them based on your revenues.4. Security is Expensive
Self storage units usually come standard with many security features and protocols to keep your customer’s property and valuables safe. You will need to provide security features like:- Doors with Keypad access
- 24/7 security camerasÂ
- Climate-controlled unitsÂ
- Fencing with electronic gate access
- And more for your customer’s peace of mind.Â
5. The Occupancy Rate of Your Self Storage Facility Will Vary
The fastest way to turn a profit when owning a self storage facility is to maintain a high occupancy rate. Depending on your market and local self storage industry, comfortable occupancy rates are around 90%. But this might be a difficult target to hit, considering it is hard to predict unexpected life changes that might force some to give up their storage units.Â6. Highly Competitive Industry
Once you start operating your self storage facility, make sure to stay informed on current trends. The self storage industry is highly competitive. There are many large national companies or chains now offering storage management. Many offer special unit sizes, discounts, and even storage rental promotions depending on the current availability and occupancy rates. But before matching their offers, you need to sit down and crunch the numbers because it might eventually eat into your earnings.7. Challenging Customers
Whatever the business, there will always be problematic or challenging customers. You won’t be spared from the number of tenant issues that are sure to crop up. This includes late fees, storing banned items in the storage unit, theft, and more. If you are not ready to deal with these concerns, then running a self storage facility might not be for you.Owning a Self Storage Facility Is Worth It
Reading through the various pros and cons of owning a self storage facility is the first step in deciding if this business venture is right for you. And while a self storage business has great potential for large profits, you should still consider all the risks and rewards before making your final decision. ÂReady to get started with self storage management? Let Sunbird Storage Management provide you with all of the support and guidance needed for a seamless transition. We’ll provide you with everything necessary to ensure your business is running at peak efficiency. Contact us today and discover how we can help transform your storage business.Â
6 comments
Sammy Hyder
Hello
I am considering stepping into or at least start digging into understanding the self storage business. Please advise if your organization offers consultation on how to start this business or you only help with scaling/growing or managing an existing business.
Olivia Amelia
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martencooler
This article is written so well and much useful and informative.
Thanks for giving such wonderful informative information.
I hope you will publish again such type of post.
Regards
Sofia Noah
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Jack Levi
Absolutely…very helpful and clear to understand. Thanks a lot
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