Now is a great time to get started in the self storage business! Here are just seven reasons why:
1 For the last 4 years new self storage construction has been at a stand still compared to the boom years 2000-2005 where at least 2000 new facilities were added each year with a peak of 3,665 facilities added in 2005. We saw new construction bottom out at 496 new facilities in 2009. The significant drop in construction has permitted the demand to slowly outpace the available self storage units available.
2 The economy has stabilized and is no longer falling. While the economy is not improving as rapidly as we would like many fears such as loosing your job have been eased, leading to more unit rentals. I can personally attest to this. At all three of my facilities very high spring rentals were un expected and exceptional compared to the past several years.
3 I have read several self storage finacial articles since January of this year. They all point out self storage out performed the other real estate business during the past economy down turn and continue to lead in profits. And that profits are starting to increase again. Again I can personally confirm this as I have more renters and have been able to increase my rental rates.
4 While money is always a sticking point for any new business banks are starting to loan money again if you have a solid written business plan and you invest the first 30%. If you meet these qualifications you may want to contact Joseph Weiner at Evolve Bank & Trust. 210-820-2650 or email@example.com And the rates are much better than in the past which of course means more profits for you. Phasing a project is typically a sound requirement for new facilities to reduce the financial start up costs.
5 During the boom days many Towns frowned upon self storage and often required significant design changes requiring a larger investment. Or even worse denied the application. While self storage may still not be the preferred development many Towns are happy to see any new development. I still recommend you are fully prepared with your information and picture guns loaded when you apply.
6 Now you can still get contractors and buildings at reasonable prices. I built one of my facilities in 2005 and had to pay premiums for everything and everything took much longer to get built. Check out www.Betcoinc.com for quality self storage building options and a head start on your planning.
7 Now the internet is more prevalent and there are are more social marketing networks to help you rent up your facility before you complete construction. This takes a lot of work but imagine if you have 50 renters before you open your doors. The average renter pays $100 plus a month at a premium facility and stays for 10 months plus, so thats $50,000 in your pocket! As you can see this must be an important step in your marketing plan. If you have any questions on this email me. MarcGoodin@gmail.com
Now this improved outlook is not a license to build in an area that has to much storage already or in an out of the way location. It is not a license to do a poor design job, not having a clear marketing plan in action or be underfunded. First you need to find a suitable location, typically on a main state road with 20,000 cars a day passing by. Then do your own initial feasibility study before you start spending money. If it is not abundantly clear the location is great and or if you need/want confirmation you can have a feasibility study done by an expert. I recommend Ben Burkhart. 804-598-8742. www.storagestudy.com