According to industry reports, self-storage has been one of the fastest-growing industries for the last several years. Opportunities are as good as they come, especially in this type of real estate. And, investing in self-storage is equally popular for both new entrants and those who have been in the business for quite some time.
There are a few obvious reasons why this particular industry has experienced consistent growth, such as the fact that a growing population will always require an increasing amount of space. However, a closer look reveals several other factors that have contributed to its popularity.
Why Choose to Invest in a Self-Storage Business – The Hard Facts
One of the most noticeable benefits of owning a self-storage facility is that it requires minimum engagement from the investor, to begin with. It allows you to generate passive income and offers you a significant amount of free time. This means you have more time and opportunities to pursue other cash flow streams by diversifying your investments. You can have your self-storage investment as a backup in case your other riskier investments should fail.
Some real estate properties, especially vacation rentals, might not see high returns in a particular season or month due to low consumer activity, but your self-storage investment got you covered financially. In a way, it allows you to control the amount of risk you wish to take (risk diversification).
Initially, starting a self-storage business might seem like a rather time-consuming endeavor. However, once you have established the facility, and only need to conduct monthly or weekly maintenance henceforth, you will see the profit margins increasing significantly when compared to the initial stages. The whole experience is comparatively stress-free, compared to most other real estate investments.
Now that we hopefully have you on board, let us go through the processes which ensure your decision of investing in self-storage will begin grandly and continue on a high.
How to Go About Starting a Self-Storage Business
If you’ve been wondering how to buy a self-storage facility, rest assured it involves a number of rather simple steps. Let us get to know more about these in a little bit of depth.
- Know the different types of self-storage facilities.
The first thing you need to consider is the type of self-storage facility you wish to own. The most common facilities you find on the market are climate-controlled and non-climate-controlled units, drive-by Units, vehicle storage units, and mobile units. Doing this will help you with the next most important factor—location.
- Research the location.
Once you have zeroed in on the location of the facility, you need to conduct heavy amounts of market research before approaching any financiers or property dealers for buying self-storage units. Your research should delve into the average incomes of the self-storage facilities in that area (specifically the type you have chosen), their average rent and maintenance fees, their advertising patterns, as well as the criticisms they have received, before investing in self-storage for yourself. This can help you get a massive head start over your competition.
- Sort out your financing and make some improvements if needed.
Once you have scoped out the necessary statistics, you need to zero in on a property, gather your finances, and do whatever is necessary to acquire the plot. Once you can start work on the property, your first priority should be to get in touch with a professional interior designer. This professional will be able to help you maximize the spaces within the property, thereby maximizing the amount of income the property can potentially generate.
At any step of these processes, feel uninhibited to consult the experts for relevant self storage investment opportunities and tips.
- Market your business.
The next indispensable step is to invest in marketing and advertising. This can be done through various methods, but it’s wise to stick to some known strategies. If you wish to advertise a particular type of storage facility, it’s necessary to single out the target demographic that you have in mind and ensure that they get a significant amount of exposure to your service. This ensures a high number of inquiries, which are going to be the main source of lead generation. Beyond this, it’s also worth noting that you should invest in a well-designed website, along with real estate search engine optimization (SEO) and other digital marketing solutions, which are excellent tools for getting more customers.
When you have successfully started your business, make sure you have a steady flow of income by spending resources on maintaining the property.
Maintenance, Management, and Growth
After the initial task of investing in self-storage is done, and your business is up and running, the next thing on the horizon is growth.
During the start-up phase, things could be very helter-skelter for you, but the amount of effort required after this phase is significantly lower. Once this happens, it’s time to think about potential growth plans. In each self-storage business model, extension and growth plans tend to go in their way. For instance, a drive-by unit can offer services such as a car wash to increase income.
However, it is also possible to be creative when it comes to your growth plans. You can choose to play safe and tread the popular path or try to create a niche market for your business by being innovative.
Maintenance and management are important aspects of sustaining a self-storage business. Regular maintenance must be scheduled for at least once a week for non-climate-controlled units, and even more frequently for climate-controlled units. Further, after each occupancy period ends, the units must be maintained and cleaned.
As your self-storage business expands, you would need more personnel working for the endeavor, such as accountants or even an in-house advertising team.
For more tips, news, and information that you can use for business, feel free to browse our site and read our other articles!