Are you looking into self-storage as a business opportunity? It can be difficult to know where to start and how to get into the industry.
The popularity of self-storage businesses has been increasing for several decades. However, it’s important to know the ins and outs of running a business like this.
Read on, and we’ll look at 5 important things to know before you start running your self-storage business.
1. Running a Facility Takes Work
You might think running a self-storage business is as simple as setting it up and leaving it to make you money. Sadly, this simply isn’t true. There are many operational responsibilities, including;
- Maintaining awareness of competitor rates
- Maintaining the facility itself
- Researching and adhering to regulations
- Keeping financial records
2. Bigger Doesn’t Mean Better
It’s easy to assume that the bigger the unit, the more money it will make. This may be true for traditional real estate, but it’s not the case for a self-storage facility.
A facility’s overall profitability depends on more factors, including cash flow, occupancy rates, operating revenues, and other financial variables.
3. Location Matters
A drive around a city or suburb may lead you to believe that you can build a self-storage facility anywhere and it will make money. Units are popping up all over the country as the popularity of the business continues to increase.
This is not the case, and you can be sure that most, if not all, successful self-storage businesses will have had a meticulous planning process concerning their location.
Facilities which can be accessed easily, or seen from main roads and carriageway are more likely to succeed. The same goes for facilities placed in areas that have a proven track record of employment and residency.
Consider these things when scouting a potential location for your business.
4. Know How to Make Money
Because of the industry’s popularity, many new facilities may be rushed to completion without proper planning and research into the viability of the project. However, there is much to be considered if you want to run a profitable business.
Market research, analysis of the economy, and its future potential are all important factors to consider before investing in any assets.
A good base of business knowledge is also beneficial. It’s one thing to purchase a storage unit, and another to run it in a manner that will be profitable.
5. Know Your Costs
Beyond the cost of the storage unit itself, other costs must be considered. Any good businessperson will make sure that they are aware of these costs and can afford them before deciding to get into the business.
Costs that need to be taken into account are;
- Land – rental or purchase of the site
- Warehouse – to store unoccupied units
- Insurance – of the units and warehouse
- Security – clients will appreciate any extra security measures you offer
Get in touch today if you think you’re ready to invest in self-storage.
Self-Storage Is a Great Opportunity
Self-storage is a fantastic business to get into. Following the steps in this article should get you on your way with confidence. Starting your own businesses is an exciting time and with the right research into self-storage, success could be on its way to you!
For more information and advice on self-storage investments, check out the blueprint for success.