Buy sheds from Costco/Home Depot/etc and rent them out?

Question

Random idea.  Has anyone tried buying sheds from Costco/Home Depot/etc and then renting them out as storage units?

Scott Meyers · Answer

Adrian,

Yes, there are many investors/developers already doing this.

No, buying a "shed" at Home Depot is not the way to accomplish this.

Yes, the zoning for the land has to be zoned for Mobile Storage - so Check with the Zoning Board before moving forward.

The manufacturers of Traditional Self-Storage Buildings (Trachte, Betco, Janus, Mako, USC, etc.) also build portable units that can be delivered already assembled, or erected on-site.  Then they are moved into location with a forklift.

However, we are mostly using Converted Shipping Containers for a fraction of the cost, and they are built to last much longer than your Home Depot "shed"

Depending upon the type of portable units you choose, the cost per square foot will vary Greatly, and delivery charges.  However, since it's mobile, you can rent them out, and develop a Self-Storage Facility WITHOUT having to pay property Taxes - Because the units are mobile, not "permanent improvements"!

How do you like them apples?

We helped one of our students with a project built entirely with shipping containers, but you can substitute any type of mobile storage unit you would like into this business model:  check it out:    www.willowcreekselfstorage.com

The revenue generated at this facility vs. the cost/sf of acquisition would make your head spin!

So yes Adrian, it's a FABULOUS Idea, and people are already making millions following this model in Real Estate's Cash Cow King - Self Storage!

Happy Investing!

Scott Meyers · Answer

To all,

You insure the structure(s), not the contents, that's up to them to decide whether to insure or not.   We offer renter's insurance to our customers as a reseller through one of the larger 3rd party renter's insurance providers, and we receive a 10% affiliate commission on the policy.

Yes, Double Dipping is great - and ZERO Liability!

Cheers,

Adrian Chu · Answer

The idea was to have them in a central location.  I.e. a fenced yard in the city.

Roy N. · Answer

@Adrian Chu

Where you thinking about renting them at a central location or delivering them to an individual's house?

In the first instance, it would probably me more cost effective to build self-storage units.

In the latter case, what would be your plan when the person no longer wishes to rent the unit?  Most of those small sheds sold as the big box stores are not designed to moved once into their forevermore spot and not shifted frequently - they might not stand-up well.

An alternative is to purchase the sheds and finance them to homeowner ... but I would think the big-box stores are doing this already.

Lane Kawaoka · Answer

That's a really innovative idea.

Legal issues/insurance came to mind. If someone is willing to pay money to store items in there then someone will be willing to break in. At that point who is liable? Might not be for everyone.

I had a large out door closet that I rented out for 40 dollars a month which was cheaper to the alternative at the local storage place for 80 plus a minimum 6 month stay etc. In hind sight it might have not been worth it since I was taking a risk due to fire or shady things happening.

Who the heck rents a random shed in some other guys yard... sketchy folks do.

David Chwaszczewski · Answer

@Adrian Chu

You may want to call around to try to get insurance for the "Sheds".  I would think that may be the hardest part next to zoning.  Keep us posted if you do go this route.  Good Luck!

Roy N. · Answer

Then you will need the appropriate zoning.  Many municipalities preclude this in residential areas by not allowing a garage or storage shed on a lot without a residence (house).

Jassem A. · Answer

Another option might be to lease them a small lot on your property for them to set up their own storage shed.  Not sure of the legality of that though.

Michelle White · Answer

Interesting idea, Adrian!

@Roy N.

Good points you make. Plus, if delivered to the customer, there will be a "break even" point, where they have now paid the  purchase price. Maybe you can charge them less interest than if they financed through the big box company.

Richard C. · Answer

The only advantage I can see to individual sheds as opposed to self storage steel and masonry buildings is that you can scale slowly, by buying new sheds only as you need them.

In every other way, cheap wooden sheds are going to be inferior to a storage building, and that will probably be reflected in the rent you can charge.

Buy sheds from Costco/Home Depot/etc and rent them out?

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