10 TIPS FOR THE SELF STORAGE ROOKIE
Self Storage can be a great investment, but like any investment it pays to invest time before money, and do your research first.
If you’re new to this type of investment, you most certainly should talk to some industry experts to get the best advice, but here are our top 10 tips to remember before launching into this brave new world.
- Location is everything: like any other form of property investment, a Self Storage facility needs to be in a good location so people can see you and find you. If you’re tucked out of the way, you won’t be renting too many units – and if you’re not renting, you’re not getting a return on your investment.
- Start with a show: not the movies, or something at the Opera House, but a trade show! Talk to people, find out what the trends are, see what’s new. The Australian industry is not yet the size of the Self Storage business in the US, but there are trade shows specific to the industry. Find out when the next one is on and be there.
- Do your figures: if you are borrowing money to buy or build a Self Storage facility, you will need to crunch the numbers to know if you are going to earn enough from rent to pay all your outgoings – including the loan. Don’t be fooled into thinking that owning such a facility is a licence to print money. It can be, but not without a lot of hard work. Use specialist Self Storage management software, it will save you money.
- One size doesn’t fit all: if you’re building or buying a facility, remember that people have different amounts of ‘stuff’ and don’t want to pay for space they won’t use. Try to build or buy a facility with a range of different sized units to appeal to different types of renters.
- Don’t forget about maintenance: you won’t have people living in your units but that doesn’t mean they don’t need regular maintenance. You will need to budget for a maintenance schedule that keeps your facility in good repair and looking attractive, to keep the clients coming.
- It pays to advertise: just because you have built it or bought it, doesn’t mean they will come! You will need good signage and a marketing plan and budget, to keep your property in the public’s eye because the nature of Self Storage is – mainly – short-term renters. You need a constant flow. Use modern technology, build a great website with a box shop, and online move-ins, and make use of Facebook advertising and Google AdWords. Companies like R6 Web Design specialise in Self Storage web design and marketing, and they can give good advice.
- Work out who your clients are: while you may think of Self Storage as a place where people store personal items, there are other possibilities – tradesmen who need to store tools, businesses who want to store stock or archive documents, townhouse residents who need space to store ‘toys’ like boats and caravans. Make sure they all know what you have to offer.
- Check what the competition is doing: This is not a once-off instruction! Know what they are doing so you can decide if it will work for you to do something similar, or you need to take a different approach. Keep checking.
- Make sure you are legal: if you are building a new Self Storage facility, make sure you have checked and double-checked on issues such as zoning and building requirements – and then check again. Document every conversation. It can be very expensive if you get something wrong.
- Protect yourself: if you are buying an existing Self Storage facility, remember it is like buying a house. Buyer beware! Look beyond the ‘window dressing’ that may have been done to help the sale go through. Look for things that will cost big money if they need to be repaired or replaced. Think air conditioning, bathroom facilities, the concrete and the fire sprinkler system, as well as the state of the roof and the unit doors.
Investing in a Self Storage facility can be ‘as safe as houses’, providing you do your due diligence first, but there are traps for the unprepared. Use your common sense and look before you leap. Good luck!