Self storage investing has grown in popularity over the years, with more and more individuals and companies looking to invest in this lucrative market. Whether you are considering buying or building a self storage facility, or already own one and want to learn how to manage and market it effectively, this guide will provide you with all the necessary information.
Self storage investing involves owning or operating a facility where individuals and businesses can rent storage units for their belongings. These units can range in size from small lockers to large rooms and are typically rented every month. Self storage investing has grown in popularity due to:
Now that we understand what self storage investing is and why it has gained popularity, let's explore the different aspects of this type of investment.
The first step in self storage investing is acquiring a facility. There are two main options: buying an existing facility or building a new one. Each option has its pros and cons, so it's important to carefully consider your goals and resources before making a decision.
Buying an existing self storage facility can be a quicker and more cost-effective option compared to building one from scratch. However, it's important to thoroughly research the market and assess the potential for growth before making a purchase. Here are some factors to consider:
For some investors, an innovative and potentially cost-effective approach to entering the self storage market is through conversions. This involves transforming an existing building, such as a warehouse, office building, or even a large retail space, into a self storage facility. This strategy can often be quicker and more affordable than constructing a new building, and it can also provide an opportunity to utilize structures in prime locations that might otherwise be overlooked.
Conversions can present unique challenges, however, including navigating zoning regulations, assessing the suitability of the building for storage purposes, and making necessary structural modifications. Conducting a thorough feasibility study is vital to ensure the chosen property is a viable candidate for conversion. Despite these complexities, with careful planning and execution, self storage conversions can be a lucrative avenue for those interested in self storage investing.
Building a new self storage facility allows for more control over the design and layout of the facility, as well as potential cost savings in the long run. However, it also requires a larger initial investment and can take longer to generate income. Here are some considerations when building a new facility:
Now that you have your self storage property, the next step is to set up your business.
Before opening your self storage facility, you'll need to obtain the necessary permits and licenses from local authorities. These may include building permits, zoning approvals, business licenses, and fire safety certificates. It's important to research and comply with all regulations and codes in your area.
Setting rental rates for your storage units can be a balancing act. You want to ensure they are competitive enough to attract renters, but also high enough to cover your expenses and generate profit. Research the market rates in your area and consider factors such as location, unit size, and amenities when setting your rates.
Managing a self storage facility can be a lot of work, so it's important to have a team of reliable staff to help you. This may include property managers, maintenance workers, and administrative staff. Consider the responsibilities involved in managing your facility and hire accordingly.
Once you have acquired a self storage facility, it's important to effectively manage it in order to maximize profitability. Here are some tips for effective management:
Having a solid marketing plan is crucial for attracting renters to your self storage facility. Here are some effective strategies:
Self storage investing can be a great option for those looking for a steady and potentially high-return investment with relatively low operating costs. With careful research, planning, and effective management, self storage facilities can provide a reliable source of income for years to come.
At Storelocal, our team of self storage consultants is here to help. We've worked with owners and operators who manage self storage facilities of all sizes. Contact us today to see how our expertise can help your self storage business thrive.