Mini storage

Kitch

Kitch

Pre-takeoff checklist
Joined
Oct 29, 2018
Messages
391
Location
SE Mass
Display Name
Display name:
Kitch
Thinking about adding a self storage facility to the investment portfolio. If anyone is involved in self storage any information would be appreciated.
 
My BIL owns four of them in the area and is building a 5th location currently. I know the business well, having worked there part time during high school and college. What questions do you have?
 
Just curious if it’s a good investment. I know apartments aren’t my style. Can it be managed effectively from 1600 miles away. The one I’m looking at has a 90+% capacity for the last 10 years. I’m basically trying not to walk into this eyes wide shut.
 
Kitch said:
Just curious if it’s a good investment.
Click to expand...
It’s a solid investment and very recession proof. My BIL uses them as his sole income source, if that gives you any idea of stability. There can be swings in demand like anything, but generally speaking, demand stays quite high. I recall posting a gross average of $30k per month around 95% capacity in a 600 unit complex. If you can add uHaul to the business, you get an extra bit each month, although for the percentage of commission that you earn, it’s not really worth it IMO, but something to think about. Is the place you’re looking at climate controlled or are they outside units?
Kitch said:
Can it be managed effectively from 1600 miles away.
Click to expand...
Yes, with a caveat. If you’ll be running them from a long distance, you’ll need a solid general manager of some kind who can oversee things and effectively communicate with you. There will be situations come up with various issues that will need someone physically present to handle and these are usually things beyond the scope of duty that the office manager will do (HVAC, unit and building maintenance etc.) this will be where the general manager would come into play, if you can’t be there to see what’s going on. This would preferably be someone who already knows the business model, rather than someone who doesn’t, otherwise it’ll be blind leading the blind. Overall, you definitely could manage it from across the country, though it wouldn’t be ideal. Just make sure you get your ducks in a row. I can go into greater detail, just let me know!
 
Have a few associates over the years that have had them and all looked for facilities that also had adjacent land because they made even more per sq ft than the storage lockers paid by throwing down base rock on the empty lot, toss up some cyclone fence, and renting the land out as boat/RV storage with as minimal infrastructure/labor/maintenance cost as you can get.
 
RyanB said:
My BIL owns four of them in the area and is building a 5th location currently. I know the business well, having worked there part time during high school and college. What questions do you have?
Click to expand...

I already have available land, so how long until I expect a return on investment? Looking at possibly 50 or so units along with outside storage.
 
I know one person who is truly a self-made man, grew up poor but now flies his own turbine airplane, who told me that his self-storage business was the best business he'd ever had. He employs one full-time and one part-time employee to run it and the money rolls in.
 
Why do so many storage facilities have the manager living onsite? Even the small complexes seem to have living quarters around here. They aren't open 24 hours so I assume it's a security thing?
 
Zeldman said:
I already have available land, so how long until I expect a return on investment? Looking at possibly 50 or so units along with outside storage.
Click to expand...
Depends what the demand is like in your area, but 2-3 years quite easily. Also, while outside storage (non-climate controlled) is cheaper to construct, you won’t get the same money out of it, as you would with climate controlled.

I remember the last building my BIL opened up. It was just over 200 units and it took a couple of years to achieve 90% occupancy.
 
ColoPilot said:
Why do so many storage facilities have the manager living onsite? Even the small complexes seem to have living quarters around here. They aren't open 24 hours so I assume it's a security thing?
Click to expand...
I’ve never seen that, at least here. Must be a regional thing?

Access hours will vary, but at my BIL’s place, they’re 6a-9p year round. There has to be someone physically present in the office to handle paperwork and issue the access cards, but those office hours are much more limited than the access times of course.
 
I appreciate all the feedback. I found a location I'm in the preliminary investigation stages at this point. It's 144 units. The way I crunch the numbers it comes out to almost 4k a month positive cash flow... Trying to figure out if its that cut and dry or not.
At this point I need to nail down any additional cost ie insurance, property tax, etc
 
Kitch said:
I appreciate all the feedback. I found a location I'm in the preliminary investigation stages at this point. It's 144 units. The way I crunch the numbers it comes out to almost 4k a month positive cash flow... Trying to figure out if its that cut and dry or not.
At this point I need to nail down any additional cost ie insurance, property tax, etc
Click to expand...


Have you done a Youtube search for insight? There are a ton of investment guys posting videos about ins and outs of investment business like storage units.

Take it all with a grain of salt as the videos are geared more towards infotainment and clicks...but you can get a good look into the inner workings and pitfalls.

One of the more creative things I saw an operator do was if anything was left behind by tenants that was not absolute garbage, rather than pay to dispose of he tossed it all in a vacant unit then once filled included it in the abandoned unit auctions every few months!
 
Last edited:
Guy near our airport had some land. Built an RV park and RV/boat storage area. He's doing pretty well with it!
 
flyingcheesehead said:
I know one person who is truly a self-made man, grew up poor but now flies his own turbine airplane, who told me that his self-storage business was the best business he'd ever had. He employs one full-time and one part-time employee to run it and the money rolls in.
Click to expand...

One of my childhood friends is now a wealthy old man because of self storage units and mobile home parks.
 
You must log in or register to reply here.
Back
Top