Why You Should Invest in Self Storage: A Lucrative Opportunity
If you want to invest in self-storage, you want something that can yield impressive results with minimum hassle.
Investing in self-storage in one such area that's proven consistently lucrative in the market, with attractive returns among many other benefits.
Self-storage is something utilized by all types of customers, from business to personal, for reasons including moving house, traveling, moving office, downsizing, and more. These are all scenarios that aren't going to stop happening over the years making it a relatively stable investment.
Why Self-Storage is a Smart Investment. The benefits of investing in self-storage
There are many reasons to invest in self-storage. This includes:
Demand is stable
The reasons people need self-storage include downsizing or renovating homes, going traveling or storing additional business items.
These are all scenarios that aren't going to stop happening even in years to come, making it a stable demand for both short and long-term storage space.
It’s recession-resistant
It's considered a 'recession-resistant' opportunity for investment as it's an area that might profit from an economic downturn.
In times of financial hardship, people might need to downsize their homes and be on the lookout for affordable storage solutions. Even in bad economies, there is a high demand for storage space, making the self-storage industry just as strong when other business models may be struggling.
It has a wide demographic
Customers for self-storage facilities are one of the broadest on the market. There's no real age range and they cater to personal and business users, both looking for short-term and long-term uses. The self-storage market serves a wide range of consumers.
The operational costs aren't too high
Some real estate investments require high levels of outgoings, with lots of ongoing maintenance required and frequent interaction with the tenants. When you invest in self-storage units, it doesn't require this same level of engagement.
You can expect a consistent cash flow
When looking for a consistent and reliable way of bringing in money, storage unit investment is an effortless choice.
Those renting a storage unit will pay the same amount each month and multiple people are paying this so you're not just relying on one tenant who can move out.
You can scale up
If you want a serious business model that can be scaled up, self-storage is a great option. This is because you can start with a smaller facility and then expand either by building additional units onto your current property or acquiring new branches. This is something that can be done slowly, minimizing risk while also expanding.
You can diversify your revenue streams
As well as financing options such as offering the storage units themselves, you can diversify your revenue stream with additional services. This includes offering moving supplies such as boxes and bubble wrap or partnering with a removal firm to offer moving services.
Maximizing Profits in the Self-Storage Industry
When it comes to maximizing your profits in the self-storage industry, you need to think tactically about what you're doing and how you operate.
There are a lot of ways you can make money, it’s about doing what you can to streamline and optimize what’s there. You can maximize your profits by:
Being strategic with your pricing
Regularly review the prices you charge, changing these to reflect the market demand, location, and what your competitors offer.
You don't want to be too cheap, but you don't want to price out your customers either. It's also a good idea to offer financial incentives such as joining offers or discounts for long-term customers.
Have a solid marketing plan
Marketing is the crux of your business as it's what will get you seen by those that matter most. Look into how you can optimize your marketing efforts with things such as a website, an SEO strategy, and a social media presence.
Consider if you want print or digital advertising (or both) and how this will be distributed. You want tactics that will require a smaller cost but with a better ROI.
Deliver exceptional customer experience
There are many ways you can offer a fantastic customer experience, from offering loyalty programs and referral bonuses to keeping regular contact through newsletters and messages.
When customers come into your self-storage, make sure the customer service offered excels from start to finish. You want all of your clients to feel special, and listened to, and if they have any queries that they’re dealt with quickly.
Regulate your performance and don't be afraid to try new methods
Having KPIs is vital for businesses to track success. Ensure you regularly monitor where you're at finances and implement new strategies or tactics if you're not hitting your goals.
This can ensure your profits are maximized and money isn’t wasted unnecessarily.
How to Make Money with Self-Storage
In essence, storage units make money by renting units to customers who need them. The pricing can differ depending on factors like the size of the unit and how long it's needed for.
Some ways you can make money from your self-storage units include:
Keeping your occupancy rates as high as possible
Implementing a dynamic pricing structure
Diversifying the types of units you offer to cater to as broad of a customer base as possible Offering discounts to incentivize long-term signups
Offering additional services to customers such as packing supplies
Offering insurance options for clients to keep their belongings protected
Implementing late fees and penalties for those who don't pay on time to reduce late payments
Upselling where possible so they pay more rent
Focusing on upgrading your facilities to improve the customer experience and increase both new sign-ups and the length of existing ones
Partnering with local businesses to make more money. This could include local insurance firms and removal companies
Having strong marketing so you can attract new customers easily as well as keep your existing ones
Key Considerations for Investing in Self-Storage
As the points above show, investing in self-storage can be a highly profitable venture, but you need to be prepared.
As with any investment, there are going to be certain things to consider before you commit so you can make a fully informed decision about what will be the most successful.
The demand for self-storage in the area you want to invest
You need to consider the area you want to add a self-storage unit and whether or not the demand is there. If there are no storage units presently, is this because they're not needed?
If there are already several units, will your addition saturate the market and not get enough customers? You want to find the right balance.
The design of your unit
While the premise of self-storage units is simple, you want them to be carefully designed to maximize space and impress your customers.
Ensure access is convenient, it's well sign-posted and there are adequate security measures to keep it safe. People have valuable and expensive items in their units so need to know they’re being looked after.
How much capital do you need to start up
Take a look at the upfront costs you'll need for your self-storage facility, including materials, the land, and any construction or renovation costs.
You’ll also need to bear in mind any additional costs required going forward and what you’ll need to make each month to bring in a profit or at the very least, break even.
Most businesses don’t make a profit in the first year so keep this in mind!
How your self-storage unit will run
Think about how you can utilize technology for a more well-run and modern storage unit, how you will staff your own mixed use storage unit, and any legalities you'll need to be aware of.
Is Self Storage a Lucrative Investment? Can you grow your Wealth with Self Storage Investments?
With the above in mind, self-storage investments are a lucrative choice when looking to expand your real estate portfolio. With low risk and high returns, they’re much more practical than other investments in the same field.
It’s important to keep in mind your costs and have realistic projections and targets to aim for. With a clear plan, goals, and the right level of market research behind you, a self-storage investment can be one of the best things you’ll ever do.
Ensure you go into it fully informed about all the aspects involved and have an idea of your target audience and how you’ll reach them.
Then it’s just down to you to get the design and build sorted and you can be on your way to an incredible investment opportunity.
If you’re looking to have your self-storage unit built, we're here to help. With a range of construction services ideal for building your multi-level self-storage from the ground up, we can bring your project to life.
From engineering and design to fabrication and installation, we can take care of everything, leaving you to just focus on building a lucrative self-storage business.
If you want to invest in self-storage and would like to find out more about what we can do to help you build your self-storage facility, please get in touch with us today!