Self Storage - startup
Hello all those with self storage investments.
I'm writing to get some feedback on a recent investment opportunity in the self storage space in Michigan. I am looking to startup a family business with my dad and sister. We plan to start with two buildings until full and add more after that. The property has been purchased and no financing would be needed for this initial startup. I have a few questions:
1) is starting this small on storage units too conservative? 2 buildings with about 30 units of varying sizes in each.
2) 3 stakeholders - any feedback for dividing tasks amongst 3 individuals and then ultimately dividing profits. Do you pay an investor based on equity invested and divide based on share or if one person does the maintenance, website, booking keeping, etc, do you "pay" that person for the worth of the function and treat it as a business expense?
3) security for a small town storage - if the liability is with the customer, but not having a fence or security system or lighting, would it deter people from renting or does the cost of installing tend to pay itself off?
Sorry, lots to learn. Just trying to do a bit of research.
Thanks,
Justin
Hi Justin
I would sign up for Scott Meyers self storage academy. I attended it and found it to be a tremendous value. You may not know what you don't know. Scott will save you a lot of time, money, and frustration. Good luck.
Hi Justin! I have a small mini storage just north of Macomb County, similar size. The biggest question for me is how much are you going to automate it. If you are installing gates and security, be sure to use keypads rather than RFID cards as this will allow you to rent units by phone (assuming you have internet capabilities tied into your gate system. If you can automate it as well as using some internet capabilities for lease applications and agreements, you can greatly minimize the need for someone being onsite full time. Obviously the need will be greater until you are fully leased out, but afterwards the need begins to drop off more and more. My property is pretty well seasoned and I only need to visit once every few weeks and also monitor the property via security cameras from home.
Originally posted by @Mark Byrge:
Hi Justin! I have a small mini storage just north of Macomb County, similar size. The biggest question for me is how much are you going to automate it. If you are installing gates and security, be sure to use keypads rather than RFID cards as this will allow you to rent units by phone (assuming you have internet capabilities tied into your gate system. If you can automate it as well as using some internet capabilities for lease applications and agreements, you can greatly minimize the need for someone being onsite full time. Obviously the need will be greater until you are fully leased out, but afterwards the need begins to drop off more and more. My property is pretty well seasoned and I only need to visit once every few weeks and also monitor the property via security cameras from home.
Mark, just curious, what did this cost you roughly to have installed and monthly?
The software was only a few hundred dollars and the only monthly fee I have is my internet connection. I just remote connect to the desktop at the mini storage through a VPN to access the software. My software is fairly antiquated as its the original software from when the property was built back in 2002, but still does the job nicely!
@Mark Byrge How about the security and gate system with internet access?
@Mark Byrge did you build or did you buy an already established storage complex. If you built did you do all the automation upfront? Or did you wait a few years and pay for it with profits from renters?
My plan was to slowly build as we fill up the units, but would love to get your thoughts on that.
I bought one that was already established. I agree with your thoughts, just know that you can charge more of a premium with security systems in place. Additionally you will end up saving yourself money everytime you don't have to drive to the facility of you can do it from home. At least make the provisions for upgrades during construction. (I.e. Running cables/power lines underground before putting down your drive surface) This will allow you to add later without having to tear up your drive and will expedite installation at a later date.
Hi Justin. I just opened a new facility in Ohio this past week. It is actually a joint venture with my two brothers. We are starting off with 48 units, and have 10 acres of C-2 commercial ground that we are looking to develop and expand in the very near future. Starting off we have 24 - 10x10 & 24 - 10x20's. The facility is in a heavy vacation / camping / 2nd home area along the Lake Erie shoreline. We decided to go with Easy Storage Solutions for our management software ($40/month). This software allows customers to rent units through our website, sign the lease agreement, and pay by credit card. Early on in the planning stages, we decided to take advantage of everything google has to offer. Google Docs and Google Voice has been extremely valuable. The app Scanbot has been a lifesaver as all paper documents are scanned and uploaded immediately to the drive. Where are you in the process? Are you still planning, currently building, or is the facility in operation?
Jordan - thank you this is great! We are still planning but really do need to pull the trigger here shortly. We are starting much smaller scale but I really like the idea of that software. We will need to figure out how many units we need before it's worth getting the software but definitely nice as that was a concern of mine going in for online payment options. We are currently getting quotes and pricing out each unit to build. So hopefully soon!
Does that management software link to where you do your accounting or does it just link to your bank and become a document repository? I'll research more but figured I'd ask how you utilize it.
Where is your main source of advertising?