As the self-storage industry continues to boom, the opportunities for making money from this sector are increasing as well. Whether you are looking to own storage units or become a reseller of storage unit contents, there is plenty of potential for profitability. Let’s take a closer look at why people use self-storage and how you can make money in this growing industry.
Why People Use Self-Storage
The most common reason why people use self-storage is that they need additional space to store their belongings. Many people opt to rent out a storage unit when they are moving and need a place to temporarily store their belongings while they transition into their new home. Others may have taken on more hobbies or activities that require them to store additional items, such as camping gear, sports equipment, furniture, or even seasonal decorations. In some cases, those who live in urban areas with limited space may choose to rent out a storage unit due to a lack of room in their homes or apartments.
A 10×10-foot storage unit is the most popular choice amongst renters that comes with an average monthly price tag of around $180. According to a survey by StorageUnits.com, 45% of long-term renters admitted that they are spending more on storage fees than the items are worth! And 76% of respondents reported that they could successfully eliminate the need for storage units by simply organizing their homes better.
If you are personally looking to rent out a storage unit, a less expensive option may be renting out space from a homeowner.
How To Make Money With Storage Units
If you are looking to make money in the self-storage industry, there are a few different avenues you can take.
Resell Storage Unit Contents
You can buy storage units at public auctions and then resell the contents for a profit. This requires a lot of research and legwork but can be quite lucrative if you can find a good deal.
How Storage Unit Auctions Work
Storage unit auctions are held when a tenant fails to pay the rent for their storage unit. The facility management then sells off the contents of the storage unit to recoup their losses. You can participate in these auctions by registering with an auction company or attending the auctions yourself, depending on your location and availability.
Storage unit auctions are held across the country and can be found in local newspapers, storage facility websites, or storage auction websites such as storageauctions.com.
If you’ve seen “Storage Wars“, you know that the goods being sold in storage units can range from everyday household items to collectible antiques to pure garbage. Unfortunately, you can only get a glimpse of the front of the storage unit before bidding and buying. There is no opportunity to explore its contents before purchase.
Where To Resell Unit Contents
After you’ve won a storage unit at auction, the next step is to resell the contents. You can try your luck selling items online via various marketplaces or you can take them to a local flea market or consignment shop. Or you could have a rummage sale or ask a liquidation store if they’d want to resell for you.
Own Storage Units
If you have the resources to invest in property and would like to own your own storage units, this can be a great way to generate passive income. You can rent out storage units on monthly or yearly contracts and receive a steady income while you manage the facility.
You make money by owning your own self-storage facility and renting out individual units directly to clients. This requires an upfront investment in purchasing or leasing land and constructing the facility itself, but it does have the potential for long-term profitability if done correctly. You will need knowledge about local zoning regulations, building codes, and other relevant laws when constructing your facility so that it meets all safety standards and complies with local ordinances. You will also need knowledge about marketing strategies such as online advertising campaigns and other promotional tactics to attract customers who are interested in renting out your self-storage facilities for their short-term needs or long-term needs.
How much does it cost to build storage units?
According to Storable, the cost to build a self-storage facility ranges from $25 to $70 per square foot to build. The costs of building a facility can shift depending on various factors. For example, the price of steel could change overnight or laborers might be scarce in certain places. Additionally, it’s no surprise that constructing something in a metropolitan area is more costly than doing so in small towns and villages.
In an interview with a storage unit owner, he projected that for each new facility built, break-even would be achieved within seven years. Subsequently, all revenue generated would become pure profit after upkeep and maintenance expenses have been paid.
Invest in Self-Storage REITs
If you don’t have the resources to own storage units yourself, you can still invest in storage facilities and storage unit companies. This is done by investing in Real Estate Investment Trusts (REITs) which are companies that specialize in owning storage units, malls, warehouses and other real estate. REITs allow you to become a shareholder and benefit from their profits without having to own any storage units yourself.
Invest in Self-Storage Stocks
Investing in storage unit stocks is another way to benefit from the storage industry. Storage unit companies like Public Storage (PSA), Extra Space Storage (EXR) and CubeSmart (CUBE) offer storage stocks that are traded on the major stock exchanges. Investing in storage unit stocks allows you to become a shareholder of storage unit companies and benefit from the storage industry without owning storage units.
Storage units are a great way to store and protect your belongings, but they can also be a source of income. Here are some frequently asked questions about storage units
Why are storage units abandoned?
Storage units are often abandoned when the tenant fails to pay their rent for an extended period of time, or when the storage unit’s contents become too old or destroyed to be of any use.
Are self storage units a good investment?
Self storage units can be a great investment if you are able to purchase them for a good deal at an auction and resell the contents for a profit. If you are looking for a more passive form of investing, you may want to consider investing in self-storage companies instead.
How much do storage units typically cost?
Storage unit prices vary depending on the size and location of the unit, but they typically range from around $25-$200 per month. The exact price can also depend on whether you are looking to rent the unit short-term or long-term.
What state has the cheapest storage units?
Storage unit prices vary across states, but generally speaking, the cheapest storage units are found in states with low cost of living such as Oklahoma and Arkansas.
Do storage units run your credit?
Most storage units do not run your credit, as the rental agreement is typically based on a month-to-month basis. However, some facilities may require a security deposit or proof of income as part of the rental agreement.
Are PODS cheaper than storage units?
PODS are typically more expensive than storage units, as they include delivery and pickup service. However, if you are looking for convenience or need a short-term storage solution, PODS may be a better choice.
Is owning storage units profitable?
Owning storage units can be profitable if you are able to manage the facility properly, attract tenants, and keep the unit in good condition. It is important to research local regulations, tax laws, and customer trends when considering this type of investment.
What is the ROI on storage units?
The return on investment (ROI) for storage units depends on the size of the unit, the location, and other factors such as occupancy rates, vacancies, and maintenance costs. Generally speaking, storage units can provide a decent rate of return if managed properly.
What temperature are climate controlled storage units?
Climate-controlled storage units are typically kept in a temperature range between 50 to 80 degrees Fahrenheit. It is important to check with the facility manager to understand their exact temperature range and regulations.
Are storage units secure?
Storage units are typically secure, as they often include features such as alarms and access control systems. It is important to ask the facility manager about the security measures in place before renting a storage unit.
What are the average sizes of storage units?
The average size of a storage unit is typically 10×10 feet, though this varies depending on the facility. Many facilities offer multiple sizes to accommodate different storage needs and for customers to choose the size that best fits their needs.
Are there any household items not allowed in storage units?
Most storage units do not allow hazardous materials, flammable items, food items, and animals. It is important to check with the storage facility to understand their rules and regulations before storing any items in the storage unit.
We hope this FAQ has helped answer some of your questions about storage units! If you need more information, please contact the storage facility that you are inquiring about directly for specific details.
Overall, storage units can be a great way to generate passive income if you take the time to invest in storage companies and storage units wisely. With the right investments, storage can be an extremely lucrative business opportunity with a good return on investment. By following the tips outlined above, you can maximize your chances of success when investing in storage.