Understanding the Self-Storage Business
Self Storage is a Good investment.
Self-storage owners come from all walks of life and get into the business for a variety of reasons. That’s what makes self-storage such an unusal and unique opportunity.
Some get into it because they want to run their own business, others because they don’t want to run a full-time business, but see self-storage as having a good return on investment or a parttime business. Many people find self-storage to be the ideal business for retirement.
The fact is, self-storage is the kind of business that will fit almost any kind of lifestyle or professional goals. And, you don’t have to have a long list of credentials or be an expert, in order to become an owner.
A little history. Self-storage is a fairly new business which started in the 1960s and has been flying under the radar until recently. Lately, Wall Street has discovered it as an excellent investment, one that has a better return-on-investment than traditional real estate, so today the business is becoming more and more popular.
Another important advantage of becoming a self-storage owners that you’re in a business that has mass appeal. A Self-Storage Association survey reveals that because we live in a highly mobile society, virtually everyone uses self-storage. People of upper and lower income, men and women, singles and marrieds, young and old. But they all have one thing in common. They need self-storage because they are going through some kind of change in their lives: Job change, divorce, moving, down-sizing, For whatever reason, their lives are changing and they need extra space for their valuables.
Most storage space is used to store personal items, and about 25 to 35 percent is used for commercial purposes – small businesses, inventory or records-keeping for businesses, contractors, doctors, lawyers, sales people – you name it. Almost everyone at one time or another has the need for self-storage.
To really understand the nature of the business, think of it as a retail business, similar to any other retail establishment. The only difference is this: with self-storage, you’re marketing space, not clothing, computers, furniture, food or automobiles. It all involves real estate development and it should be treated as such. Think about this. When you are in the buying mode, you want the convenience of nearby shopping, right? Seldom will you drive any distance to purchase what you need. It’s the same with self-storage. It must be treated as a local business, convenient to people in the immediate neighborhood.
Is it a maturing business? Is overbuilding becoming a problem? Again, look at it as any other retail business. Its success depends on location, accessibility, traffic count, the number of rooftops, competition, and population density. The same formula applies to self-storage. Sure, it’s a good business, so more and more people are getting into it. That means more competition. Today’s owners are spending more money and offering more features to their tenants than ever before. This means anyone in the business better know what the competition is doing. The challenge today is not to keep up with the competition, but to stay ahead. In the final analysis, if you do your homework and pay attention to your competition, you’ll succeed.
