Anyone own a self storage facility?

[dtw]

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?

[porsche4life]

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.

[the]

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.

[Arizona_928]

Originally Posted by porsche4life

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'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.
but the auctions usaully are pretty good. 7 sets of chrome rims, and a beer fridge for $200

[MotoSook]

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.

[Arizona_928]

Originally Posted by Souk

My thought was to buy up used shipping containers.

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

sorry for the hijack

[MotoSook]

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.

[dmcummins]

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.

[berettafan]

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.

[turbo6bar]

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

[legion]

Originally Posted by porsche4life

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 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.

[onewhippedpuppy]

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.

[TerryH]

Originally Posted by dmcummins

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.

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?

[The Gaijin]

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.

[Shaun @ Tru6]

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.

[dtw]

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.

[Porsche-O-Phile]

Originally Posted by Shaun 84 Targa

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

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?

[Shaun @ Tru6]

Originally Posted by dtw

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.

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!

[cgarr]

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

[competentone]

Originally Posted by cgarr

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).