shipping container storage
Hello I am hoping to gain some knowledge and or insight in using shipping containers for mini storage. This idea has come up because my father is currently doing the same thing. His containers are on the same property as his small business and he does it on the side for extra cash. 15 or so containers and at least 12 are full at all times.
What are your thoughts on doing this? Any potential problems I am not seeing?
Thank you -Josh
@Joshua Chapin shipping containers can be very secure, at least as much as your average storage facility, and are relatively inexpensive (I'm thinking $2-3K for a decent to good shape 8x40'). That said, they get veeery hot in hot weather (it IS metal...), but I don't see any great disadvantages, as long as there are no zoning issues. What would be awesome is if you could get one of the models with double doors on each end (don't know the cost of those) or have a rollup installed on each end, put a wall in the middle, and turn it into two 8x20' units. Assuming $4k for container and mods, $65/mo each half, that's $130/mo or 3.25% monthly ROI per container, with payoff in 2.5 years. In addition, I'm going to bet you'd get around assessed property taxes that you wouldn't with a normal storage, though that's just speculation on my part. Let us know which direction you go, and good luck!
Chad, I have thought about splitting the containers in 2 compartments but haven't came up with the answer yet. The containers definitely need vents to keep codensation down. My after buys the containers for 2k each and rents the whole thing out for $110 a month. 5.5% ROI is appealing.
@Joshua Chapin I have looked into this as well, let me know if you find a way to make it work. I got stuck in what the possible regulations might be if you did it on certain types of properties.
Honestly I don't know that you'd need any more than a framed out wall, or a couple sheets of decent metal if you prefer to give each unit better separating security. As to vents, a cutting torch, welding equipment, flashing material, etc and you're all set in a day or so. I think you've got a great idea there, and the good thing is you can start fairly small and scale up as necessary if you prefer. Run with it!
Charles- my parents ran into the same problem. After talking with a few county departments they bought a 400k property to find out that the property type will not suite their container business. Their welding business is located on a IG property and they can have containers on that property no problem.
Chad- I am going to run with the idea just need to find how to pay for it all. Like you said at least I can start small and get some residual income flowing.
all good i even have some my self at safebox-selfstorage.gmbh in Germany
course its not the same as self storage
@Joshua Chapin right there with you. You actually just brought the concept back into the forefront of my brain, but I'm willing to bet that one of these RE financing strategies here on the site could be adapted to encompass containers. Where there's a will there's a way, as they say, and I think that's closest to being true in RE.
Hi @Joshua Chapin if you Google images modified shipping containers and just browse through the images you can get some great ideas as well as find some companies that sell the containers as well as do the mods for you, many of which give you the option to have electrical and hvac installed. Many companies also offer a lease program. The SBA might be another way to go if you are looking for financing for the containers. You are correct, in most municipalities a storage facility will usually have to be on land zoned as industrial/commercial. I have recently been looking into land under high tension power lines that can be leased from the power company. Many of these lots are undeveloped or have nurseries or tree farms, etc. I have also seen some hotels and office buildings converted to mini-storage. Good luck!
This is an interesting topic. Never thought about this. Anyone doing this with any success?
Hi Gang - We are doing this successfully, and teaching it to our subscribers:
- Yes they can and are being converted, although the "guestimates" given above in this thread aren't even close to the actual price. However, neither are the rents that some have posted as well - We're achieving a significantly higher ROI than the opinions listed Above. As a matter of fact, Some folks are giving away the farm...
- We purchase the Containers for $1,200 - $3,500 - Modifications can cost an additional $2,000 depending upon how many walls and rollup doors we request. However, the rents we generate are in the $1-$1.20/sf/month range, not $110 for an entire container!
- We have been involved in a few of these developments ourselves, and we teach an entire module at our Self Storage Academy on how to do this from A to Z: www.SelfStorageAcademy.com. I have done feasibilities and consulted on several others throughout the country for our students.
- It's EXTREMELY popular near port cities where the shipping is cheap - usually $350 to have it delivered in town, as much as $1,500 to have it delivered a significant distance.
- Zoning usually isn't an issue, and we have been successful getting a variance in those areas in which it isn't currently permissible.
- Property taxes don't apply as long as you don't affix them to the ground, but then it's more difficult to secure a Conventional or SBA loan (double edged sword)
- However, you can lease or get a business equipment loan much easier - both options presents their own unique pros and cons.
- At the end of the Day, another way to get into Rental Real Estate business without tenants, toilets, trash, or Property Taxes!
THAT'S Why we love this business Model!
Scott, my biggest hang up is knowing county/city rules. How do I go about learning what types of property I can do this on? Little rules such as keeping the containers 5 ft from the property line for fire code.
"However, the rents we generate are in the $1-$1.20/sf/month range". This is better than a lot of apartments.
Joshua my Dear Boy!
That's no hang up....
One trip to the county website will tell you the zoning on any parcel, and it's permitted use.
Once we have the zoning designation on the subject parcel, we will then place a call, as a matter of protocol, to the zoning/assessor's office and let them know what our plans are, to further clarify.
Don't let a simple piece of public information stop you from moving forward.
To you success,
From Jon Klaus:
"However, the rents we generate are in the $1-$1.20/sf/month range". This is better than a lot of apartments.
Yes John, the National Average rental rate per sf for apartments in the United States is $1.02/sf/mo (National Apartment Association)
The National Average rental rate per sf for Self Storage in the United States is $1.12/sf/mo (National Self Storage Association).
Simply Beautiful.............
Hi guys, sorry to bump an old thread, but I've got some great info for you.
Shipping container based storage facilities are big money makers. If you do the math and can get the financing they are BETTER than SFR home rentals... Here is a relevant blog post that discusses more details on starting a shipping container storage facility along with 100% financing.
@Scott Meyers Your site & conference are very interesting, I'm going to email you to discuss.
@Joshua Chapin did you end up developing a container storage site?
Any new developments with this concept? Any direction or management software for self storage ? I have multiple sites in Louisiana that I am looking to develop as a way of warehousing land.