BiggerPockets

How good are storage units? Are they a good investment? Does anyone have any storage units? How many units do you have? What do you get for each unit per day? Any thoughts?

Brian

I just did a bit of searching and found a resource that should prove to be helpful. Let me know if you find your answer there. Please share with us any knowledge that you pick up!

I am an owner of two storage properties in California. As with most any other real estate venture, location is key. Based on general surveys, roughly 1/3 of your tenants come in from drive-by visibility, another 1/3 come from advertising (YP and Internet), and the last 1/3 come in from referrals from existing clients and nearby competitors which are full.

Debt is readily available for these assets, and SBA financing is also available (as of 10/2010). They tend to perform best in solid B markets. Retail-type locations are best as they are typically highly visible. Converted warehouse buildings can also do quite well if located in densely populated areas. Cash on cash returns are generally in the 10-12% range.

I just stumbled on an opportunity with one, I have some experience in SFR's but i'm looking for some info on what to look for in one.

The guy I talked to is willing to do an owner finance, he is working up some numbers for me to look at.

I agree with Bobby. From what I have learned, the business is dependent on location. The most successful investors I have heard in this niche usually tend to be in smaller areas where there is less competition.

I have also heard it is much easier to obtain financing in this niche as compared to others.

The upside to the business is that you are not dealing with people (as they do not reside in your units). Instead, you are dealing with items that are stored at your facility.

There are pros and cons to everything. Hope that helps! :D

I believe you still deal plenty with people. After all, people are the ones that pay the rent, not the items stored. :wink:

And there are still maintenance calls. Maybe not clogged toilets or leaking faucets (you'd hope), but shortly after we rented a storage unit for our business, I needed them to shave the bottom of the door because it was binding on the floor. It's ALWAYS something.

So I watch the shows on TV where they bid on the rental storage units.

So if a tenant owes 200 in storage rent and their box is auctioned off for say 400 does the storage place keep the extra 200 or after your auction fees etc. have to give the remaining money to the tenant who didn't pay??

Hi Mitch- Lots of reasons for turnaround. I had a great list of 10 and tried to post it. It was during the time the site was being re-done. I'll try again.
1. No website
2. Began advertising on Craigs list
3. Re-painted in red, white and blue.
4. Re-did landscaping so daily traffic of 73,000 cars could actually SEE the facility.
5. Increased the inside valet, a/c area for autos, golf carts etc.
6. Updated the software.
7. Re-did all the surveillance cameras and hours of access.
8. Offered special Lottery for Cancun vacation. 1 entry just to come see the facility and more , based on size of unit rented.
9. Joined Chamber and attend breakfasts.
10. Traded space for semi-annual booth in large art show at factory outlets.

I also hired new staff, but actually kept one of the previous 3 owners as mgr and my personal asst.

I've actually found you don't deal with many people. We changed the payment method to automatic withdrawal from clients checking acct. Many pay in advance and aren't even around. Definitely less people to deal with than apt building-and VERY little maintenance. A/c units have been the worst.

Joel- We've never sold a units' inventory for more than was owed on unit.Rich

I own 1,000 Units in 16 locations around canyon Lake
[LINK REMOVED]
Started in rural are ( and stayed there...hate city regulations)
Flipped houses for cash...bought Storage units for cash flow. Prices vary from location to type of storage offered. Climate controlled, boat storage? Mini storage? concrete foor dirt floor (boats) open storage, Security? onsite mgr?

--Mitch Stephen--

Thanks Rich. I know a self-storage "guru" out there who charges about $1,000 for pretty much what you just provided us free of charge! Thanks again.