Why invest in Self Storage
Increased awareness of industry
Increased marketing expenditure and high visibility locations have ensured that the general public awareness of self storage has increased to a degree where people are more likely to consider using the service and lenders are becoming more experienced with the industry thus offering more favourable terms.
Reduced management role
In general, depending on the facility size and the range of services it offers, a facility can require as few as two staff members, one of which can be part time.
Low failure rate
Most industries suffer a failure rate of 1 in 2 businesses in their developing years. This can largely be attributed to cash flow problems, poor business planning, lack of finance, poor choice of location and poor marketing. However, with a failure rate that can be as low as 1 in 10, self storage businesses, in general, are better equipped to manage these issues.
Easy start up
The barriers to entering the self storage industry are comparably low to other industries. Once research is completed, a location identified and partitions/access control installed, the business can be ready to begin operating.
Due to the nature of the business, customers are the only people who have access to their units meaning that the only areas requiring maintenance are the corridors and external area. Once a unit is vacated, all that is required is a sweep out. Using the Steel Storage Streamline system, this can be minimized even further as the specially designed partitioning includes a plastic insert that’s not only safe but also blocks dirt and dust lodging at the base of the partitioning system.
All investments involve risk. In self storage, the main risk is getting the facility to successfully achieve its projected, stabilized level of occupancy. Minimizing the risk would involve taking the right steps when developing and managing the facility. For example, ensuring that there is a clear understanding of current market conditions, both locally and nationwide. This includes understanding aspects such as rental rates and facility features. In addition, the success of a self storage facility is rarely dependent upon a single tenant. Even the largest customers rarely represent more than two per cent of the overall occupancy.
High investment returns
Self storage businesses have been known to produce a 20% return on investment by the fifth year. Returns generally continue over the life of the investment which is why so many self storage owners choose to stay with their investment over the long term.
Quick establishment of cash flow
Once the business has begun operating and rentals are agreed, cashflow has started. With little overheads putting a dent in day to day cashflow, there is less risk of running into trouble at the early stages of the business opening.
Adaptability of self storage buildings
The design and layout of self storage facilities can overcome challenges such as irregular shaped buildings which means that lower priced buildings can be purchased.
Extending beyond operational and management considerations, self storage is a new and exciting industry to work in with huge possibilities for expansion.
A GUIDE TO SELF STORAGE
A step-by-step guide to self storage, and storage as a business opportunity
Big Yellow Self Storage has been working in partnership with Steel Storage since we opened our first facility in May, 1999. They are professional, provide the highest quality product and offer the most reliable and trustworthy solution. The Steel Storage products and services ensure that we can offer our customers a world class facility. We always receive an excellent level of service and enjoy working with the whole team.