Anyone own a self storage facility?
 

Learn me up. I'm working to vet a proposal. I don't know much about them, but they would seem to be gold mines if diligently kept-up and well-run. The biggest drawback I can come up with is that in many markets, this would seem to be a commodity with way too much market saturation - but the right timing and location can mitigate that risk substantially. I'd like to hear some experiences from the Pelicans, if any of you own or have owned one of these.

After getting one of these up to capacity and expanding out the maximum space on a given site, what is the next step? Another facility in another city? Apply the cash flow to a new venture? What happens when highest/best use is no longer self-storage - what kind of exit strategy is employed to convert the property? What are the usual replacements for the storage facility? Are the old units salvageable at all for another site?

Biggest problem I know of with them is losers not paying and you have to go lock up their unit and tell them they either pay or you keep the stuff. then say twice a year you have a garage sale and sell anything good. Rest goes in a dumpster. Make sure you put a lock on the door that only you have the key to and when someone goes deadbeat on you just lock it up. No hassle that way. Cant be soft hearted about this.

I know someone who built and runs a few in California. I think he does quite well. I don't know much of the details, but it seems he goes into dense areas where land is relatively expensive, but builds in spots that are generally unusable. He has one that is literally under a freeway onramp.

His are full on block construction buildings. They don't seem to me they could be salvageable for use at another site. Maybe could reuse the doors and some other small things.

i've been to several storage unit auctions. from what i've seen is you cut the lock then put your own lock on it. Another thing to look out for is the deadbeats. they're not a good idea for storage units, ie. imagine a 10' X 40' full of *****. it would take weeks to make it usable for another customer. :eek:
but the auctions usaully are pretty good. 7 sets of chrome rims, and a beer fridge for $200

The few places that I've rent from require that you use a lock which they provide or a lock to their spec for which they keep one key and the renter gets a key. The doors can accept two locks. So if the renter doesn't pay, they get a second lock put on the door, and the renter is SOL until they pay up.

I've been thinking about storage places lately with my need for additional storage. My thought was to buy up used shipping containers and line them up side by side. The containers come in various lengths and the longer ones could be partitioned with a 36" door welded on for for folks who don't need a wide opening. If all went to hell the containers can be resold. Permiting will be a problem. Some munis probably wouldn't want a yard of containers, but in an industrial area that might fly.

same here, I wonder how well a 911 will fit into one?

sorry for the hijackhttp://forums.pelicanparts.com/suppo...eys/pirate.gif

A 911 can fit just fine...interior width almost 8 feet.

Spec.

Specifications of 40' Dry Container External Width 2,440mm 8ft
External Height 2,590mm 8 ft 6 in
Interior Width 2,350 mm 7ft 8.5 in
Interior Height 2,392 mm 7 ft 10.2 in
Interior Length 12,032 mm 39 ft 5.7 in
Door Width 2,338 mm 92.1 in
Door Height 2,280 mm 89.7 in


Used containers are dirt cheap compared to steel buildings. I've bought plenty of steel prefab buildings and site erected buildings, and they are not cheap. So any pull out plan that involves erected buildings is not going to be a clean pull out.

My Dad owns some storage blds. Says its alot better than when he had rent houses. His are basically just metal buildings. I'm pretty sure his are not full, but he says he still gets a nice return on his investment for very little time involved. He has the occational deadbeat but your usually not talking about alot of money.

He has one guy from out of town that has been paying for over 15 yrs that Dad has never seen. There was some damage to his door that Dad fixed, and while he was repairing the door took a peak inside. There was nothing in there but a freezer. I told him that's probably were the guy keeps his wife. Dad said the guy is always on time and never complains about rate increases. I'm going to inherit this place one day.

CAN be winners so long as you don't get mired in land engineering bull****.

Was close on one a few years ago and by our rough math we could pay the bills w/ 60% occupancy. This was when land in our area was at a serious premium.

One similar concept that is a big LOSER in our area is contractor shops. Ya know the kind with big roll up doors and a bathroom? Waaay too dependant on local economy.

One last thought on this; the area i live in is about to get its first enclosed/hvac'd storage building and this MAY have a big impact. Not sure how the unit cost works out but when you build UP it may turn out to be competitive with spread out pole barns. We are rural/semi rural.

I rarely see self-storage facilities up for sale. That might give hints about profitability.

I wouldn't be surprised if many states had laws on storage facilities similar to apartments: the renter can jerk around the owner for a long time and being evicted is difficult, expensive, slow, and almost impossible for the landlord to do correctly.

My grandfather owns one, it's always full. He has a variety of sizes, from a large single car garage to a closet. It's a steel building, most with roll-up doors. The only real maintenance required is when a door doesn't operate correctly. If tenants don't pay, he double locks the unit. After a certain time period of non-payment the property inside becomes his, and what he doesn't keep he sells.

It works out well, because it's a good revenue stream and gives him a place to keep his cars and extra stuff. There's even a tenant that operates a small woodshop out of one of the larger units. If you can build in an area where there aren't a surplus of units, it's a pretty solid investment.

Time to open the freezer. Have seen a few stories on investigation tv shows where this exact scenerio existed. Why pay so much more in rent than the freezer is worth? Fifteen years worth and never met him? It must be full of body parts or cash. ;)

Is a storage rental considered private property or can your dad snoop to his hearts content?

There must be money to be made at they are going up all over. But talk about a blight on the landscape. Ugly!

I know three women who pay what would amount to a decent apartment's rent every month for storage. One closed a business years ago and the other two broke up term relationships. None of them dealing with reality.

Why wouldn't you have a credit card auto-bill every month?

Sure, the credit card can be declined, but if you run it at the beginning of the month, you will most likely never be more than 30 days out on a deadbeat unit. details are in the contract: your stuff will be liquidated 2 weeks after failure to pay.

The deadbeats are not a significant issue. Two units have been locked up in two years. Both paid up before forfeiting property.

Shaun, many customers are already on direct debit.

Circumstances and demographics make this really attractive. Am trying to look from all angles though.

Because many customers (me for one) will refuse this. I'm not giving someone direct, unrestricted access to my bank account. Wrong. I'll pay my bill in full every month the old fashioned way or I'll go somewhere that I can.

And WTF is with these self-storage places refusing to disclose their prices? It's like the sleazy car dealership ads you see in the Sunday paper that just say "CALL". Like anyone's going to do that and listen to a 20-minute sales speil. Lame. Put the bloody prices on the sign outside will ya?

Yeah, that's how I thought it worked, or at least should.

Sounds like a gold mine alright, and just think of how much personal parts storage you'll have!:D

Its amazing how many people will pay a hundred a month to store ten dollar sofas!

Yes, but one has to consider the time and energy one would need to expend to buy a replacement sofa!

I have two storage units for my business; what I'm storing -- at least if sold at something like an auction -- would bring nothing more than a few months worth of the rent I pay.

If I threw out what I had in the units, I would probably "save money" on paper, but if I had to go out and buy new stuff when I needed it, the time it would take to shop and the out-of-pocket expenses buying the items I'm storing, would end up costing me more.

That said, one does have to be careful that one doesn't end up paying more in storage fees than it's worth.

I'd expect that "inefficient storage" does happen in the business quite often -- which is good for the storage company owners (and brings this topic back to the original subject).

Yeah, but they Paid more for the sofa than $10, and still think it is worth what they paid.

you could advertise in divorce lawyer offices. I'm sure plenty of stuff has to be stored when one person has to leave the main residence.

Not my gig but I'd be involved. And yes, my storage needs would be solved. :)

Dad's the type that as long as the guy keeps paying, its none of his buisness what he puts in there.

Dad also has had very little trouble with deadbeats. One guy quit paying after renting for10 yrs or so and we opened the unit up and it was full of 69-70 mustang parts. Big block heads, transmissions, ect. Many NOS parts. The first Item I sold on ebay was a shacker air cleaner and scoop, got $2000.

Usually it just junk though. Dad knows a junk guy that he generally just calls and the deal is the guy has to take everything and clean up. But he takes the choice stuff first.

Im not sure how long he has to wait before he can take the stuff, but here it is not like renting an apartment. He has several of these on 12 acres so he usually just puts his lock on a unit and gives them a chance to pay.

Our company was renting a unit in Seattle that I cleaned out more than a year ago. They had people living in some of them, not sure it's legal. Plus they weren't heated. Shurgard Storage was a client a few years ago when I was doing staffing and consulting. They had a profitable model but all kinds of accounting, IT and reporting issues. Basically had not grown the support infrastructure as the business grew and were over there head with their international subs. Sold out before the SEC came down hard on them.

i read a newspaper awhile back that said the units here in the neighborhood are at 99% capacity. for awhile you couldnt find a storage unit or a safety deposit box...i think it relaxed a bit.

my wife and i wanted to do this also. land is big bucks here.

Funny, I was just thinking about this about 3 days ago. I'm not in a position to get into it right now, but it seemed like a good option.

I have never understood storage facilities. If you need to store it, you probably don't need it. Unless it's being used as overflow between moves or something.

BTW, that freezer is a red flag. Your dad may want to consult with an attorney to cover his butt. May be nothing at all, or may be another Dahmer.....

My dad has owns one that he developed a few years ago. It was developed in phases, with space for three. The trick is to remember that it is not a good idea to cram as much storage as possible on the site, cost be damned. There are some back of the envelope calculations to figure out that your "equilibrium" occupancy is...

Figure out what the average length of stay is (say 12 months). That means that 1/12th of your occupants move out every month.

That means that if you average 50 move-ins per month, you will be at equilibrium when you have 50 move-outs per month, which is 1/12th of 600 total units.

I also think these centers would be gold mines.

I've heard that the people in Minnesota hold onto all of thier crap... it's true these storage centers are everywhere here.

There is a new chain of them in town. They are brand new, very, very nice and worth the extra money to store stuff there. I know, I just got married and I have two spaces rented... $200 a month (and that's at a special rate).

I would stongly encourage you to look into one in your area (or close to your area). The ones recently opened in Minnesota are all multi-level, climate controlled and carpeted.

http://www.thelockup.com/

I'm very impressed with them.

Joe Mama

I think the storage, trailer, and truck rental guys have a good gig. (i.e. U-Haul)

You move? They sell you everything you need, even storage space if you need it.

My friend used to pay $400 per month when he downsized. $4,800 per year. He had a new two car garage built and for $14,000 they built a basement. Paid back in three years. And all his stuff is accessible now.

They are definately profitable; however the biggest cost factor is the Real Estate! Location is not generally a challenge with these types of facilities, as long as good access is provided for trucks and loading/unloading stuff.

I have a buddy here in BC thats in the storage business and he runs a couple storage yards. He used to be involved in several businesses, then got into this and stopped all others. Now he has his whole family working the business. He calls himself "Big Steel Box"; those in BC would likely know the company.

The real estate/ location is likely one of the more expensive things; so you buy some land on the outskirts of town and build a beautiful multi-million dollar storage facility; then some years later the land becomes more valuable, as the natural process of development occurs and you're stuck with the current use. Therefore, building or installing something that can be "Moved" is a smart idea. Once the land value rises, you can move the facility out to the out skirts again and put the land to a better use. Seems smart to me? That's what my buddy is doing.

I've noticed many have residences built above or behind the offices? Probably a good idea for the manager to live on site?

My two cents fwiw,
Cheers

Oh, and I think Highway exposure to your sign/location is another must.

I have had one for 3 years. http://www.rappstorage.com/
They work...

I wish I had outside storage though, parking for RV, etc. That would be what I would look for next time.
This one is 3 years old and at 80% and I don't advertise, work it at all...it was an investment with a friend and he has his office there and deals with the customers. Most of it is automated though.
PM me and I can give you all the details on them, etc.

Jim

My father-in-law owns a couple of storage facilities and he claims they're like a license to print money. They're almost always full and with all the folks bailing on their mortgages & moving to smaller condos, apts., etc, storage needs will most likely increase in the near future. One thing to consider might be a controlled-temperature unit for things such as wine. A lot of collectors don't have adequate facilities for proper storage at home.

He started building another facility recently and a big national chain came in and bought the whole works before it was even finished for a handsome profit.

First, I apologize to the thread starter because I have no useful information to share; however, I do have a funny story concerning these storage buildings... Back in the late 80's while I was in the Navy and stationed in Charleston, SC, I had some friends (shipmates) who actually lived in one of these. I had heard stories for the longest time and I went to see this for myself. I could not believe what these guys had done. Seriously, and I am not embellishing this one iota, they had built a two story apartment inside their rental storage unit. The lower floor was the lounging area with the couch and television (you could not stand up on the first floor) whereas the second floor was the sleeping quarters (it contained their beds). Their 'shore power' (you Navy veterans will be familar with this term) came from the outside receptacle at the storage facility with a totally unsafe number of things plugged in. These creative and thrifty guys watched the dumpsters and construction sites for used materials. The owner said that she did not want to know what was going on... just in case these guys got caught. She did slip them a gate key so that they could enter and exit after hours. I wish that I would have taken a picture because words just do not do justice to what these guys had built.

Pretty slick when you can fit an operating meth lab in a 10 x 12 unit.
Happened in the unit near mine -

His rent is $80 a month, and the locker is better than a shelter, he said.

``I didn't want to get sick no more,'' he said, claiming a skin infection had been working its way through the homeless shelter where he previously stayed. ``Then they want to steal your shoes.''

http://www.lacrossetribune.com/articles/2008/01/05/newsupdate/08storage.txt

I know at least one company that builds the storage building in a way that it can be relatively easily converted to office space when the area gets built out. $/sq.ft. are very high. No tenants rights.